HRMN 395-Week 5 Discussion: Possible Pitfalls, Evaluation, & Metrics AND Assignment 2: Report on Metrics

Human Resource Management

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– Please use APA (7th edition) formatting

– All questions and each part of the question should be answered in detail (Go into depth)

– Response to questions must demonstrate understanding and application of concepts covered in class

– Responses MUST be organized (Should be logical and easy to follow)

– Use in-text citations and resources per discussion from the school materials

–
The use of course materials to support ideas is HIGHLY RECOMMENDED

“Need at minimum 1½”

Many Chief Executive Officers (CEO’s) and Chief Financial Officers (CFO’s) complain that their Human Resource professionals do not report metrics about Total Rewards or otherwise
that matter to the organization. Instead they report metrics that are very general and not specific enough to be helpful or they are metrics that are important mainly to the HR team and not linked to the organizational capabilities or employee competencies. We want you to be able to provide metrics that are relevant to the organization – metrics that matter to the CEO or CFO and all other leaders in the organization.

After selecting a metric for this discussion, ask yourself what does the metric that I am proposing tell me about the effectiveness of the Total Rewards program (or if relevant, a specific reward)? The metric must relate to the Total Rewards package to be a relevant metric for this discussion and for your next presentation.
Revenue, profit, customer satisfaction are good data to know, but they are not relevant metrics for this assignment.

Further, the percentage of
turnover is not important, by itself, as a metric, but the metric of the percentage of the highly valued employees who are leaving the organization and
why they are leaving is helpful to know since the data should tell us if the rewards currently offered are a factor in those valuable employees decision to resign.
Whether employees are happy is not a helpful metric (nothing against having happy employees but the organization would be better informed if it knew whether the employees are engaged in their work because of the total rewards). A metric that reports the percentage of
the employees who are satisfied with the organization is not as helpful as knowing by individual segment of employee which benefit is of most value, through a forced ranking of the benefits. Therefore,
do not select turnover as a metric on its own, do not select employee satisfaction on its own, and do not select revenue, profit, customer satisfaction, or productivity as a metric.

Discussion #1

Give an academic definition of the term metric (with an in-text citation and full reference). Discuss why, in general, metrics are important for HR professionals to report. For example, they can assist the HR professional in achieving their goals and objectives while also assisting the whole organization. For example if innovation is a core capability of the organization, tracking the level of turnover of the individuals who have had the most success innovating would be important along with knowing why these individuals are leaving. This metric would allow the organization to change incentives or other rewards, if needed, or look for other ways to retain the needed talent.

Discussion #2

Share the following:

· A metric you are considering for the next assignment (
assignment 2) (typically a metric is an outcome and is presented as a percentage or index).

· What the metric tells the organization about the effectiveness of the total rewards program or a specific reward

· How the metric helps to support the organizational capabilities (what the organization does best) or how the metric helps to support the employee competencies (the knowledge, skills, and abilities)

· How the data for the metric will be collected (for example, through an electronic survey, exit interviews, data from the Human Resource Information System (HRIS), focus groups or something else)

A metric will be acceptable for the second assignment if it:

· Evaluates the effectiveness of at least one element of the total rewards program of the organization

· Helps toward achieving the organization’s capabilities or employee competencies

· Data can be collected for the metric (you do not have to collect the data but you will describe how you could collect it)

Assignment 2: Report on Metrics (MS PowerPoint Presentation) (20%)

This assignment provides you an opportunity to demonstrate mastery of course outcomes:

3. Select

3 metrics
that are aligned with the organization’s objectives in order to ensure organizational success

4. Formulate a plan for implementing a total rewards program in order to ensure success of the program

In this assignment, you will write and present a MS PowerPoint Presentation that describes and justifies the total rewards metrics that you propose. The course material provides examples of metrics and how they are used to evaluate the effectiveness of the Total Rewards Program. These metrics will used as a portion of the final paper due Week 8 (the final assessment for the class). Feedback from the instructor may require some revision to the chosen metrics prior to use in the final paper. At least three different scholarly references from the course materials are to be presented in APA format, as well as respective in-text citations and relevant Web site documentation if information about the organization is taken from a Web site.

You will define the term metrics, explain how metrics are used to evaluate the success of the total rewards program, identify, describe, and provide examples of at least three metrics and share how you will collect the data for each metric and how you will set the benchmark or goal target for each that you would use to compute and analyze the Total Rewards Program in the organization you are studying in the course. Justification for the metrics linked to the organizational objectives, requisite competencies, and challenges should also be included.

At the least, the presentation will include the following segments:

1. Title Page

2. Introduction and Purpose of the Paper

3. Academic Definition of the Term Metric

4. Explanation of the Use of Metrics in Evaluating the Success of the Total Rewards Program

5. Three Metrics (Identify, Describe and Provide Examples AND share how you will collect the data for each metric AND how you will set the benchmark or goal target for each).

6. Justification of the Metrics Selected (Links to the Organization’s Success, Requisite Capabilities, Competencies and Challenges)

7. Conclusions

8. Reference Page (at least three different scholarly sources from course materials)

Module 5: Possible Pitfalls, Evaluation, and Metrics

Topics

Topic 1: Possible Pitfalls of Implementing,

Communicating, and Measuring Total Rewards

Topic 2: Metrics and Evaluation

Topic 3: Conclusions

Topic 1: Possible Pitfalls of Implementing,

Communicating, and Measuring Total Rewards

As with any major initiative with many steps, various people and departments involved, and
tasks that are designed and implemented over a long period of time, there are pitfalls that are
possible. Some of the more common ones are presented in this section in order to bring
awareness to them.

1. Jumping in without the required research: Organizations are action-oriented and

tend to want to begin solutions before having done adequate research. However, without
the proper supporting data, wrong decisions can be made. It is important to take the
necessary time and have the money to gather the required data on which to base the
important decisions.

2. Not having support in the organization: Not only time, but also funding, will be
required for the staffing needed for the implementation of total rewards and for the
rewards themselves. Without the key leadership’s support within the organization, the
proper communication will likely not occur and the rewards will risk being revised or even
eliminated. The support of the organization needs to be confirmed at the beginning,

during the entire design and implementation process, as well as ongoing as the rewards
are being evaluated.

3. Not analyzing the costs: The cost of rewards for work performed is one of the largest
segments of an organization’s budget. Without properly analyzing the costs of the
rewards, separately and combined, decisions made about them cannot be effective. The
analysis of the costs will include not only the expense in today’s dollars, but also the cost
in the future.

4. Attempting to do too much too quickly: If too much is attempted at once, the process
can suffer. Each step is important and must be done properly because the success of the

implementation depends on the foundation of data gathered. The care taken in
communicating, obtaining buy-in, and concurrence can be determining factors toward the
success of the programs. Take the time needed for each step of the process, including
the essential steps of measurement and evaluation.

5. Not establishing objectives and metrics that are linked to business
objectives: The core of the total rewards model is that the rewards offered are aligned
to the business objectives. Unless program objectives and metrics are aligned to the
business objectives of the organization, success cannot be evaluated.

6. Having to take rewards away: If rewards are introduced and then taken away, it’s
worse than never having had them at all. Employees quickly develop a sense of

entitlement to rewards. Taking rewards away creates a sense that the organization is not
supporting them, is punishing them, or is not appreciating them. Take great care that
any reward implemented can be sustained. But if something has to be taken away, also
take great care in communicating why the decision was made to do so.

Link: https://learn.umgc.edu/d2l/le/content/715326/viewContent/29088045/View

https://content.umuc.edu/file/e37d51d8-58d1-47dd-b7a9-33e6c109d7e3/1/HRMN395-1302.zip/Modules/M5-Module_5/S3-Commentary.html#I

https://content.umuc.edu/file/e37d51d8-58d1-47dd-b7a9-33e6c109d7e3/1/HRMN395-1302.zip/Modules/M5-Module_5/S3-Commentary.html#III

https://content.umuc.edu/file/e37d51d8-58d1-47dd-b7a9-33e6c109d7e3/1/HRMN395-1302.zip/Modules/M5-Module_5/S3-Commentary.html#IV

7. Unexpected change in requisite KSAs and/or business plan: Due to changes in the
domestic or global economy, changes in the competition, expansion, mergers, or the
introduction of expanded products or services, changes for the organization may occur
that could result in the organization requiring a different set of KSAs in order to be
successful. If this happens, the organization will need to assess if the current reward

programs will still attract, retain, and motivate the needed employees.
8. Communication issues such as errors in the messages or not understanding the

audience: The rewards programs are only as good as they are communicated and
administered. If the communication has errors, is not targeted to the audiences inside
and outside the organization, and not customized for those various audiences, the
programs may not have credibility and may not be seen as positive. Cultural differences
of countries must also be considered. One organization launched an expensive marketing
program for a new product only to learn that the colors it used in its advertisements were
viewed as vulgar in the country it was targeting. This can happen with the marketing of
reward programs too. Too many words and too much clutter are not effective; keep it

simple, especially on web sites.
9. Measuring the wrong things: Measuring the wrong things is worse than not measuring

at all, because key decision makers may make a correlation between the results the
wrong metrics are representing and the rewards programs. For example, if the level of
satisfaction with rewards alone is reported rather than engagement of the employee,
commitment to the organization, or level of satisfaction with various segments of the
rewards programs, the level of satisfaction increasing or decreasing overall may
encourage changes to the programs when they are actually effective.

10. Not measuring: Without a measurement, the effectiveness of the programs cannot be

determined. Not only are the programs to be measured, but key metrics that gauge the
relationship between the programs and the organizational goals are essential. When
measurements are taken and reported, it highlights that the program and the objective it
relates to are important. Without measurement, the necessary revisions cannot be
determined. Without measurements, money may be wasted on ineffective programs.

11. Using available data (not relevant): Using information that is already available may
be easy, but the data may not be relevant to the reward programs. The available data
may be measuring efforts, tasks, or results that are unrelated to the success of the
organization. For example, overall turnover of an organization may be measured, but

without knowing if turnover has increased or decreased in certain positions that the
rewards are attempting to affect, the data is not helpful. The turnover may, in fact, be a
positive outcome.

12. Measuring everything: When an organization does not really know what to measure, it
is likely to try to measure everything. This dilutes the communication of the right
measures, leads to decisions being based on irrelevant data, and wastes the time of
those collecting and reading the data.

Pitfalls Specific to Web Sites

Increasingly, organizations use a web site designed specifically for the communication of their
rewards. In addition to general rewards communication, many organizations make their total
rewards statements available online and update the site frequently for employees. Because the

web sites are such a frequently used method of communication, following are a few suggestions
to address any possible pitfalls specifically related to web sites:

1. Review the web site every time you update data: And conduct a complete review at
least once annually. Messages can become outdated quickly, and information that is
irrelevant or incorrect hurts communication.

2. Don’t be afraid to include as much information as you want: The goal is to be

inclusive of all the rewards while also keeping the site uncluttered and not overly

crowded. This can be achieved through proper design of the site, with links to additional
information.

3. Don’t forget to obtain employee input and feedback: Do not assume that what is
thought of by the authors or designers of the web site as being effective is necessarily so
for employees. Ask for feedback about the content, layout, ease of operation, and style of

communication.
4. Don’t think you are done at implementation: Just because a web site has been

launched does not necessarily mean it is complete. Daily and continuous monitoring must
be done, as well as the various revisions that will need to be made to the programs.

The possible pitfalls and suggestions discussed in this segment are just a few examples of what
organizations have found to be areas to plan against and the areas to plan toward. With the

proper attention to the details mentioned, and proper execution and monitoring, most of the
pitfalls can be avoided and the suggestions incorporated.

Topic 2: Metrics and Evaluation

Why Measure?

Steven Covey (2004) states that we must begin with the end in mind. He expresses that
“individuals, families, teams, and organizations shape their own future by first creating a mental
vision for any project, large or small, personal or interpersonal” (p. 152). Without the end in
sight, in some measurable way, we will not know when and if we have achieved our desired
results. The end in mind for total rewards is the accomplishment of organizational objectives,
thus the objectives of the organization provide the foundation for the key measurements of
success of the total rewards programs.

It is often heard in business that “What gets measured gets managed.” It is a way of calling
attention to what is important. It’s also common to hear that nothing implemented is complete
until evaluated to see if what has been intended actually works. If there are no measurement
devices in place, what was intended is unknown and evaluation of the success is only
speculative. A total rewards program, like any other program of significant expense and
potential, must demonstrate that it has made a difference toward the successful achievement of
the organization’s objectives. Unfortunately, with the rewards program, there may not always be
a direct line of cause and effect that can be drawn between the success of the organization and
its mix of rewards. This is because there are many other variables in the environment that might

affect the employees, their satisfaction, and productivity. Some of these intervening variables
could be coworkers and supervisors, the job itself, the equipment being used, reorganization,
downsizing, mergers, expansion, or outsourcing. Outside variables such as the economy, or
health or family issues could also play a part. While affecting employees, the variables have an
impact on the company itself and the accomplishment of its business strategy, as most are out
of the control of the employee and they could intervene or affect an exact evaluation of the total
rewards program (WorldatWork, 2007).

However, even with its limitations, “measures matter, both as a guide to management and as a
basis of performance management. Therefore, HR professionals must be able to measure how
success in total rewards relates to the strategy execution process” (Huselid, Becker & Beatty,
2005, p. 238). Measurement of results keeps efforts aligned with the intended results. To make
the process complete, metrics to report on the effectiveness of the programs need to be
designed and agreed upon, and systems put into place to track data measured and reported.

A sound performance measurement system for total rewards does two things. First, it improves
decision making about the current rewards by helping focus on those aspects of the organization

that create value, and it provides feedback to evaluate current strategies and predict the impact
of future decisions. Second, it provides a valid and systemic justification for resource allocation
decisions. Organizations allocate significant percentages of their revenues to rewards for the
work produced, so there is a need to show that the resources spent are contributing to the
organization’s success (Huselid, Becker & Beatty, 2005, p. 110).

Definition of a Metric

Metrics, also known as measures or key performance indicators, are simply a tool for assessing

the impact of a particular project or activity. Although these are often quantitative or numeric in
nature (improve sales by 20 percent, for example), they can also be qualitative (improve staff
satisfaction levels).

