What Are Human Capital Metrics?

Osmand Vitez

Human capital metrics represent the activities a company engages in order to assess the value of employees. All companies have employees, from owners down to janitors; knowing how well each one does his or her job is essential to remaining competitive. One specific tool for measuring human capital metrics is a scorecard, which measures financial, customer, workforce, and business tasks completed by employees. These individual metrics allow for a company to put together aggregate information on each employee. Other measurements may also exist outside of the scorecard method.

Knowing how well each employee does his or her job is essential to remaining competitive.
Knowing how well each employee does his or her job is essential to remaining competitive.

The perspective on each activity on the human capital scorecard often starts singularly, with all being reviewed together once complete. The financial perspective often uses human capital metrics that define how well each employee works with the funds given him or her. Working inside budgets, cost reductions, and revenue increases are all part of this perspective. The individual tools used to measure success may be different. In some cases, employees may not have metrics based on financial aspects.

Customer perspectives on a human capital metrics scorecard tend to review how employees handle customers and related issues. The metrics here can be wide ranging, from general customer feedback to serious customer allegations or complaints. An employee’s immediate supervisor often completes this review. Independent customer comments regarding an employee’s performance may also play a role here. All data taken together complete this aspect of the customer perspective.

Workforce success in human capital metrics defines how well an employee completes his or her tasks and activities. Two general focuses here may be on employee efficiency and effectiveness. A review of the employee’s skill sets and education against actual results is quite common. How well the employee communicates and works with others is also important here. These metrics may create trends to show employee growth or the lack of it.

Business process or tasks completed are typically the final perspective of a human capital metrics scorecard. Reviewers may look at the number of tasks completed and how the employee manages multiple tasks. In some cases, this perspective may not be very important as immediate supervisors review the employee’s daily actions. Extremely detrimental actions or lack of responsibility may place higher importance on employee actions, however. Upper management may review the metrics scorecard for these problems.

Other types of human capital metrics may exist in a company. Rather than using a scorecard approach, a company may simply separate each of these items for review. Categories may include leadership, employee engagement, workforce optimization, and learning capacity, among others.

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