Question

How do we effectively measue the value that our human capital contributes towards bottom line reuslts ? other than turnover absence rate etc are there more meaningful metrics that shed lights on the direct peso effect that our employee have?

Answer 1

Effective performance appraisal system can help evaluate the employee efficiency, motivation and training needs. The KPIs which help the management know about the contribution of the employee towards organisation's bottom line are the - individual target, team target, turnover, employee attendance and quality (i.e. know the type and frequency of defects or errors)

Also, there is one more parameter that could be tracked, how much employee efficiency is improved during the assessment period. Example:- Consider case of a newly recruited logistics officer. His responsibility is to check the dispatch documents and prepare invoice. In the beginning he takes around 20 minutes per dispatch, to complete the procedure. Over time, with increase in experience, the logistics officer should be able to reduce the time required and be able to facilitate faster delivery and handle more number of deliveries. This way the manager can understand the progress he has made and track his improvement. In case, the throughput time does not reduce, the manager inquire whether there is any training requirement or any other reason.