Metrics can include quantitative and qualitative measures, such as reducing turnover, reducing
time to hire, increased production or services, more satisfied employees, more satisfied
customers, ability to expand or introduce new products, or a number of organization-specific key

objectives of the business plan. The measurements could be historical averages, recent
experiences, projected future performance, internal reference points, or external reference
points. In either case, qualitative or quantitative, metrics provide clear and tangible goals for a
project, and criteria for project success. It is through the measurement and reporting of key
metrics that programs can be assessed, evaluated, and changed, if necessary, to improve
effectiveness.

Common Characteristics of Good Measurement Tools

Before deciding the right measures and setting up the systems to gather and report the data, it’s
important to verify the key objectives and the corresponding metrics with key leadership to
ensure agreement. It is also crucial to the process that the metrics link to the key objectives of

the organization and that the tools used to evaluate the programs are supported prior to
initiation of the programs. There must be shared agreement on the credibility and usefulness of
good measurement tools, which tend to have some common characteristics. Following are four
that many agree are necessary for the measurements to be effective (WorldatWork, 2007):

• are explicitly reflective of the objectives attempting to be achieved; send the right
messages to employees

• are tangible measures that are clear and unambiguous

• are credible; can be believed as being achievable and relevant to the success of the
organization

• are verifiable and accurate

Types of Measurements

Because measurements can be either quantitative (numbers) or qualitative (opinions, behaviors,
etc.), how can an organization decide which method would be more effective as a measurement
tool? Most organizations do not rely solely on one method or the other, but rather use some

combination of the two. Following is a description of each, and in all cases, “It’s not what you
think or feel, but what you have the facts to prove” (Huselid, Becker & Beatty, 2005, page 246).
Regardless of whether the measurement is quantitative, qualitative, or a combination, the data
must be valid and credible. Following are descriptions of the two measurement tools:

Quantitative: these are numerical representations of the outcomes (such as percentages,
ratios) and can be grouped into three major categories:

• direct impact such as reduced turnover, increased acceptance rates

• evaluative outcomes are conclusions that result from a total rewards design, such as
the organization’s competitive market position, its total rewards cost per employee, and

its rewards mix

• indirect performance outcomes may be partially attributable to a total rewards
program, such as revenue per employee, profit per employee, productivity, customer
retention

Qualitative: these measures answer questions, and gather opinions, intentions, or impressions
of individuals. While qualitative measurements may be more subjective than quantitative

measures, they are equally important in determining effectiveness. Examples of the questions
that qualitative measures answer are: Do the employees feel engaged in their work and the
organization’s objectives? Are employees satisfied with their rewards and, if so, which ones are
the most important to them? Have they thought about leaving the organization in a past certain
period of time? Qualitative measures will give you descriptions, not numbers.

Following are a sampling of possible quantitative and qualitative metrics:

Quantitative:

• percentage of exceptional candidates attracted for high-value positions

• percentage of retention of high performers in key positions

• percentage of eligible employees for promotion to key positions

• percentage success rate of external hires

• percentage productivity per employee

• cost of rewards per employee

• percentage enrollment/use of benefits

Qualitative:

• knowledge of rewards and value of them

• performance of new hires

• cultural studies

• description of employees’ feelings toward the total rewards program

Organizations will typically select more than one type of metric in order to evaluate the success
of their total rewards programs toward the success of the organization.

Relationship of Metrics and Business Objectives

The key to an effective method of evaluating success is not necessarily if the metrics chosen are
qualitative or quantitative, or even a combination of the two. The key is if the metrics chosen are
indeed indicators that the rewards given are helping the organization achieve its business
objectives. It is important to consider “what relationship does the metric have to the success of a
business objective?” (Huselid, Becker & Beatty, 2005, p. 138). Relationships between total
rewards results are measured through the metrics (some of the above) and specific business
outcomes such as growth and exceptional customer service. In the next company spotlight

(Sepracor), the relationship between the organization’s business goals and the rewards and the
rewards metrics is illustrated.

Company Spotlight: Sepracor

The following example from the company Sepracor demonstrates how they aligned
their business strategy, rewards, and metrics.

Sepracor developed six strategic business goals:

1. Recruit the right talent
2. Measure the performance of talent
3. Reward and retain key talent
4. Develop talent
5. Optimize organizational and core leadership competencies for selection,

performance, and promotion
6. Improve operations, service delivery, and communication to optimize and

measure effectiveness of HR programs

The measurement scorecard and ROI framework was included in their business
plan and stated:

• what is important to measure

• measurement methodology

• baseline data/findings

• improvement goals (over specific time period)

• positive and negative results

Five key measures were identified to populate the scorecard and gauge year-over-
year improvements and plan for adjustments annually. They were:

• recruitment savings

• reduction in first-year attrition and turnover

• reward and retention of key talent

• external brand recognition

• employee commitment, innovation, and enthusiasm, with executive participation

Link to strategic goals: the five metrics would support the company’s growth,
enable the shift in focus from the development of pharmaceuticals to launching a
new drug, would allow doubling the size of the sales force while retaining and
motivating key research and development, commercial and functional talent.

(Source: DeTore, Jackson, Strategic HR Review, Sept/Oct, 2006)

Scorecards

Organizations are accustomed to scorecards, which provide a quick look at how they are doing in
certain important areas. Because of technological advancements, measurements have become
easier. Top leadership in particular, including boards of directors, want to know in a snapshot
how the organization is doing on its important drivers. They don’t have time to listen to long
presentations, read through long pages of reports, or analyze data. They want a few
measurements that will tell them quickly if there are any concerns or if everything is on track.
For the snapshot to be an effective one, it needs to show a balanced set of metrics and not, for
example, only financial measures. Some categories, such as financial measures, can have a
short-term success but long-lasting repercussions unless the steps to have the financial success

are balanced with other factors. For example, financial gains can be made by cutting staff or
eliminating services to customers. In the short term, the balance sheet would look good, but
soon the areas of employee and customer satisfaction would likely suffer. Over the past years

the concept of a balanced scorecard has been introduced (Manas & Graham, 2003, Kaplan &
Norton, 1992) to help key an eye on four important areas to provide a larger picture of needed
results. And even more recently, the communication through a scorecard for human resources
expands on the concept.

Total Rewards Scorecard

Each organization is unique and also has its own unique business objectives. Organizations
require specific KSAs and targets their population based on their needs. The population targeted

has a certain set of needs, wants, and preferences. Therefore, the total rewards scorecard,
combining the total rewards metrics and the alignment to business objectives, will differ for each
organization, and may be even further differentiated for each level and function within the
organization.

Federal Express, one of the largest package movers in the world, has a major hub of its
operations in Memphis, Tennessee. Every night hundreds of airplanes arrive containing

thousands of packages that must be unloaded and sorted to their next destination. The planes
are reloaded and depart again in a matter of hours. One of the position categories of the
evening’s operation is that of package movers/sorters. These are the employees who arrive to
work at midnight and work, on average, four to eight hours per shift. It is essential to the
success of the business to have reliable employees who are motivated each evening to
demonstrate their knowledge of the equipment they use and the codes for the locales of the
destination. They also need skills and abilities to lift, hand off, or otherwise direct the packages
so that they are loaded onto the appropriate outgoing plane.

The organization, located in a city rich with higher education institutions, discovered through
their research that college students who needed financial assistance were their targeted
employee population. They were able to successfully design a rewards package to attract, retain
for at least four years, and motivate employees, who were free to take classes during the day
and evening, having their school expenses covered. The employees typically move on after they
complete their undergraduate degrees, while some go on to graduate school. Although turnover
can, of course, be expected, the rewards package yields ready recruits at all times. Following is a

possible set of total rewards metrics aligned to the business objectives based on this
organization.

One of their core business objectives was to:

Reliably and economically ship packages around the world overnight

In order to achieve this business objective, one set of requisite employee KSAs was:

Knowledge of the scanning equipment, city, state, and country codes. Skills and abilities to lift,
move, direct large numbers of packages in an efficient and quick manner. Ability to work

midnight to morning shifts of varying lengths, six or seven days a week if needed. Willing to
relocate to Memphis, Tennessee.

One segment of the population that would likely hold these KSAs:

College-bound populations with need for financial assistance with college expenses, physically
and mentally able to meet the bonafide occupational requirements (those KSAs essential to
demonstrate in the position).

Rewards designed by the organization to attract this segment:

• all tuition, books, fees, plus a housing stipend for undergraduate and post-graduate
degrees

• competitive base hourly wage

• pay for full shift even if work is completed in less than a full shift

• fully paid medical, dental, and life insurance

• subsidized dormitory-type housing available, if requested

Reward metrics to evaluate the success of the total rewards program:

• successfully move 100 percent of packages each evening at the central hub

• retain mover/sorter employees for an average of four years

• have 20 percent of current mover/sorter positions with qualified backup

applicants

(Source: Based on author’s personal benchmarking visit to FedEx hub, Memphis, Tennessee, 2000. While

this information was true at the time, the reward package may have changed since. The situation is

presented for illustration purposes only.)

Table 5.1
Business Objectives and Total Rewards Metrics for Federal Express

Business Objective Total Rewards Metrics

With 100 percent reliability,
economically ship packages
around the world overnight

Successfully move 100 percent of packages each evening at the central hub

Retain mover/sorter employees for average of four years

Have 20 percent of current mover/sorter positions with qualified backup

applicants

In this case study of Federal Express (information obtained through the experience of

benchmarking the organization), it is clear that the organization was applying a strategic
marketing effort to their recruitment, retention, and motivation of employees required to fulfill
their business objective. The business objective was in clear sight to the leaders of the
organization, the required KSA were assessed, and they identified what rewards would likely
attract, retain, and motivate the employees with the needed KSAs to fulfill the objective. The
evaluation of the success was clearly identified with three metrics that related directly to the
business objective. More about the crucial step of evaluation follows.

Evaluating Total Rewards

After the steps of designing, implementing, communicating, and measuring are finished, the
evaluation of the program’s success needs to be done. What are the metrics telling the
organization? Are the rewards assisting the organization toward success? Are some rewards

more effective than others? Are some segments, levels, and functional jobs being recruited,
retained, and motivated while others are not? A common way of beginning the evaluation is
accomplished through a gap analysis. The metrics are measured against the target set. This is
why it is important for each metric to have a set desired value. The baseline measurements are
helpful in order to see how much, if any, the target has moved, but the baseline is just the
beginning point. The desired metric will have a new value.

1. Gap analysis: This is a look at the metrics at the end of a preset period of time in
relation to the baseline set or period-over-period movement in the measurements. While

quantitative measures are more easily assessed than are qualitative ones, information
behind the movement in the quantitative measurements needs to be examined to see if
any intervening variables are at play. For example, if the acceptance rate has greatly
increased for key leadership positions, has there been reorganization in another local
company that might cause more applicants to be available? Qualitative measures also

need extra assessment as well. For example, if the level of satisfaction of the employees
has increased based on a survey, did other events happen around the time the survey
was taken to influence the results? For example, was there new communication about
rewards distributed? Was there a change in the key leadership of the organization? Was a
reorganization of the organization introduced? Metrics are certainly an indicator, but
should not be used without additional information about other variables that may affect
them.

2. Determination of needed changes: Changes are not necessarily recommended based
on the metrics. It is recommended that a team of a cross section of managers and
employees evaluate the data and make recommendations for changes, if any. Some

reward programs take time to cause a change in the results. Changing rewards can often
be confusing and time consuming. Sometimes the results that show up in the metrics are
due to intervening factors caused by events out of the realm of influence of the reward
programs. Careful evaluation and assessment needs to occur before any changes are
made.

3. Cost analysis: As in the implementation of the total rewards program, a cost analysis is
necessary again if changes are recommended. Reward programs and their respective
administration, implementation, and communication can be expensive. Prior to gaining
the support and approval of key leadership, the financial cost of the changes, as well as

any negative/positive costs, must be analyzed.
4. Key leadership buy-in: Any changes to the rewards programs will need the approval

and support of key leadership of the organization. Rationale based on the business
objectives is imperative. No change should be recommended only because it appears to
be or is thought to be needed. A sound business case must be made for the decisions.

5. Communication: A new communication plan will need to be designed to introduce any
changes in the rewards. When changes are made to plans, they may require more
communication than would a new plan. The reasons behind the changes will need to be
clearly articulated so that those receiving the news of the changes will not be left to

imagine on their own why the changes are being introduced. As with a new plan, there
will need to be various levels of communication, for the key leadership, managers and
supervisors, and the general population of employees. Some training may also be
required.

6. Implementation of changes: Once again, the programs will be implemented, the plans
administered, and, perhaps, new metrics determined. Whether new or revised, the
metrics will again be tracked and communicated.

7. Analysis and evaluation: The steps of analysis and evaluation will occur periodically.
While communication of the metrics will most likely be monthly or quarterly, the analysis
and evaluation of the results of the total rewards programs will typically be on an annual

basis.

As in all major initiatives and processes, total rewards success is a continuous cycle of research,
design, implementation, evaluation, and revision.

Topic 3: Conclusions

This concludes the five modules designed to focus on the total rewards approach to

compensation management. This module described the possible pitfalls of implementing and
evaluating total rewards programs. All major initiatives have potential pitfalls; this module
described several based on the experiences of others. The module also described the necessity

for global organizations to customize rewards to the specific countries of origin for the
employees. Because many organizations now are global, with employees in other countries, the
organization must adjust its rewards to fit the needs, wants, and preferences of the employees in
those countries while also honoring the cultures and values of those countries and holding true to
their own company’s values and internal equity. Last of all, the essential steps of defining

metrics in order to evaluate the success of the programs toward achieving organizational success
was described. After the design and implementation of rewards comes the essential step of
measuring the effectiveness of the rewards programs in assisting the organization with its
business objectives and then adjusting the programs, if necessary.

In conclusion of this module and the set of five modules, a few words about human resource
professionals and measurements are offered. Human resource professionals continue to

demonstrate their value to organizations in both administrative and strategic roles. The total
rewards approach to compensation is an area in which HR can be a significant partner and leader
for the organization. The role of total rewards is to successfully attract, retain, and motivate
employees holding the requisite KSAs that the organization needs to achieve its business
objectives. HR can make explicit its value to the organization through the design,
implementation, and measurement of total rewards that align with the business objectives.

