Don’t worry, 95436, I’m not talking about you… oh, you’re 95463? Sorry, you totally look like a 36.
Anyway, don’t worry; I’m not trying to de-humanize human resources. Instead, I’m talking about finding that perfect employee metric. But I’m fairly sure that if I put the word “metric” in the heading, I’ll lose most of this audience.
You already know what your internal HR metrics are. Cost per hire, turnover cost, days to fill, training completion – these are all things that you know and track. As you should; they’re invaluable to managing your own department. They will also glaze the eyes of anyone outside of your department.
The quest for you is to find the perfect employee metric, that thing that compares your employees in a way that your organization will embrace. That magic number that helps both you and the rest of the organization understand people, and figure out how much of your talent is actually “talented”.
When I was the HR guy for a chain of oil change centers, the magic metric was “ticket”. This was the average invoice for the hour, or day, or week, as needed. You could attribute that number to the individual who cashed out the customer, or average it to the entire lube center. “Ticket” was a language that everyone in operations spoke already and proved incredibly helpful for me as the HR guy in calling out biases. Every month or so, a District Manager would come to me asking to fire a Service Center Manager who “just isn’t getting it done.” That conversation could be quickly short-circuited when I pulled up the operations dashboard for the day, and asked the District Manager why he had a problem with a guy running a $63 ticket! (Remember, a basic oil change costs $32) Or, on the flip side, I could empirically say that a manager running a $38 ticket was not, in fact, getting much of anything done. It is completely non-judgmental – either the manager (or individual employee) is making sales, or they’re not.
I’m new to my current job, so I’ve spent some time searching for the ideal metric here. So far, my favorite is “penetration” (Meredith, stop giggling). We place about the same amount of our clients’ product on the shelf of each grocery store we work in. So, if our penetration – the total value of our products as a percent of overall store sales – is 6.3% of the sales at one store, and 4.8% at another, I’m going to be very interested in what is going wrong at the second store. It could be that a new Kroger opened up across the street, or it could be that the on-site employee just decided that the shelf coupons would stay in her car this month.
As you look for your own organization’s magic metric, it should be:
- Created and tracked by someone outside of HR. When you call up someone in ops and ask them why it’s high or low, it can’t be something that only you can see in the HRIS. You’ll notice that I had to explain an awful lot about my business for each of these metrics – that’s a good thing.
- Objective. Managers have favorites and have excuses for those favorites.
- Timely. Management by P&L is necessary, but if you only rely on a P&L, your managers will only know that they had an issue a month and a half later when the books close. Find something that you or managers can react to soon after it happens
- Something which the employee can personally impact. No one likes to be held accountable for things they didn’t do. If the customer added to the specification at the last minute, the project manager can’t get dinged for missing the old deadline.
- Tied to profitability. I’m thrilled that when customers call the 800 number, they always give your store 5 out of 5. However, if those 5’s don’t translate into increased revenues, we’re going to have a hard time keeping the doors open so we can keep those customers happy.
What’s your number?
Editor’s Note - Steve Gifford, MBA, SPHR, is the Director of Human Resources for Eurpac Service, Inc., a national grocery and retail brokerage. His first HR job was in the US Army during his second tour in Iraq, where every employee in his client group carried an automatic weapon. It helps him keep the problems of retail employees, who show up to work late, in perspective..
Your last two bullets are perfect. A good friend of mine was a service manager for an auto dealer. His monthly bonus was tied to getting an absurdly high ranking on the customer survey cards they handed out to every customer that came through the place. Anybody with a brain knows that only the customers who are either really pissed off or really happy actually fill those cards out. So the metric by which his performance was measured had little to do with his actual performance. Furthermore there isn’t a direct link between those 0.5 out of 5′s (or the 5 out of 5′s) and the profitability of the service center. A more appropriate metric would have been something more like your “ticket” metric. As you might imagine, my friend has since sought and found a position at a different dealership.
That dealership is actually lucky! Its not that hard for a good salesman to come up with a routine of asking for a 5 every single time. It can even get to extremes where the salesman hands the customer the phone while they’re standing there. Customers feel like their arms got twisted, but by golly, those metrics were higher!
You said, “penetration”.