United Kingdom mulls HR metrics.

It is good to see HR Magazine addressing the issue of HR measurement (December). Assessing the value that people bring to organizations is high up the agenda in the United Kingdom, too. A government task force, Accounting for People, has recently recommended that companies should report on aspects

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But we take issue with some of your writers' conclusions based upon experience on our side of the pond.

Disagreeing with Steve Bates' article ("The Metries Maze"), we cannot believe that attempting to measure the ROI of individual employees will ever result in anything other than overly mechanistic simplification and spending much valuable HR time on measuring the unmeasurable. However, we do know that measuring ROI on HCM as a whole, and on individual people processes, is something desired by organizations, their boards and, increasingly, their stakeholders and shareholders, as well. This need is emphasized by research into the opinions of HR leaders on HCM measurement and reporting conducted last October by our employer, Penna Consulting, the U.K.'s third-largest HR consultancy.

We also disagree with the second article ("Measuring HR? Benchmarking is Not the Answer!"). Just because HR efficiency measures do not measure impact on business performance does not make them worthless. Benchmarking and efficiency metrics provide powerful supporting arguments for strategic decisions. If HR is inefficient it will be unable, or certainly less able, to make a strategic impact. Extending the authors' arguments to HR activity, the real challenge of HCM is not choosing the right people strategy, but executing it! And good efficiency measures can help.

We do agree that if HR is not to turn into a measurement machine, we have to concentrate attention on the things that help us to understand whether, and how, HR can add greater value to the business.

The model we have created differentiates between primary measures that collect data on HCM activities creating strategic differentiation or having a significant impact on the business (on which most measurement and energy should be focused), and secondary metrics, which bring in measurement on input and efficiency.

Richard Finn and John Ingham

London

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