In a study reported by Sibson Consulting (2004), they reported that most human resource

professionals strive to be business partners or business leaders. However, they also stated that
they did not believe that the HR function will be seen as a business partner in most companies
until its insights on human capital are based on good data and business-based metrics. They
found that the problem was not that human resources lacked information or performance
measures. In fact, the HR professionals were easily able to identify three to five common key
measures and many had dozens of measures they tracked (for example, turnover, number of
hires, training hours delivered, employee satisfaction or morale, cost per hire, time to hire, the
ratio of HR staff to employees, HR operating costs per employee served, and benefit costs). But
the problem with many of these measures is that they are measuring things that do not

necessarily clearly align with business objectives. With total rewards the situation can be very
different. While the traditional HR metrics do inform about some necessary performance (and
some may be required by law), it is through aligning any of the HR metrics to a direct business
impact that will enable the human resources professional to better quantify its impact on and
value to the organization.

This module ends on this topic of HR and metrics because of the significance of the total rewards

program to an organization. It is the purpose of human resources to recruit, hire, retain, and
impact the motivation of employees in order for the organization to achieve success. Without
metrics, the results and value of the efforts cannot be evaluated. With them, the impact can be
seen and the value of the human resources professional enhanced.

References

Becker, B., Huselid, N., and Ulrich, D. (2001). The HR Scorecard: Linking people, strategy, and
performance. Boston, MA: Harvard Business School Press.

Covey, S. (2004). The 8th habit: From effectiveness to greatness. New York: The Free Press.

DeTore, R., and Jackson, D. (Sept/Oct, 2006). “Managing Sepracor’s employment brand:
Tracking the employment brand’s contribution to business strategy.” Strategic HR Review.

Employee Benefits Magazine. London. Sept. 6, 2007. “Focus on Hewlett-Packard,” p. 40.

Huselid, M., Becker, B., and Beatty, R. (2005). The workforce scorecard: Managing human
capital to executive strategy. Boston, MA: Harvard Business School Press.

Kaplan, S., and Norton, R. (1992). “The balanced scorecard: Measures that drive
performance.” Harvard Business Review 70, No. 1 (Jan-Feb, 1992), pp. 71-91.

Manas, T., and Graham, M. (2003). Creating a total rewards strategy: A toolkit for designing
business-based plans. New York, NY: American Management Association.

McGregor, J. (Jan. 28, 2008). “The right perks: Global hiring means getting a handle on how
different cultures view salaries, taxes, and benefits.” BUSINESSWEEK.

Mercer. (2007). “Compensation trends of the future: Designing a sustainable global total rewards
strategy.” White paper. Retrieved March 1, 2008, from http://www.mercer.com

Sibson. (2004). Figure 4. Retrieved June 17, 2008, from http://www.sibson.com/publications/
perspectives/Volume_12_Issue_2/e_article000271649.cfm?x=b11,0,w

Sibson Consulting. (July, 2004). HR at the Table: Increasing HR’s Impact on the Business, by Jim
Kochanski and Donald H. Ruse in publication of Sibson Consulting, Perspectives.
http://www.sibson.com/publications/perspectives/

Volume_12_Issue_2/e_article000271649.cfm?x=b11

Ulrich, D. (1997). Human resource champions: The next agenda for adding value and developing
results. Boston, MA: Harvard Business School Press.

WorldatWork. (2007). The WorldatWork handbook of compensation, benefits & total rewards.
John Wiley & Sons, Inc.

(800) 543-2055 • www.theHRSpecialist.com Business Management Daily

Your guide to cost savings, total rewards & legal compliance Vol. 9, No. 1 • January 2014

In The News

In this issue
Execs set pay? Watch out! ……………………………………………………..3
Winter weather woes: How to pay ………………………………………..4
Expert Advisor: 5 ways to turn good into great……………………..5
What terrifies pre-retirees ……………………………………………………….6
What’s Working: Benefits trends around America ……………..7

Track the HR metrics that really matter
You probably track several HR-

related numbers, but are you
sure you’re tracking the right ones?
When it comes to metrics, most HR
departments fail to focus on strategic
HR information.

Sure, turnover rate is important,
but it may not help your top execu-
tives when they have to make diffi-
cult business decisions. So offer them
metrics that do. Your statistical savvy
will enhance HR’s role as a strategic
partner in guiding the enterprise.

Here are some of the more com-
mon metrics that experts say HR pro-
fessionals should know how to track:

Organizational effectiveness
• Revenue factor: Revenue ÷ num-

ber of full-time employees (FTE).
• Human capital value-added:

Revenue – (operating expense
– [compensation cost + benefit
cost]) ÷ number of FTE.

Compensation
• Compensation-to-revenue ratio:

Compensation cost ÷ revenue.
• Compensation expense-to-revenue

ratio: Compensation cost ÷ oper-
ating expense.

HR
SPECIALIST

Manage a year’s worth of seasonal distractions
Sure the holidays are over—but

January is simply the start of
another year of holidays, vacations
and seasonal celebrations that can
divert employees’ attention from
their work, invite unscheduled
absences and affect productivity.

Your best bet: Head off problems
by anticipating extra absences and
distractions. Here are 12 unofficial
“holidays” that staff will likely observe
—even if they aren’t on the calendar.

January: Flu! Achoo!
Sometimes a little absenteeism is
a good thing, especially when the
health of co-workers is at stake. A
Kimberly-Clark Professional survey
found that 59% of people go to work
when they’re sick. Thirty percent of
said they were so important, they
couldn’t skip a day! Result: They
infect others with contagious illness
such as the flu.

Tip: Insist that employees with the
flu stay away until 24 hours after their
symptoms have subsided.

February: Love is in the air
Some polls show as many as 59% of
employees have dated a colleague,
and one in three of those dalliances
results in marriage. Timely tip: Valen –
tine’s Day might be a good time to
remind employees of your organiza-
tion’s policy on office romance.

Examples: Some employers ban re la –
tion ships within teams, departments
or chains of command. Supervisor-
subordinate relationship bans are
essen tial—the threat of coercion
could trigger harassment lawsuits.
Plus, co-workers may resent per-
ceived favoritism.

March: Pure madness!
Nearly one-third of employees polled
last spring spent at least three work-
ing hours during the NCAA’s “March
Madness” college basketball tourna-
ment keeping up with the games.
The annual cost to American busi-
nesses: an estimated $134 million in

Continued on page 2

Continued on page 8

You bet benefits matter! More than
three-quarters of workers say that the
benefits package an employer offers
is an extremely important (33%) or
very important (45%) factor in their
decision to accept or reject a job. The
finding comes from the 2013 Health
and Voluntary Workplace Benefits
Survey conducted by the Employee
Benefit Research Institute.

The U.S. Supreme Court will
tackle birth control provisions
written into the Affordable Care Act
(ACA). The law requires employer-
provided health in surance to cover
contraceptive services. Two compa-
nies have fought the rules in federal
circuit courts of appeal, arguing that
the First Amendment and federal law
grant them the right to refuse on reli-
gious grounds to cover health care
they object to.

The Supreme Court will re solve the
issue with oral arguments in March,
followed by a decision in June. Learn
more at www.theHRSpecialist.com/
ACA_contraception.

ACA online SHOPs have been
delayed a year, to November 2014.
Healthcare.gov website woes mean
small employers can’t go online yet to
buy health in sur a nce for employees
through the ACA’s Small Business
Health Options Program. They can
do it the old-fashioned way—with a
paper application or through a broker.
Details at www.theHRSpecialist.
com/ACA_SHOP_delay.

Compensation & Benefits
Join us

at LEAP 2014 in

Las Vegas … see page 8

8 Compensation & Benefits • January 2014 www.theHRSpecialist.com

LEAP 2014

When: March 12-14, 2014
Where: The legendary Bellagio in Las Vegas

To register: LEAP2014.com or (800) 543-2055

Our 10th Annual Labor & Employment Law
Advanced Practices (LEAP) Symposium

30+ Expert Speakers • 17 HRCI Credit Hours • Breakout Sessions
FREE Pre-Conference Workshops • FREE Post-Conference Seminars

Comprehensive Course Materials • $500.00 in FREE Gifts
Money-Back Guarantee • Spectacular Location • And More!

“LEAP is my
new favorite

HR conference”
 attendee

Sarah Sherere

Special guest speaker:
EEOC Commissioner
Constance Barker

Employers will use both carrots and
sticks to keep workers healthier

and stem the tide of higher health care
costs, according to the 2013/2014
Towers Watson Staying@Work Survey.

The carrots: Financial rewards for
employees who achieve good num-
bers on tests that measure fitness and
health. The sticks: Financial penal-
ties—higher insurance premiums and
deductibles—for those who don’t, or
who continue to smoke.

The survey found that employers
are increasingly placing the health-
cost containment onus on employees.

According to Towers Watson, 70%
of employers say getting em ployees
to take more responsibility for their
health is the top priority of their
health programs. Over the next sev-
eral years, they’ll increasingly use
financial rewards and penalties to
hold workers more accountable and
improve health outcomes.

In 2014, the survey found, 36%
U.S. companies will use penalties
such as higher health insurance pre-
miums and deductibles for employees
who do not participate in health man-
agement activities. In 2015-16, that

number will jump to 61%.
Outcome-based incentives that

reward or penalize employees based
on tobacco use will grow from 54%
next year to 71% in 2015-16. What’s
more, rewards or penalties for other
biometric outcomes (e.g., health-
contingent targets such as body mass
index, blood pressure or cholesterol
level) will dramatically increase from
26% in 2014 to 68% in 2015-16.

Eighty-four percent of employers
say they plan to increase support for
workplace health and wellness pro-
grams over the next two years.

Employers to use carrots, sticks to promote healthWellness

Staffing/hiring
• Turnover: Number of employees

leaving ÷ average number of FTE
for the period.

• Turnover percentage: Number
of employees leaving – number of
employees who were desirable to
lose (such as terminated or poorly
performing employees) ÷ average
number of FTE for the period.

• Time to hire: Average number of
days from job vacancy to when a
new employee accepts a job offer.

• Cost per hire: Total recruiting
costs (including advertising, search
firm fees, HR staff time, hiring
manager time, background checks,
etc.) ÷ number of new hires.

Choose the right metrics
(Cont. from page 1)

3 strategies for making the most of HR metrics
How do you pinpoint which metrics matter most for your organization? Use
these strategies:

1. Ask execs about factors that help the organization and departments
run more smoothly, satisfy customers and turn a profit. A key question to ask
managers: “What department numbers does your boss bug you about the
most?” If you keep hearing the same answer, chances are you should be
tracking a related HR metric.

2. Provide information, not just numbers. As you identify what’s important
to your organization’s strategic success, the metrics that matter most should
rise to the surface. But remember, your goal is not to deluge executives and
man agers with numbers. It’s to provide information that they can use in mak-
ing decisions about business issues.

Example: If employee turnover is hurting customer service, tracking turn-
over rates is important. But it’s even better to provide information gleaned
from exit interviews about why employees are leaving.

3. Boost your knowledge of HR metrics. Metrics can be scary to many HR
specialists who’ve built their careers dealing with people, not numbers. You
can demystify metrics by reading up on the topic and networking with other
HR pros to find out how their organizations use metrics.

Copyright of HR Specialist: Compensation & Benefits is the property of Business
Management Daily (a division of Capitol Information Group) and its content may not be
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express written permission. However, users may print, download, or email articles for
individual use.

Assignment Two
HRMN

Total Rewards

Metrics for Evaluating the Effectiveness

of Total Rewards in an Organization

This Photo by Unknown Author is licensed under CC BY-SA-NC

This presentation was created by Joyce Henderson, Ed.D. to help clarity assignment
two and the important tool called metrics.

Memo to CFOs : Don’t Trust HR A seemingly curious statement from Dr. Richard
Beatty, Professor of Human Resources at Rutgers University to a conference of CFOs
in Florida. Among the controversial views he offers on HR, he cites that many of the
metrics HR professionals report do not show evidence of the correlation between
common metrics such as turnover, employee satisfaction, performance and financial
returns. He says for those employees who make a negative impact, organizations
would be better off paying them NOT to come to work or better still, paying them to
work for their competitors. Another metric such as being an ’employer of choice’ is
‘silly’ and is an invitation to those who want somewhere ‘to hide out’, rather than
those who ‘are excited, excited and understand how to contribute to what you do.’
HR taking on the ‘St. Bernard role’ by treating most employees the same way and
‘spending considerable time trying to defend or fix poor performers. He says that the
language of organizations is numbers and that HR isn’t very good at data
analytics. Beatty said. “They don’t think like business people. Many of them entered
human resources because they wanted to help people, which I’m all for, but I’m also
for building winning organizations.“ Dr. Beatty and I are hoping to equip our

students to address these concerns. See the full article here:
http://www.cfo.com/human-capital-careers/

009/03/memo-to-cfos-dont-trust-hr/

Deliverables for
Assignment Two

Design and share a
PowerPoint presentation that:

Describes and justifies three
metrics that evaluate the
effectiveness of the total
rewards for the organization
used in the first assignment

Provides a “script” in the
notes section articulating the
bullet points as if you are
making a presentation to the
class

This Photo by Unknown Author is licensed under CC BY-ND

Assignment two focuses on a crucial action that HR professionals must perform –
selecting and reporting on key metrics for their function which is to ensure the
organization has requisite competencies for organizational success. While the HR
team may report several metrics, in this assignment we focus on metrics that will
measure the effectiveness of the total rewards program.

Metrics are a Core Element of the Total
Rewards Philosophy

Source for definition: UMUC Course Module 1 Commentary

We must evaluate the effectiveness of the total rewards package offered to employees. Total rewards
are one of the major expenses for organizations when we combine compensation, benefits, training
and other costs of the total rewards. The measurement criteria of the metrics should include two
elements which are: 1) do the rewards help the organization attract, hire, retain, and engage
employees and 2) are the rewards aligned to support the goals of the organization?

Why measure?

Organizations measure what
matters for the success of their
organization. What gets measured,
gets managed.

With the right measurements in
place, an organization can gauge
the effectiveness of their Total
Rewards programs and make
changes, if necessary.

Metrics answer questions – so the
right questions need to be asked.

Source: UMUC Course Module 5 Commentary

This Photo by Unknown Author is licensed under CC BY-NC-ND

As was shared in the notes section of slide 2, we measure the effectiveness through
metrics of the total rewards package offered to employees because total rewards are
one of the major expenses for organizations when we combine compensation,
benefits, training and other costs of the total rewards. The measurement criteria of
the also, if we do not offer an effective total rewards package, we may not be able to
recruit, hire, retain, and engage employees which can mean failure of the
organization. Metrics should include two elements which answer the questions of : 1)
do the rewards help the organization attract, hire, retain, and engage employees and
2) are the rewards aligned to support the goals of the organization?

The Language of Business is Numbers – Numbers that
Communicate Success or Failure of Initiatives

This Photo by Unknown Author is licensed under CC BY-SA

Sales are up by

% Market share has increased by 20%

Profits have eroded by 3%
Stock price is up by 2 points

Our brand has 50%
name recognition

Customer satisfaction has
Increased by

percentage
points

Non-profit organizations, government agencies, and the military also use numbers to
communicate their success or failure. For example, funding, donor participation,
clients served, and name recognition are typically tracked by non-profit organization.
And military readiness, recruits attracted, retention, funding, and more are reported
by the military branches. Government agencies at all levels also report metrics such
as their funding, budgets, key mission or goal accomplishments.

HR Professionals Must Communicate in the
Language of the Business (Numbers) in Order to be

Credible, Heard, and Understood

Intent to leave due to the
rewards offered is down by
10%

Market comparison of compensation
shows our organization in the
upper 1/4th

Skills training of employees has
resulted in 100% availability of
requisite competencies for
expansion of production

Exit interviews report that

0%
of the employees leaving is due to
rewards offered and 20% is due to
negative culture of the organization

One again, we see that metrics for total rewards need to answer the questions of : 1)
do the rewards help the organization attract, hire, retain, and engage employees and
2) are the rewards aligned to support the goals of the organization?

What is a Metric?
• Metrics, also known as measures or key

performance indicators, are tools that assess and
report the impact of a particular project or
activity.

• Metrics may be quantitative or numeric in nature
such as increased in retention because of rewards
by 20 percent. Metrics may also be qualitative
such as improved staff satisfaction levels with
rewards from 55% to

5%.

• Both quantitative and qualitative metrics are
typically reported in numbers such as percentages
or indexes.

• Metrics answer questions – such as – is the
organization meeting its goal to offer rewards that
attract, retain, and engage employees?

Source for definition: UMUC Course Module 5 Commentary

This Photo by
Unknown Author
is licensed under
CC BY-SA

When the term metric is mentioned, for some it seems to be a confusing term. The
term metric is nothing more than another word that means measurement of our
actions or initiatives. Many of us use metrics to track our own personal fitness or
health such as our Body Measurement Index (BMI) is a metric, as is our weight, our
blood pressure, our cholesterol level, our blood glucose level. These are metrics.

Metrics Need to Matter to the Organization
• What Human Resources assesses and

reports to the organization should be
important to the organization or else it is
ignored or marginalizes the work of HR

• CEOs report that Human Resource
professionals do not share metrics that
matter. Instead they report useless ones.

• How do we determine if our metrics are
important? Ask, do they link or align with:
• Organizational capabilities
• Requisite employee competencies
• Challenges of the organization
• Strategic plan for the organization

• Recall that these 4 items were presented
in Presentation One

This Photo by Unknown Author is licensed under CC BY-SA

Some CEOs say that HR reports that others cannot relate to as important such
as turnover, employee satisfaction, costs of benefits. We need to share
metrics that are readily seen as ones that MATTER. They matter if they answer
the questions of : 1) do the rewards help the organization attract, hire, retain,
and engage employees and 2) are the rewards aligned to support the goals of
the organization which can be Organizational capabilities, Requisite employee
competencies, Challenges of the organization, or the Strategic plan for the
organization?

Metrics are key performance
indications of the successful

achievement of goals

Metrics are important key performance
indications for organizational goals; they track
success related to financials, customers, and
business processes and can be used for Total
Rewards

Metrics need to measure the outcome in a
direct, not indirect manner

The direct linkage between rewards and
customer satisfaction, employee satisfaction,
revenue, profits, and productivity are hard to
prove

Sometimes HR teams make the mistake of reporting metrics that are good ones to
track but by themselves, they are not seen as a measurement of total rewards.
Turnover, for example, is important to track but the reason employees are leaving can
be related to something other than rewards. The employees, for example, may
merely be reaching the age for retirement. And, employee satisfaction is good to
know – who doesn’t want happy employees – but is that satisfaction due to the
rewards being offer or perhaps something else?

What are the Right Questions Metrics
Should Ask About Total Rewards?

• Are we offering rewards that attract, retain,
and engage employees?

• Are we offering the right rewards?
• Are our rewards competitive?
• Are we communicating our rewards to the

employees effectively?
• Are our rewards such as training and

promotions preparing the organization for
tomorrow?

• Are our rewards retaining our key essential
employees?

• Do our rewards allow us to distinguish
between the top and lower performers?

• Is the cost of the rewards offered worth the
price?

• Are our rewards helping the organization
achieve it’s major objectives or
organizational capabilities?

Evaluate the Metric – Does it Matter?
Does It Answer the Right Question?

The right metric will directly assess Total
Rewards (monetary, non-monetary, or the
work environment such as training, promoting,
or the work itself)

Total Reward Metric Example 1:

Percentage of employees who intend to leave
the organization because of rewards

Total Reward Metric Example 2:

Percentage of employees in key positions rating
rewards as satisfactory or above

Total Reward Metric Example 3:

Comparison of compensation for key positions
to the competition for same potential
applicants

The right metric will be linked to the
organizational capabilities, requisite
competencies, challenges, or strategic plan

If a core capability is to be mission ready, retention
of employees is critical

Employees must be retained and if the rewards are
not attractive, they may leave

With unemployment low and wages not increasing
significantly over the past 5 years, employees may
leave if they can receive higher compensation
elsewhere

Before you select your metrics for the second assignment, ask yourself, does the
metric directly assess Total Rewards (monetary, non-monetary, or the work
environment such as training, promoting, or the work itself)? Does the metric in
some way linked to the organizational capabilities, requisite competencies,
challenges, or strategic plan?

Metrics Answer the General Question: Are our Rewards Effective for
Attracting, Retaining, and Engaging Employees with the Requisite

Competencies our Organization Requires?

This Photo by Unknown Author is licensed under CC BYThis graphic found at https://www.helioshr.com/20

/07/compensation-vs-total-rewards-whats-the-difference-really/

Before finalizing your metrics, ask yourself if
each metric …

• Specifically measures total rewards and not another organizational outcome such as
customer satisfaction, revenue, or profit that is only indirectly related? Does it prove
that the rewards are worth the cost?

• Reports on a specific outcome related to total rewards rather than a broader, albeit
important, HR metric such as turnover, retention, time to hire, cost of benefits, or
employee satisfaction?

• Matters for achieving any of the following?
• Organizational capabilities
• Requisite employee competencies
• Challenges of the organization
• Strategic plan for the organization

• Can be calculated (does data exist that can be used for this metric)?

• Is void of incorrect terms such as using the term matrix rather than metric, metric
system rather than metrics, and incorrect grammar such as metrics is or metric are.

HR professional, as do all managers, when they use incorrect terms.

Have Questions about Assignment Two or the
Term/Tool of Metrics?

Please place the questions in the Questions Forum

so all will benefit.

This Photo by Unknown Author is licensed under CC BY-NC-ND

HR performance metrics

1 Revenue per employee Total revenue / total number of employees

More information

2 Revenue per FTE Total revenue / total number of FTE More information

3 Profit per employee Total profit / total number of employees More information

4 Profit per FTE Total profit / total number of FTE More information

5 Overtime per employee Hours of overtime / total number of hours (contractual hours + overtime) per
period

More information

6 Labor cost per employee Total labor cost / total number of employees More information

7 Labor cost per FTE Total labor cost / FTE More information

8 Labor cost percentage of revenue Total labor cost / organizational revenue More information

9 Labor cost percentage of total expenses Total labor cost / total organizational expenses More information

10 Absence rate Number of absence days / total number of working days More information

11 Absence rate per manager/department Number of absence days per unit / total number of working days per unit More information

12 Overtime expense per period Overtime pay / total pay per period More information

13 Training expenses per employee Training expenses / total expenses More information

14 Training efficiency Training expenses per employee / training effectiveness More information

15 Voluntary turnover rate Employees who left the organization voluntarily / headcount More information

16 Involuntary turnover rate Employees who left the organization involuntarily / headcount More information

17 Turnover rate of talent Employees who left the organizations and are qualify as high potentials /
headcount

More information

18 Turnover rate Employees who left the organization / headcount More information

19 Turnover rate per manager/department Employees who left the organization per unit / headcount per unit More information

20 Cost of absenteeism Total cost of absenteeism =
Total employee hours lost to absenteeism * hourly pay (including benefits) +
Supervisor hours lost in dealing with absenteeism * hourly pay supervisor
(including benefits) + other costs (including temporary staff, training, loss of
productivity, quality loss, overtime, etc.)

Houtzagers
formula

https://www.analyticsinhr.com/blog/employee-performance-metrics/

https://www.analyticsinhr.com/blog/11-key-hr-metrics/

https://www.analyticsinhr.com/blog/14-hr-metrics-examples/

https://www.rtwmatters.org/tcpdf/pdf/calculating-absenteeism-costs

21 Cost of turnover Total cost of turnover, see Excel (by SHRM) SHRM Excel sheet

22 HR to employee ratio FTE working in HR / total number of FTE More information

23 HR cost per FTE Total HR cost / total number of FTE More information

24 Time until promotion Average time (in months or years) until promotion More information

25 Promotion rate Number of employees promoted / headcount More information

General workforce metrics

26 Average age Average age More information

27 Average length of service Average length of service More information

28 Retirement rate Number of employees retired / total number of employees More information

29 Average distance from home Average distance in miles (or km) from home More information

30 Engagement rate Number of people who report being engaged / total number of people More information

31 Satisfaction rate Number of people who report being satisfied in their job / total number of
people

More information

32 Salary hike since last year (New salary – salary previous year) / salary previous year More information

Recruitment metrics

33 Time to fill Number of days between publishing a job opening and hiring the candidate More information

34 Time to hire Number of days between the moment a candidate is approached and the
moment the candidate accepts the job

More information

35 Cost per hire Total cost of hiring/the number of new hires More information

36 Source of hire Sourcing channel used to attract the hire More information

37 First-year resignation rate Employees who left the organization within 1 year / headcount
This number should be 0, just like 38, 39 and 40. A percentage higher than zero
will be very costly and indicates a bad fit with new recruits and the
organization. Organizations should use better selection tools and procedures to
prevent this.

More information

38 First-year turnover rate Employees who left the organization within 1 year / total number of recruits More information

39 First-month turnover rate Employees who left the organization within 1 month / headcount More information

https://www.analyticsinhr.com/blog/14-hr-metrics-examples/

https://www.analyticsinhr.com/blog/hr-reporting-hr-report-hr-dashboard/

https://www.analyticsinhr.com/blog/recruiting-metrics/

40 First-month turnover rate Employees who left the organization within 1 month / total number of recruits More information

41 Hiring manager satisfaction Number of hires who perform well / total number of hires More information

42 Candidate job satisfaction Number of hires who rate themselves as satisfied in their new job / total
number of hires

More information

43 Applicants per opening Total number of applicants / number of job openings More information

44 Selection ratio Number of hired candidates / total number of candidates More information

45 Cost per hire (Total internal cost + total external cost) / total number of hires More information

46 Offer acceptance rate Number of applicants presented with a job offer / number of applicants who
accepted a job offer

More information

47 Vacancy rate Total number of open positions / total number of positions in organization More information

48 Application completion rate Total number of people who completed the application / total number of
people who started with the application

More information

49 Yield ratio Number of applicants who successfully completed the stage / total number of
applicants who entered the stage. For example:

• 15:1 (750 applicants apply, 50 CVs are screened)
• 5:1 (50 screened CVs lead to 10 candidates submitted to the hiring

manager)
• 2:1 (10 candidate submissions lead to 5 hiring manager acceptances)
• 5:2 (5 first interviews lead to 2 final interviews)
• 2:1 (2 final interviews lead to 1 offer)
• 1:1 (1 offer to 1 hire)

More information

50 Sourcing channel effectiveness Total number of impressions of the channel / number of applications of the
channel

More information

51 Sourcing channel cost Advertisement spending per channel / number of successful applicants per
platform

More information

Qualitative performance metrics

Qualitative performance metrics are best quantified on a case by case basis. For more information, click here.

https://www.analyticsinhr.com/blog/recruiting-metrics/

https://www.analyticsinhr.com/blog/employee-performance-metrics/

4 Linking Pay to Performance
via Merit Pay

The purpose of merit pay is to reward individual contributions from employees
and to encourage their best performance possible. It is often included within
the broader concept of “pay for performance.” In the past 20 years, much has
changed concerning organizational performance management practices, and
their handling of various forms of incentive pay. While some have called for
the end of merit pay plans, according to a 2019 survey by Mercer, they remain
one of the more widely used means by which US organizations determine
employee pay increases. To paraphrase Mark Twain, the “death” of merit pay
plans has been greatly exaggerated. The purpose of this chapter is to address
how merit pay can serve to reward employee contributions and encourage
individual performance. In theory, if all employees operate at peak efficiency
relative to their capabilities, the organization will thrive.

The logic behind merit pay is straightforward: If pay is more contingent
on performance, then employee motivation to achieve high performance is
increased (see Figure 4.1). Three motivational theories are relevant here:

1. Reinforcement theory states that merit pay should motivate improved
performance because the monetary consequences of good perfor-
mance are made known – the better one’s performance, the greater
the pay increase will be.

2. Expectancy theory states that merit pay should motivate improved per-
formance because performance is instrumental to the attainment of a
pay increase – improved effort to perform leads to increased pay.

3. Equity theory states that merit pay should lead to improved performance
because a pay raise is seen as a fair outcome for one’s performance input –
the more one contributes to the organization, the greater the pay increase.

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comprehensive guide to compensation, benefits, HR & employee engagement. Wiley.

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Determining What to Reward 87

A successful merit pay program will do the following:

• Reward employees for achieving performance results and exhibiting
behaviors aligned with the objectives of the organization, which ideally
are linked directly to the strategic business plan and mission of the
organization.

• Provide rewards commensurate with contributions, i.e., bigger pay
increases for stronger performers.

• Be communicated easily to employees.
• Be understood readily by employees.
• Recognize “bottom-line” considerations and the organization’s ability

to deliver pay

increases.

• Be rational, structured, and administered in a logical manner.
• Conform to legal requirements.
• Use a well-founded, credible means of evaluating performance.
• Conform with and support management philosophy.

All organizational incentives – including merit pay plans – should be
planned carefully to achieve these goals. If an organization takes the time
to design its merit pay plan carefully, it can establish a linkage between pay
and performance.

DETERMINING WHAT TO REWARD

Before a merit pay plan can be designed, the first steps are to determine:

• What the organization values.
• Which types of individual employee contributions should be rewarded.
• The organization’s ability to pay.
• The organization’s ability and willingness to communicate the plan.
• The organization’s ability to administer the plan.

Some organizations make these determinations through the planning
efforts of senior management, who refer to the overall business strategy and
mission. Other organizations use a structured human resource planning

PPerformance Pay Motivation Improved

Performance

FIGURE 4.1 Linking pay to performance.

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88 Linking Pay to Performance via Merit Pay

effort, which relies on formal performance-planning and goal-setting
activities. Other organizations make informal determinations. Steps to start
a merit pay plan are listed in Figure 4.2.

Without a clear understanding of the organization’s values and
expectations, it is possible that employee contributions that are contrary to
the organizational objectives will be rewarded. A successful plan requires
that individual goals be aligned with the organization in terms of:

• Identity, which relates to whom the organization serves and what
products and services are provided.

• Strategic plan, which relates to how the mission of the organization is
accomplished.

• Objectives, which relate to what corporate goals have been established.

Once the link between individual and organizational objectives has been
defined, merit pay can be used to align individual goals with those of the
organization. When used properly, merit pay will reinforce the accomplishment
of individual contributions that are in line with the identity, strategic plan, and
objectives of the organization.

Merit pay also must be consistent with regard to the business environment
of the organization. Business environment characteristics that support or
detract from merit pay are shown in Figure 4.3.

Verify that key prerequisites are in place:

• Top management support
• An established performance-management system that is reliable, valid,

fair, flexible, and credible

Conduct research to verify that merit pay is appropriate and workable for
the organization:

• Review of prior merit pay theory and research
• Collection of information on other employers’ experiences with merit

pay, focusing on those that are regarded as highly successful and highly
unsuccessful as well as those that are similar in management style and
organization

• Evaluation of the effectiveness of the merit pay program by establishing
a baseline of employee attitudes and perceptions about pay

Form an employee task force to oversee the development of the plan and
ensure workforce buy-in, with the following functions represented:

• Line management
• HR professionals
• Employees representing different “levels” in the organization
• Nonexempt employees, if appropriate for the organization’s culture

FIGURE 4.2 Getting started on a merit plan.

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Documenting Performance Standards 89

DOCUMENTING PERFORMANCE STANDARDS

The second step in developing a merit pay plan is to devise a system that
establishes and evaluates performance against individual objectives.
Performance standards, also known as performance goals or objectives, are
written statements that help determine the extent to which employees have
contributed to the mission of the organization. These standards establish
the basis on which employee contributions are evaluated, and they define
the expected level of performance. A variety of rating systems are used to
describe how successful an employee has been in attaining objectives. Some
examples of common performance standards are shown in Figure 4.4. The
past two decades saw an increase in organizational use of forced rankings, and
then a rather abrupt decline. While this is a story for another setting, what
has not changed is the need for clear performance standards to be
set, and then for managers and others to make use of those standards to dif-
ferentiate between levels of individual employee performance.

While establishing performance standards, it is critical to determine
which standards best meet an organization’s needs. Objective standards –
such as quality and quantity of work performed – should be assessed as well
as more intangible, subjective aspects of the job such as teamwork, coopera-
tion, and customer service.

Documentation of work standards is an essential part of the performance
evaluation process. This is most often done as an annual event in which
supervisors and subordinates discuss goals and objectives for the coming

MERIT PAY

SUPPORT DETRACT

Little previous history of
seniority-based raises

New or declining
business

Emphasis on achievement
Well-de�ned individual work

outcomes

Top-management support

Credible performance-management
system

Cultural support for giving signi�cant
rewards to some and small or no rewards

to others
Cultural support for communication of

program tenets and characteristics
High trust in management and human

resources

Unionized workforce

Highly task-interdependent
employees

Egalitarian climate

In�ationary environment

Performance difficult to measure

Low trust in management and human
resources

FIGURE 4.3 How business environment characteristics relate to
merit pay.

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90 Linking Pay to Performance via Merit Pay

year while evaluating the prior year’s performance. In some organizations,
determining and documenting work standards is a cooperative effort
between managers and employees. Other options include the following:

• Have managers determine objectives and then communicate them to
the employee.

• Have employees present goals to their managers for discussion.

However work standards are established, obtaining employee buy-in is
essential. If employees cannot comprehend the standards or accept their
reasonableness, they are unlikely to perform in a manner that is consistent
with the mission of the organization. To help ensure that employees accept
and act on performance standards, three actions should be taken:

1. Emphasize results and behaviors rather than traits. Performance standards
should reflect what the person produces (results) or what the person
does (behaviors) rather than personality characteristics (traits). For
example, it is better to measure the quality of performance by using a
result such as “number of customer complaints” or a behavior such as
“is always courteous to customers” than it is to use a trait such as “is nice
to people.”

2. Employees should participate in setting standards. For employees to act on
performance standards, they must be committed to them, which means
that they need to have a sense of ownership in the process. When
employees are given an opportunity to help establish performance

Quality
Demonstrates work quality by producing
goods or services that meet or exceed preset,
measurable standards (e.g., less than one
defect per thousand items).

Interpersonal Teamwork
Works well with others toward the
accomplishment of goals. Earns respect and
trust. Makes a contribution to the team’s
achievements. Shows consideration for the
feelings and needs of others.

Planning and Organizing
De�nes and prioritizes objectives. Installs a
thorough, appropriate plan of action.
Establishes procedures to monitor progress
toward task completion. Can manage multiple
projects, priorities, or deadlines to accomplish
long- and short-term goals.

Problem Analysis
Identi�es problems, secures relevant
information and relates data from different
sources to determine possible causes
of problems.

Quantity
Meets or exceeds speci�c production quotas
within a given period of time.

Communications
Effectively expresses thoughts verbally, in
writing and nonverbally. Listens attentively
and makes productive use of acquired
information. Gains agreement and acceptance
of plans, ideas, or activities being discussed
while incorporating others’ good suggestions.

Creativity and Innovations
Conceives, encourages, develops, and applies
imaginative concepts that improve operating
procedures and efficiencies, or that make
better use of company assets.

FIGURE 4.4 Examples of common performance standards.

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Establishing a Merit Budget 91

goals and objectives, they are more likely to feel as if they “own” the
process and to protect their ownership interests by meeting the
standards.

3. The standards should be flexible. It is the nature of work and organizations
to be in a constant state of flux. Consequently, performance objectives
and standards that are viable now may – because of influences outside
the control of the employee – become obsolete. An organization should
be willing to modify standards as shifting demands dictate.

ESTABLISHING A MERIT BUDGET

A fundamental feature of any merit pay plan is an established budget that
has been endorsed by management. Every year that a merit pay plan is in
effect, the budget process should consist of two key activities:

• Determine the size of the budget.
• Allocate funds to business units within the organization.

Determining Budget Size

Salary-increase budgets are typically established each year based on many
factors, including:

• Actual or anticipated organization financial results
• Cost-of-living and/or inflation
• Industry trends
• Competitive factors such as retention rates and recruiting successes
• Cost of labor and the competitive position of the organization’s pay in

the marketplace
• Group (e.g., division or department) performance and needs

In most organizations, it is common to obtain or develop salary budget
surveys each year that show expected increase rates for similar employers.
WorldatWork and many of the major compensation consulting groups con-
duct annual salary budget surveys and publicize their findings widely.

On the basis of survey information, and after taking into account the
organization’s financial situation, senior management ordinarily will
approve a not-to-be-exceeded “bottom-line” increase budget computed as a
percentage of current payroll. Recently, merit-increase budgets have aver-
aged approximately 3 percent annually.

Determining Budget Allocation

The next step in the budget process is to determine how funds are to be
distributed to business units within the organization. A common method of
allocating merit pay dollars is to use a uniform budget. Under this procedure,

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92 Linking Pay to Performance via Merit Pay

merit pay budgets are distributed to divisions or departments as a percent-
age of “eligible payroll,” which is defined as the aggregate base salaries of all
employees who are eligible to participate in the merit pay plan.

Eligibility may be driven by a calendar date. Some organizations include
only those employees who have exceeded a minimum service requirement
such as six months at the time of their expected date of increase. Other
organizations will include all employees on payroll, but will prorate increases
for those employees with a partial year of service.

Using the uniform-budget approach, every business unit in the organiza-
tion shares proportionally in the amount of money available for salary
increases. Figure 4.5 is an example of a uniform-budget allocation.

Use of uniform budgets fails to take into account that some business
groups are more or less successful than are others. Furthermore, in organi-
zations with geographically dispersed business activities – some of which
may be located in areas with different cost-of-living, inflationary, or competi-
tive pressures with respect to the workforce – a uniform budget may be
inappropriate.

To respond to differing achievement levels of the various business units or
the need to pay different wages in certain locations, some organizations use
a flexible-budget approach. The flexible-budget method introduces a level
of complexity into the budget process that is not present in uniform merit
budgets. Unlike uniform budgets, flexible budgets require sound measures
of business-unit performance and geographic pay differences to distribute
budget dollars. Many organizations are ill-prepared to track or calculate
these differences accurately. Figure 4.6 is an example of a flexible-budget allo-
cation (budget percentages have been rounded). In this example, Marketing
and Production were viewed as contributing more significantly to company
performance in the prior year than other departments, and were allocated
higher merit budget percentages. Additionally, Finance and Human
Resources are located at headquarters, which has a lower cost of living, and
were allocated smaller merit budgets.

Department

Total Payroll
Dollars

Merit Budget

Percentage

Merit Budget
Dollars

Finance $2,450,500 4.0% $98,020

Human Resources $1,750,900 4.0% $70,036

Marketing $4,375,055 4.0% $175,002

Production $7,980,250 4.0% $319,210

Totals $16,556,705 4.0%

$662,268

FIGURE 4.5 Example of a uniform-budget allocation.

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Policy Decisions 93

SETTING MERIT PAY POLICY

The essential goal of a merit pay plan is to link pay to performance in a way
that is consistent with the mission of the organization. To cement this link,
pay increases must vary according to the level of an employee’s contribu-
tions and efforts. There are two required conditions:

• Variations in employee performance must be measurable and measured.
• Managers must be provided with the necessary “tools” to determine the

appropriate rewards.

These tools are to be found in the established guidelines or policies that
govern pay increases as well as in the process for implementing these guidelines.

POLICY DECISIONS

Key factors in creating a merit pay policy are the size, timing, and delivery of
merit increases.

Size: Absolute vs. Relative

The size of pay increases is a critical component in merit pay programs. Two
conditions are necessary to motivate employees most effectively to meet and
exceed performance standards for their positions:

• The absolute size of the merit increase must be significant enough to
make a noticeable difference to employees (e.g., the increase must not
be so trivial as to be deemed inconsequential). The failure to provide
noticeable differences in pay is a common complaint made against
many merit pay plans in action.

• The relative size of the increase must be significant enough that real differ-
ences in performance are recognized by meaningful differences in rewards.

DEPARTMENT TOTAL PAYROLL
DOLLARS

MERIT BUDGET
PERCENTAGE

MERIT BUDGET
DOLLARS

Finance $2,450,500 $75,966

$63,032

$188,099

$335,171

$662,268

$1,750,900

$4,375,055

$7,980,250

$16,556,705

3.1%

3.6%

4.3%

4.2%

4.0%

Human resources

Marketing

Production

Totals

FIGURE 4.6 Example of a flexible-budget allocation.

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94 Linking Pay to Performance via Merit Pay

A successful merit pay program will ensure that increases awarded to the
“best” contributors will be substantially greater than increases awarded to
average or below-average performers. If differences among pay increases are
deemed by recipients to be trivial, the merit pay program will be under-
mined because employees will not be motivated to improve their perfor-
mance. For example, a merit pay program that provides 1 percent increases
for “exceptional” performers is likely to be perceived by employees as not
providing significantly different rewards. However, a merit pay program that
offers an additional 4–5 percent increase for exceptional performance is
more likely to alter employee behavior and be motivational.

Timing: Anniversary vs. Common Review

Another issue that must be addressed is the date merit-increase decisions
are made. Survey data suggest that common review dates are used by almost
two-thirds of organizations, while one-third stagger increases, mostly by
providing them on anniversary dates.

Using an anniversary-date approach spreads the administrative burden
(tasks such as completing performance reviews, making increase decisions,
and processing pay increases) throughout the year for managers and human
resources staff. Payroll increases also are staggered, reducing the financial
impact that accompanies a single jump in salaries. Also, the anniversary-date
approach focuses the performance evaluation and increase on an individual
employee, ideally leading the employee to believe the process is focused
specifically on him or her.

A disadvantage of an anniversary-date approach is that relative perfor-
mance (e.g., comparative evaluations), may be hard to judge, particularly if
performance is evaluated at different times for all employees. Another
disadvantage becomes evident when conservative budget management
accentuates the natural tendency of many managers to “save” money until
year-end. When this occurs, employee increases at the beginning of the year
may be smaller than increases at the end of the year, and the result may be
to penalize some employees unfairly.

A common (i.e., annual) review date consolidates the administrative
burden for management and human resources, and increases can become
part of the yearly budgeting process. Further, because increases for all
employees are determined at the same time, appraisal ratings for all employ-
ees can be collected and relative performance can be factored into the deci-
sion more easily. If the merit budget is based on business-unit performance,
the linkage among business-unit performance, individual performance, and
merit increases can be clearer with a common date.

Disadvantages of common review dates are that the workload may be
onerous if the timing of the salary-increase program coincides with other
major efforts (such as year-end financial closings, open enrollment for
benefits, and departmental budgeting), and cash-flow implications for the
organization may be extreme when all increases occur simultaneously.

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Policy Decisions 95

The decision concerning whether to use an anniversary-date versus a
common-review-date approach to administer merit increases should be
determined by the availability of performance data for employees and
organizational units, and the availability of management and human
resources. In organizations where budgets for salary increases are allocated
based on organizational performance during a fixed period of time,
employee and departmental performance also may be evaluated during the
same time period. In such cases, a common review date might make sense.
Anniversary-date increases might be more appropriate in organizations that
stagger appraisals of performance or that permit little or no increase-budget
variability among departments and in organizations that want to emphasize
the individual’s performance against absolute standards instead of empha-
sizing relative performance.

Another issue is whether to permit variability in time between increases in
the pay program. In some organizations, the time between increases is not
uniform for all employees; rather, performance differences are reflected
not only in the size of increase but also in frequency. Excellent performance
may be rewarded with larger and more frequent rewards. For example, top
contributors might receive relatively large pay raises every 6 to 9 months,
while average performers might wait 12 to 15 months for a lesser increase.

Delivery: Base vs. Lump Sum

Under traditional merit pay plans, merit increases are built into employees’
salaries for as long as they remain with the organization. Hence, the increases
are permanent, and their values are compounded over time as additional
increases are granted.

An alternative to base-salary increases is the use of lump-sum increases.
Lump-sum increases are one-time payments made in lieu of a traditional
base-pay increase, and they typically are delivered annually via the merit pay
program. Similar to a “bonus” payment, a lump sum must be re-earned each
year based on performance – it is not built into base salary. Often, lump-sum
payments are provided to employees who are near, at, or over the maximum
of their salary range (often called “red circle” employees).

The advantages of lump sum increases for the organization are clear:
While retaining a pay-for-performance relationship, payroll costs over time
are lessened because of the lack of a compounding effect. Also, the “sanc-
tity” of pay ranges is protected because the number of red-circle employees
can be controlled. In organizations where employees are at or over the max-
imum of their grade, but are not permitted to receive increases, lump sums
provide a mechanism to continue to reward and motivate strong but highly
paid contributors.

There are fewer advantages of lump sums for the employee, though
receiving the annual increase at once rather than having it paid out over
12 months – as is the case with a base-pay increase – may appeal to some. For
long-term and highly paid employees, who may be near the top of their

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96 Linking Pay to Performance via Merit Pay

salary range with no room to grow, lump sums provide a means to continue
to receive rewards.

Frequently, lump sums issued in lieu of merit increases are a concern for
employees because their base pay will be less over time. Longer-term employ-
ees approaching retirement typically exhibit the most concern. Many
employers allay this concern by counting lump sum awards toward final
average-earnings pension calculations. Similarly, such payments often are
tied to benefits. For example, benefits such as life insurance, which are
linked to salary, will reflect lump sum payments in addition to base salary.
This solution addresses a number of issues:

• The motivational link between performance and reward can be
maintained.

• The organization reaps the benefit that lump sum payments provide in
controlling total compensation costs.

• Employee benefits entitlements are not seriously reduced.

However, caution should be used with this approach because employees
may react negatively when their base salaries do not change or grow relatively
slowly over time.

POLICY IMPLEMENTATION

A merit pay policy answers the following questions about salary increases:
How much? When? How? How frequently? These decisions can be summa-
rized in a simple compensation tool called a merit pay matrix. A merit pay
matrix details the amount and timing of increases for various levels of
performance at various locations in the pay grade. A merit pay matrix may
be interpreted as an operational statement of an organization’s pay-for-
performance theory or policy. It spells out the contingency between pay and
performance in specific terms.

Merit pay matrices range from simple to complex, depending on the
number of variables on which pay is made contingent. Generally, there are
three alternatives for issuing merit increases:

• Based only on performance
• Based on performance and position in range
• Based on performance and position in range using variable timing

Performance

This method, which uses the simplest form of merit matrix (Figure 4.7), is
most common in organizations without well-defined salary grade structures.
Pay increases are granted based solely on performance, resulting in top
performers receiving bigger increases than lower performers. Typically,
salary increases are calculated as a percentage increase in base pay.

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Policy Implementation 97

Note: The matrices displayed in Figures 4.7, 4.9, and 4.10 use ranges of
increases, rather than single percentages. This provides for more manage-
rial discretion in awarding increases, and it more closely links pay and
performance. In some companies, however, each cell of the matrix is
occupied by only a single number.

Basing merit increases on performance alone ignores internal pay com-
parisons. Within a performance class, higher-paid employees receive greater
absolute increases, even though the merit percentage reward is the same.
This has the effect of perpetuating pay inequities that might exist, and it may
reward long-tenured and/or highly paid employees disproportionately.

An alternative is to calculate merit increases as a percentage of the
employee’s salary-grade midpoint rather than their base pay. This approach
provides larger relative dollar increases to employees within a performance
class who are paid lower in their salary range than it does for employees who
are high in their range (see Figure 4.8). Over time, inequities in salaries of
employees in the same salary grade will be reduced as lower-paid employees
are accelerated toward midpoint and higher-paid employees are “slowed
down.” This method reduces some of the bias toward long-term/highly paid
employees that may be inherent in a performance-only merit matrix.

The advantage of either approach to calculating merit increases based
only on performance is that the method is:

• Simple to budget
• Easy to administer
• Straightforward to communicate

Performance and Position in Range

Larger organizations may have more complicated grading structures that
base increases on both performance and position in range, which is
commonly defined by quartiles, or, if greater precision is required, by
compa-ratios. This practice is based on the concept that the midpoint repre-

Performance
Rating

Fixed Increase
Amount

Discretionary
Increase Amount

Outstanding 8% 6–10%

Consistently Exceeds
Standards

5% 4–6%

Meets Standards 3% 2–4%

Does Not Fully
Meet Standards

0% 0–2%

FIGURE 4.7 Linking merit increases to base pay.

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98 Linking Pay to Performance via Merit Pay

sents a “competitive” or “fair” wage for a particular set of skills in the market-
place, and that, over time, employees with a similar level of sustained
performance should be paid an equivalent amount. Thus, a merit-increase
guide chart similar to Figure 4.9 will cause employees with the same perfor-
mance to converge, over time, on a target point (typically the midpoint) by
awarding bigger increases to employees lower in their range and smaller
increases to employees higher in the range.

Increase as a Percentage of Base Pay

Employee
Current
Pay Rate

Increase
Percentage

Increase
Dollars

A $25,000 4.0% $1,000

B $35,000 4.0% $1,400

C $45,000 4.0% $1,800

Increase as a Percentage of $35,000 Midpoint

Employee
Current
Pay Rate

Increase
Percentage
of Midpoint

Increase
Dollars

Effective
Increase

Percentage

A $25,000 4.0% $1,400 5.6%

B $35,000 4.0% $1,400 4%

C $45,000 4.0% $1,400 3.1%

FIGURE 4.8 Linking merit increases to salary-grade midpoints.

Position in Range Before Increase

Performance
Rating

1st Quartile
or Below

2nd
Quartile

3rd
Quartile

4th
Quartile

Outstanding 8–9% 6–7% 4–5% 3–4%

Consistently
Exceeds
Standards

6–7% 4–5% 3–4% 2–3%

Meets Standards 4–5% 3–4% 2–3%

Does Not Fully
Meet Standards

0–2%

X X X

FIGURE 4.9 Linking merit increases to performance and position in range.

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Policy Implementation 99

A merit-matrix approach has several advantages:

• The tendency is reduced to perpetuate tenure-based pay inequities and
to continue to “overpay” (relative to market) highly paid employees.

• The approach is more likely to be deemed “fair” by the workforce
because, over time, employees with similar performance in the same
salary grade will tend to be paid comparably.

Basing merit increases on both performance and position in range introduces
a level of complexity into the process not found in the simpler performance-only
model. Of course, it is also more difficult to administer and communicate.

Performance and Position in Range Using Variable Timing

A more complex model for administering merit increases involves the con-
cept of variable timing. The guide chart shown in Figure 4.10 demonstrates
how the size and frequency of increase can be varied based on performance
and position in range. In this model, top performers receive bigger and
more frequent increases, while average and below-average contributors wait
longer for smaller increases.

There are several advantages to this approach:

• Top performers will receive bigger rewards with greater frequency,
yielding significant increases because of the compounding effect.

• During times of tight budgets, rather than issuing “below market”
increases at regular intervals, “normal” increases can be granted at
moderately delayed intervals. For example, rather than granting a
3.5 percent increase at 12 months, an organization may prefer to grant a
4.7 percent increase at 16 months.

Performance
Rating

1st Quartile
or Below

2nd
Quartile

3rd
Quartile

4th
Quartile

Outstanding
8–9%

6–9 months
6–7%

9–12 months
4–5%

10–12 months
3–4%

12–15 months

Consistently
Exceeds
Standards

6–7%
8–10 months

4–5%
10–12 months

3–4%
12–15 months

2–3%
15–18 months

Meets
Standards

4–5%
9–12 months

3–4%
12–15 months

2–3%
15–18 months

Does Not
Fully Meet
Standards

0–2%
12–15 months

X X X

FIGURE 4.10 Linking merit pay to position in range using variable timing.

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100 Linking Pay to Performance via Merit Pay

The disadvantages of variable timing are:

• It is much more complicated to administer.
• It is difficult to track and maintain budgets.
• It is difficult to monitor the consistency of application throughout the year.
• It is more complex to communicate.

A successful merit pay plan requires more than well-developed policy state-
ments and a conceptually sound design. It also requires administrative processes
and procedures that are logical and easily understood. Some of the administra-
tive issues that should be given consideration to ensure that a policy is
implemented as intended are communication, training, and perceived fairness.

MANAGING A MERIT PAY PLAN

The merit pay “equation” is simple: Significant performance efforts yield signifi-
cant rewards, which in turn motivate significant performance efforts. However,
this equation relies on trust to enforce the contract between employees and the
organization. Employees must trust the organization to fulfill its commitment
that today’s efforts will be compensated fairly tomorrow, and the organization
must trust that employees will be motivated by performance-based rewards.

As in any relationship, trust can be promoted through openness and
candor, or thwarted through secrecy and obfuscation. Honest, open commu-
nication between management, human resources, and employees serves as
the means by which the messages of merit pay can be conveyed and reinforced.

Traditionally, many organizations have been unwilling to share much of
their compensation-related data. Usually, these organizations have the
mistaken belief that employees neither want nor need to know about such
matters, and that providing “too much” information to employees somehow
reduces management’s ability to exercise flexibility and discretion.

Today, more organizational leaders understand that no matter how
carefully designed a compensation program might be, success requires
adequate communication. Thorough communication permits employees to
test the validity of the organization’s promises while conveying to them that
the organization has nothing to hide. It also establishes opportunities for
dialogue on issues of critical importance, enhances credibility by obtaining
employee buy-in, and promotes overall trust.

A successful communication program requires a careful balance between
an insufficient amount of information and too much information.
Management should release enough information about the plan to demon-
strate its faith in the process, but not so much information that its ability to
exercise managerial discretion is impeded. Employees should be provided
enough information about the merit pay plan that it serves as a performance
motivator without breaching their right to privacy.

How much to communicate to employees will be influenced by many fac-
tors, including the organization’s culture, management’s willingness to share
information that traditionally may have been confidential, and the readiness

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Perception of Fairness 101

and ability of human resources to support the communications effort. Some of
the key elements often introduced in a comprehensive communications
program are:

• General information about the performance-appraisal program and process.
• General information about the organization’s compensation program

(e.g., how pay is determined, how jobs are evaluated, and what the salary
ranges are).

• More specific information about the merit pay program (e.g., salary-in-
crease budgets, performance-rating distributions, and merit matrices).

• Size of an individual’s increase, minimum, and maximum raises grant-
ed and average size of merit increases.

TRAINING

Implementation of a successful merit pay program requires managers to
make two key sets of decisions:

• Evaluation of performance
• Allocation of increase awards

An accurate, reliable, and credible performance-appraisal program is the
foundation of a successful merit pay program, and it is imperative that man-
agers and supervisors be capable of evaluating employee behaviors and
results objectively and critically.

The skills required to appraise performance, assess employee contribu-
tions, and assign rewards are not intuitive. To ensure adequate interpreta-
tion and understanding of program requirements and consistent application
of program tenets, training should be provided for all managers who are
given the task of implementing the merit pay program. Training should
include the following components:

• How to plan performance that links individual efforts and accomplish-
ments to business plans and strategies.

• How to measure and evaluate performance fairly and consistently.
• How to provide feedback through intrinsic (e.g., coaching and praise)

and extrinsic (e.g., pay increases and incentive payments) rewards.
• How to use the merit matrix to allocate rewards.
• How to communicate the assessment of performance and the alloca-

tion of rewards to employees.

PERCEPTION OF FAIRNESS

Program credibility is key to gaining a favorable response among employees
to merit pay. Employees need to feel that increases and the process used to
derive the increases are accurate and fair. To help ensure the perception of
fairness, the merit pay program should incorporate the following tenets:

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102 Linking Pay to Performance via Merit Pay

• Relevant laws and regulations must be followed (e.g., Title VII of the
Civil Rights Act, the Fair Labor Standards Act, and various tax laws).

• Employees should participate in setting performance goals and stand-
ards, they should know what performance is expected of them, and
they should be able to control the specific aspects of their performance
on which their pay will be based.

• Employees should know and understand how the pay program works,
and they should be encouraged to raise concerns, ask questions, and
seek clarification on their increases.

• An appeals process should be established to provide employees with an
opportunity to discuss their performance evaluation and their increase
with an authority other than their direct supervisor.

HOW TECHNOLOGY ASSISTS PLAN ADMINISTRATION

The most conceptually and theoretically sound merit pay program is burden-
some and inefficient to administer. Consequently, anything that contributes to
simplifying planning and administration will help ensure the program’s success.

Computer technology can assist in the management of the merit pay plan
in a number of ways:

• Budget planning can be facilitated by generating different increase-
matrix models, testing various options and deriving forecasts of the
economic impact of alternatives.

• Data can be probed to evaluate the effectiveness, impact and equity of
the merit pay plan. Increases, performance distribution, and other fac-
tors can be analyzed by department, position, organization, or individual.

• Employee records can be stored, monitored, and analyzed over time.
• Data can be managed to formulate cost projections based on salary-

structure changes, the impact of inflation, and other financial factors.
• Summary reporting can be streamlined for internal and external

purposes, tedious administrative tasks and reporting efforts can be
automated, and productivity can be improved by reducing the amount
of time, labor, and expense involved in managing the pay program.

EVALUATING A MERIT PAY PLAN

To ensure that a merit pay plan is operating as intended and is effective in
meeting an organization’s compensation needs, systematic, post-implemen-
tation evaluation of the plan should be conducted. This often-overlooked
step is critical to the ultimate success and acceptance of the program. Many
factors can be analyzed to assess plan effectiveness:

• Employee satisfaction with the pay program.
• Employee job satisfaction.

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Merit Pay Advantages and Disadvantages 103

• Employee perception that pay is based on performance.
• Employee acceptance of and trust in the performance-appraisal process.
• Employee trust in management.
• Employee and organizational performance (e.g., productivity improve-

ments).
• Employee commitment to the organization as demonstrated through

reduced turnover and absenteeism rates.
• Correlation between actual performance ratings and actual merit

increases.

Measurement of these success factors before and after implementation of
a merit pay plan is likely to yield the most meaningful information, and it
can be accomplished through various means: controlled empirical studies,
employee-attitude surveys, focus-group discussions, and management and
employee anecdotal feedback. Employee attitudes and perceptions ideally
should be evaluated by collecting survey data from employees before the
introduction of a merit pay plan, and again after the program has been
introduced, and employees have received their first merit increases.

Some organizations attempt to gauge the success of newly introduced
merit pay plans by measuring productivity and/or performance improve-
ments over time and then correlating that information with appraisal ratings
and salary increases. Also, turnover and absenteeism rates can be tracked and
correlated with performance and salary increases. These data could be used
to modify development of the plan, but it should be remembered that many
other factors, including industry and economic trends, can also affect these
factors. For example, high unemployment rates will tend to drive down turn-
over rates, regardless of employee satisfaction with corporate pay plans.

Because employee perception of fairness is so important in determining
the success of the merit pay program, one analysis that should be performed
is to test how accurately, fairly, and consistently the program has been admin-
istered throughout the organization. Some common employee questions
that need to be addressed to demonstrate the fairness of a merit pay plan are:

• Does where or for whom you work mean more than how well you
perform? Do some departments rate employee performance dispro-
portionately high, and are some supervisors unfairly critical while
others are unreasonably generous?

• Are all employees afforded a relatively equal opportunity for high per-
formance ratings and commensurate increases? Is the plan free from
racial, gender, and age bias?

MERIT PAY ADVANTAGES AND DISADVANTAGES

While merit pay remains a common means of determining pay increases,
the potential drawbacks of the approach should be clear before implemen-
tation. Once these drawbacks are recognized, an organization can appreciate

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104 Linking Pay to Performance via Merit Pay

the advantages of merit pay and how it will improve employee perceptions
of work and rewards (see Figure 4.11).

As is true with any reward system, merit pay must be compatible with an
organization’s culture and philosophy if it is going to be effective. For example,
merit pay will not work for an organization that values tenure over performance.
Also, merit pay may be inappropriate for organizations that are trying to empha-
size group instead of individual performance. By rewarding individuals, merit
pay can undermine the cooperation and interdependency that are needed in a
team environment. However, it may be possible to preserve the best elements of
a team environment while rewarding the highest-performing individuals by
integrating group-based incentives with some form of merit pay system.

Merit pay will not work unless an organization has a sound system of meas-
uring individual employee performance that is accepted by the work force.
Even if a good performance-appraisal system exists, merit pay may be
discouraging to “average” or “below average” employees, who typically will
fail to qualify for high pay raises. By tightly linking pay and performance,
merit pay also can deemphasize the intrinsic rewards and satisfaction gained
simply from doing a job.

By linking a merit pay program with a sound communications strategy, an
organization can clarify its performance expectations and create an atmos-
phere of trust between employees and management. This atmosphere tends
to increase overall employee satisfaction with work and pay, and it is likely to
lead to improved individual performance.

The main reason an organization chooses a reward system is to enhance
its competitiveness, productivity, and bottom-line results. Positive financial
results are more likely when an organization places emphasis on employee
performance instead of tenure, and highly motivated employees are more
likely to be attracted and retained when their efforts are rewarded regularly.
A merit pay system can help ensure that an organization’s rewards policy fits
the performance-based philosophy it needs to survive and prosper.

MERIT PAY

ADVANTAGES DISADVANTAGES

Helps improve employee
satisfaction with work and

pay as well as individual
performance

Rewards performance rather
than seniority or skills

Clari�es performance expectations

Attracts and retains highly motivated
employees

Rewards individual performance,
not group performance

Depends highly on a sound
performance-appraisal system

Clashes with organizational emphasis
on tenure

De-emphasizes intrinsic work rewards
while possibly discouraging “average”
and “below average” performers

FIGURE 4.11 Advantages and disadvantages of merit pay.

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Linking Results and Competencies to Business Strategy 105

LINKING RESULTS AND COMPETENCIES
TO BUSINESS STRATEGY

A performance management system functions as a management tool to help
ensure that employees are focused on organizational priorities and opera-
tional factors that are critical to the organization’s success.

Organizations should operate from business strategies that include criti-
cal, measurable success factors. These include:

• Financial success (e.g., return on investment, return on sales)
• Productivity (e.g., cost per labor hour, units per day)
• Quality standards and customer service (e.g., customer satisfaction

scores, waste, and reject indices)
• Work environment (e.g., attitude survey scores, employee grievances)

An organization’s critical success factors form the basis for key result areas
for the measurement of organizational, department, team, and individual
performance. Key result areas define what is to be accomplished (e.g., the
job’s end results, which in turn reflect the job’s primary purpose) and gener-
ally are defined as key responsibilities, one-time or periodic projects, or
annual objectives. Examples of key result areas are:

• Types and proofreads department correspondence and reports
• Researches leading practices in the area of real estate acquisition
• Develops and implements a new purchasing management system

In addition to key result areas, an organization may include the identifica-
tion of competencies that focus on how results are to be attained.

Competencies generally are defined as the knowledge, skills, and abilities
exhibited by individuals as they work to accomplish key result areas.
Competencies may be developed universally for the organization, for job fami-
lies or for individual jobs. Competencies often are selected to reflect an organi-
zation’s values and may include some or all of the areas listed in Figure 4.12.
These factors should be included in the performance management process and
used as input when evaluating performance at the end of the assessment period.

While using competencies, it is important to identify specific behaviors
associated with them. For example, associated behaviors for teamwork may
be communicating openly with others and achieving win–win solutions

• Teamwork
• Achievement orientation
• Customer service orientation
• Relationship building
• Analytical thinking
• Developing others

FIGURE 4.12 Examples of competencies.

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106 Linking Pay to Performance via Merit Pay

while working with peers. Generally, organizations identify 5–10 competen-
cies to focus employees on key organizational priorities.

If an organization has developed comprehensive performance measures
that are evaluated and used regularly to manage overall organizational per-
formance, these measures should be included in the system so all employees
can focus their priorities and energies on these strategies. For example:

• If an organization has established a company-wide quality or customer
service performance measure, it should be incorporated into individu-
al performance plans at all levels.

• If teamwork is a key organizational value, the performance manage-
ment system should hold each employee accountable for behaviors
identified with teamwork.

• If maintaining a positive environment and high employee morale are
organizational priorities, managers should be held accountable for the
environment and morale in their work units.

DETERMINING THE PERFORMANCE MANAGEMENT CYCLE

Any performance management system is an ongoing cycle. For most organiza-
tions, the typical performance period cycle is one year, although this period may
vary depending on business cycles and probationary periods for new hires,
promotions, and transfers. The cycle also may be determined by the link to
organizational measurements of success. For example, if financial measurements
are included in the system, the performance cycle may be tied to the fiscal cycle.
If an employee is involved in a project team with specific target dates for various
stages, the performance management cycle may reflect the project’s schedule.

The design team should consider the typical performance management
cycle within the organization. This cycle is likely to consist of three phases:
planning performance for the upcoming period, coaching performance,
and giving feedback throughout the period and evaluating performance for
the just-completed period.

Phase I: Planning Performance for the Upcoming Period

Planning performance for the period includes defining key results for each
position as well as establishing performance standards against which key
result areas are measured. The design team should consider the most appro-
priate approach to conducting the performance planning process, focusing
on the roles that will be played by HR, immediate supervisors, and employees.

In many organizations, HR will be responsible for working with line man-
agement to devise a framework for developing key result areas and perfor-
mance standards. HR also typically is responsible for developing training
materials to communicate the approach to line management and employees
and for training line management and employees in the performance

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Determining the Performance Management Cycle 107

planning process. After training has been completed, HR often works with
line management to ensure that performance plans are developed appro-
priately. This function also may be accomplished by appointed performance
planning teams that include employees from all levels of the organization
who have been trained to help facilitate the performance planning process.

Because the performance planning process requires detailed knowledge
of job responsibilities and performance expectations, line management
should play a significant role in the process and be ultimately accountable
for the performance plans of their employees.

The advantages of having managers and/or employees define key results
and establish performance standards each period include:

• Managers and/or employees can structure each job to the individual’s and
the department’s best advantage, increasing flexibility in what is measured.

• Managers and/or employees are more knowledgeable about their
department’s day-to-day needs.

• Job responsibilities and standards can be modified to reflect special
projects or assignments for the period.

At the same time, HR can play a key role by providing coaching and train-
ing, and by ensuring consistency of key results and standards throughout
the organization.

Typically, each position should list 5–10 key results that support the organ-
ization’s business strategy. If more results are listed, they no longer are likely
to include only “key” results of the job. If fewer results are listed, the full
scope of responsibilities might not be closely defined.

In most cases, all key results do not have equal impact on the job. It is
common practice to assign a weight of importance to each key result based
on impact, frequency, and relative significance to the overall list of responsi-
bilities as well as to the department and the organization. Weights may be
determined informally and discussed when planning performance for the
period. Weights also may be assigned to each key result, using:

• Percentage weighting (adding up to 100 percent)
• Numerical weighting (1 = highly significant, 2 = significant, 3 = moder-

ately significant, 4 = insignificant, 5 = highly insignificant)
• Word descriptions (critical, important, etc.)

The design team should decide how weighting will be handled, keeping
in mind both the organization’s culture and the desired goals of the system.
Results that best meet the organization’s overall goals generally should be
assigned the greatest weight.

Phase II: Coaching Performance and Giving Feedback throughout
the Period

An important step for the design team involves the concept of open, honest,
positive, two-way communication between supervisors and employees throughout

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108 Linking Pay to Performance via Merit Pay

the period. The goal of a performance management system should be to
improve employee performance, not to find an easier way to terminate an
employee for poor performance. Therefore, a system should emphasize
coaching and feedback from the supervisor as well as feedback and input
from the employee throughout the performance period.

The design team should plan structured feedback throughout the period,
including mid-period, quarterly, or monthly progress reviews. A more struc-
tured feedback approach works especially well for poorly performing
employees who require more frequent monitoring and coaching. Feedback,
which should include constructive criticism, should be offered in a private,
formal setting. In addition, the system should encourage supervisors to give
informal feedback throughout the period. This is especially true for positive
feedback, which may include verbal praise or even a brief suggestion to “Try
doing it this way next time.” Employees should be encouraged to ask for
frequent feedback from their supervisors.

Phase III: Rating Performance for the Just-Completed Period

One of the most challenging aspects of developing an individual perfor-
mance management system is developing the approach for rating employee
performance. When identifying an approach, it is important to focus on the
characteristics of the organization and the objectives of the performance
management system. For example, a traditional hierarchical organization
tends to focus on judging employees’ past performance. An organization
oriented toward total quality management might focus less on judging past
performance and more on strategies to improve future performance.

PERFORMANCE RATING APPROACHES

Deciding on the number of categories in the rating scale is not without con-
troversy. On the one hand, the more levels of performance that are identi-
fied, the more accurately performance may be evaluated. For example,
rating an employee on a scale with five performance levels (e.g., consistently
exceeds expectations, exceeds most expectations, meets expectations, does
not meet most expectations, does not meet any expectations) seemingly dif-
ferentiates performance more accurately than does a three-point scale (e.g.,
exceeds expectations, meets expectations, does not meet expectations). On
the other hand, how does one objectively differentiate performance at each
of the five levels? If one is measuring units of production in a factory or
words typed per hour, objectively identifying performance at all five levels
may be possible. However, in a service-based work environment, it often is
not feasible to implement performance standards at five levels. Evaluating
performance then becomes the subjective judgment of the supervisor, and
it is difficult to communicate so that employees understand the performance
expectations at different rating levels.

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Performance Rating Approaches 109

For example, within a manufacturing operation in which five perfor-
mance levels may be appropriate, making five units per hour may be consid-
ered level-five performance, making four per hour may be considered
level-four performance, and so on. When evaluating performance in this
environment, there is little or no interpretation as to the performance rat-
ing that should be given.

However, in an environment in which it is difficult to compare perfor-
mance against established standards, such as a service or office environment,
the question is whether it is acceptable for supervisors to make subjective
judgments among the different levels of performance. Further, although
most supervisors believe they can make this differentiation, they find it virtu-
ally impossible to communicate these distinctions to employees in a way that
employees can understand and accept. For example, if one of an administra-
tive assistant’s responsibilities is to make travel arrangements through a
travel agency, how will a supervisor identify and communicate the five levels
of performance so they will be accepted by the employee?

In addition, it is a common perception among employees that it is unac-
ceptable to be rated more than one level below the top rating. In fact, super-
visors often rate employees one level below the top to minimize conflict and
avoid spending a significant amount of time attempting to justify the perfor-
mance rating. For example, in the five-point rating scale, a rating of “meets
expectations” has the connotation of “average” and would generally be per-
ceived as unacceptable, even though it is acceptable. Because of these
perceptions and an increasing focus on improving future performance, the
trend is toward using fewer rating categories when using rating scales – in
many cases, as few as three. With the three-point scale, only one level of
performance falls above “meets expectations” or acceptable performance.

When determining ratings levels, it is important to focus on definitions that
compare performance to performance expectations, such as “consistently
meets expectations” or “frequently exceeds expectations.” It is equally impor-
tant to avoid ratings that compare employees, such as “average” and “above
average.” Many organizations today favor not only fewer performance rating
levels but also nonquantified ratings systems. Although it may be tempting to
view performance management as an objective and precise process that can
be weighted and scored, in most cases it is a subjective process based on super-
visors’ judgments that are difficult to communicate. Many organizations have
concluded, therefore, that performance management systems should include
rating levels that are fewer in number and that are qualitative.

Using Summary Ratings

The design of a summary rating should focus on the objective of the system.
With that in mind, the design team may consider three options:

1. Summary point scores. In a weighted and scored system in which the rat-
ing of each key result is assigned a number (consistently exceeds

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110 Linking Pay to Performance via Merit Pay

expectations = 5; exceeds most expectations = 4; meets expectations = 3,
etc.), the overall rating is a point score. The issue, then, is to convert
the overall point score back into a rating category.

2. Summary labels. If the purpose of the system is primarily to judge past
performance, and if the method for evaluating performance is fairly
objective, then the use of rating categories, or “labels,” may be appro-
priate. These labels may be the same as those used to rate each key
result: “consistently exceeds expectations,” “exceeds most expectations,”
“meets expectations,” and so on.

3. Summary statements. To reduce the subjectivity of performance manage-
ment systems and increase the focus on continuous improvement,
organizations have tended to move away from rating categories or
labels toward summary statements that are behavior-oriented and more
focused on future improvements. For example, suppose Joe’s perfor-
mance occasionally fails to meet expectations for the job. Joe meets
most standards and exceeds one of them, but he needs to increase his
sales per month. This overall level of performance is acceptable this
year because Joe is a new employee; however, he will be expected to
increase his output next year. Assuming most employees generally
meet performance expectations, it is much easier for the supervisor to
focus on strategies for improving future performance when there are
no summary labels. With this approach, the challenge for supervisors is
to communicate the performance evaluation clearly to employees so
there are no misunderstandings when employees are – or are not –
considered for promotions or transfers, or when they are terminated
for poor performance.

Employee Responsibility

The role of the employee is an important aspect of the evaluation process.
As organizations flatten and the scope of supervision expands, it becomes
increasingly difficult for supervisors to interact with employees to judge per-
formance. Looking at this situation along with organizational initiatives to
empower employees, the design team should consider the extent to which
employees may be involved in the evaluation process. This involvement may
include these steps:

• Evaluate their own performance.
• Complete a self-evaluation that includes identifying development plans

and career objectives.
• Gather performance-related information.
• Schedule evaluation sessions.

Employee involvement in performance evaluations can facilitate the eval-
uation process. If used as part of a multirater assessment process, employee
involvement can allow supervisors to function more as coaches and less as
judges of performance.

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Multirater Assessment 111

MULTIRATER ASSESSMENT

One question for the design team to consider is who will rate performance.
In an organization focused more on developing future performance, that
development includes a high degree of involvement by those other than the
supervisor, including the employees themselves. Under these circumstances,
a technique known as multirater assessment, or 360-degree feedback, might
be used. With multirater assessment, employee performance evaluations are
compiled by several – usually five to nine – people who come in regular,
direct contact with the employee, including peers, internal and external cus-
tomers, supervisors, and subordinates. Most important, employees are able
to evaluate their own performance.

The advantage of the technique is that the larger number of sources of
evaluative input is likely to provide a more complete, well-rounded picture
of the employee’s performance, and employees often view this picture as
more credible than single-source assessments conducted only by the super-
visor (see Figure 4.13).

The disadvantage is that the process involves greater administration to
collect, compile and distribute feedback while ensuring the anonymity of
evaluators and the confidentiality of results. Because one rater who deviates
from the others can significantly affect an employee’s evaluation, many
organizations opt to discard the highest and lowest ratings before compiling
results. Further, it can be helpful to provide feedback to raters who deviate
significantly from others so they may modify their techniques and provide
more consistent evaluations in the future. With a multirater system in place,
supervisors can assume greater roles as performance coaches rather than
acting simply as performance judges.

Although research has indicated that it is possible to obtain more objec-
tive performance feedback from multiple sources, the design and imple-
mentation of a multirater feedback system often depends on the level of

Some Users Perceive Multirater Assessment as More:
• Fair: less rating inflation, less adverse impact on diversity, and more pro-

cess and technology safeguards
• Accurate: less bias and more balance
• Credible: more believable because of respect for the opinions of multiple

work associates
• Valuable: more specific feedback and greater distinctions among perfor-

mance criteria
• Motivational: more encouragement for constructive behavior change

because of peer pressure and the desire to be recognized by the team

FIGURE 4.13 Advantages of using multirater assessments.

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112 Linking Pay to Performance via Merit Pay

employee trust that the feedback will be handled confidentially and that it
will be used appropriately. Many organizations begin by providing perfor-
mance feedback only to the individual employee. During this time, the sys-
tem is focused on improving performance rather than rating performance.
Once an appropriate level of employee trust has been established, the mul-
tirater system can evolve so both supervisors and employees receive the
information. Both can use it for evaluating performance and providing
feedback for individual development (see Figure 4.14).

Rater #1

Rater #2

Rater #3

COMMUNICATION SKILLS

Keeps other informed of speci�c issues affecting them

Listens attentively to others

Participates effectively in meetings

DEVELOPING SUBORDINATES

Provides subordinates with detailed performance
feedback on a regular basis

Empowers subordinates by delegating responsibility
and authority whenever possible
Provides subordinates with the resources needed
to get the job done

LEADERSHIP

Leads by example

Considers customer/client satisfaction to be a top priority

Challenges people to extend themselves to the fullest

PROBLEM SOLVING AND DECISION-MAKING

Is open to new and creative suggestions when solving
problems

Analyzes situations to get to the root cause of problems

Develops step-by-step solutions to problems

KNOWLEDGE AND TECHNICAL COMPETENCE

Keeps up to date with developments in his/her �eld

Is knowledgable about a number of �elds related
to his/her specialty
Is expert at performing the speci�c tasks and
technical skills required of his/her job

EVALUATION
Not

Satisfactory
Highly

SatisfactorySatisfactory

1 2 3

FIGURE 4.14 Sample multirater evaluation questions.

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Linking Performance Management and Pay Delivery 113

LINKING PERFORMANCE MANAGEMENT
AND PAY DELIVERY

Effective performance management should include both formal and infor-
mal aspects. Formal aspects include appraisals and links to incentive plans,
such as merit pay. Informal aspects include coaching, feedback, and links to
employee development. When designing a performance management sys-
tem, the design team should consider whether and how the system will be
linked to employee compensation or to the determination of pay increases.
Traditionally, an overall rating – either numerical or a rating summary – has
been developed that determines a pay increase from merit guidelines.
Although this approach directly links performance and pay, it may cause
budget overruns unless the guidelines are based on an analysis of past per-
formance rating distributions. Supervisors may overrate employees’ perfor-
mance to justify larger merit increases for them.

When there is a direct link between the performance evaluation and
merit pay increases, especially when the two are done at the same time, the
performance evaluation system is likely to be perceived as part of the pay
system. The evaluation often is focused on the “judgment” of past perfor-
mance, instead of on a positive discussion of an employee’s strengths and
weaknesses and on how performance should be developed in the future.
Further, management may lower performance ratings in some cases to
ensure that merit increases do not exceed budget, which obviously causes
negative reactions from employees.

One solution may be to separate performance appraisal ratings and pay
increases by deemphasizing the “judgment” aspect of point scores or over-
all rating labels and shifting to a narrative statement that summarizes over-
all performance. The performance appraisal may be further separated
from the pay increase by changing the timing of the two activities or by
changing the appraisal and pay cycles. For example, the performance eval-
uation may be given on each employee’s anniversary date and pay increases
may be given on a common date, perhaps based on the fiscal period.
Another solution may be to provide a merit budget to department heads
and require them to allocate pay increases to their employees on the basis
of relative performance. Department heads then have to determine who
their top performers are in order to allocate merit money without exceed-
ing budget.

Organizations need to consider carefully whether or not pay will be linked
to a performance rating, and if so, the impact this linkage will have on the
operation of the overall performance management system. If the primary
objective of the system is to determine ratings for pay increases, the system
should be designed to differentiate performance levels. Organizations that
are more interested in using performance management as a tool to develop
their employees may want to separate the performance management and
pay delivery systems to prevent either system from having a negative impact
on the other.

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114 Linking Pay to Performance via Merit Pay

Although performance may be an important factor in determining pay
increases, there may be other contributing factors such as the rate at which
salaries are increasing in the marketplace, internal equity factors or an
employee’s position within the salary range. When the two systems are
directly linked, employees may assume there is a one-to-one relationship
between performance and pay, and not recognize the impact of these other
factors, which may be difficult to communicate. A pay system may be
designed to target an employee’s pay at a certain position within the salary
range that is consistent with the employee’s contribution to the organiza-
tion. For example, employees who consistently meet expectations may have
their pay targeted toward the middle of the salary range, while employees
who consistently exceed standards may have their pay targeted toward the
top. Once employees reach the middle of the range or the market value,
future increases may be limited, or they may be delivered as variable pay in
lump sums.

In general, the design of the performance management system should be
compatible with the pay delivery system philosophy and should support that
philosophy. At the same time, how performance management is linked, or
not linked, to pay will send a strong message to the workforce about organi-
zational priorities and values. The decision as to how performance manage-
ment and compensation will be related should not be made lightly.

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Assignment Two
HRMN 395 Total Rewards

Metrics for Evaluating the Effectiveness

of Total Rewards in an Organization

This Photo by Unknown Author is licensed under CC BY-SA

-NC

https://www.peoplematters.in/article/hr-metrics/rewards-look-your-karma-not-phal-10661

https://creativecommons.org/licenses/by-nc-sa/3.0/

Deliverables for
Assignment Two

Design and share a
PowerPoint presentation that:

Describes and justifies three
metrics that evaluate the
effectiveness of the total
rewards for the organization
used in the first assignment

Provides a “script” in the
notes section articulating the
bullet points as if you are
making a presentation to the
class

This Photo by Unknown Author is licensed under CC BY-ND

http://miguelangelmartin.blogspot.com/2010/02/buenas-practicas-basicas-en-las-redes.html

https://creativecommons.org/licenses/by-nd/3.0/

Metrics are a Core Element of the Total
Rewards Philosophy

Source for definition: UMUC Course Module 1 Commentary

Why measure?

Organizations measure what
matters for the success of their
organization. What gets measured,
gets managed.

With the right measurements in
place, an organization can gauge
the effectiveness of their Total
Rewards programs and make
changes, if necessary.

Metrics answer questions – so the
right questions need to be asked.

Source: UMUC Course Module 5 Commentary

This Photo by Unknown Author is licensed under CC BY-NC-ND

http://completeinnovator.com/tag/metrics/

https://creativecommons.org/licenses/by-nc-nd/3.0/

The Language of Business is Numbers – Numbers that
Communicate Success or Failure of Initiatives

This Photo by Unknown Author is licensed under CC BY-SA

Sales are up by 10% Market share has increased by 20%

Profits have eroded by 3%
Stock price is up by 2 points

Our brand has 50%
name recognition

Customer satisfaction has
Increased by 12 percentage
points

http://commons.wikimedia.org/wiki/file:comunicaci%C3%83%C2%B3n_interna

https://creativecommons.org/licenses/by-sa/3.0/

HR Professionals Must Communicate in the
Language of the Business (Numbers) in Order to be

Credible, Heard, and Understood

Intent to leave due to the
rewards offered is down by
10%

Market comparison of compensation
shows our organization in the
upper 1/4th

Skills training of employees has
resulted in 100% availability of
requisite competencies for
expansion of production

Exit interviews report that 80%
of the employees leaving is due to
rewards offered and 20% is due to
negative culture of the organization

What is a Metric?
• Metrics, also known as measures or key

performance indicators, are tools that assess and
report the impact of a particular project or
activity.

• Both quantitative and qualitative metrics are
typically reported in numbers such as percentages
or indexes.

• Metrics answer questions – such as – is the
organization meeting its goal to offer rewards that
attract, retain, and engage employees?

Source for definition: UMUC Course Module 5 Commentary

This Photo by
Unknown Author
is licensed under
CC BY-SA

Introducción a la Estadística con Excel

https://creativecommons.org/licenses/by-sa/3.0/

Metrics Need to Matter to the Organization
• What Human Resources assesses and

reports to the organization should be
important to the organization or else it is
ignored or marginalizes the work of HR

• CEOs report that Human Resource
professionals do not share metrics that
matter. Instead they report useless ones.

• Recall that these 4 items were presented
in Presentation One

This Photo by Unknown Author is licensed under CC BY-SA

Tourism Metrics That Matter / DMO Benchmarking Project from Troy Thompson

https://creativecommons.org/licenses/by-sa/3.0/

Metrics are key performance
indications of the successful

achievement of goals

Metrics are important key performance
indications for organizational goals; they track
success related to financials, customers, and
business processes and can be used for Total
Rewards

Metrics need to measure the outcome in a
direct, not indirect manner

The direct linkage between rewards and
customer satisfaction, employee satisfaction,
revenue, profits, and productivity are hard to
prove

What are the Right Questions Metrics
Should Ask About Total Rewards?

• Are we offering rewards that attract, retain,
and engage employees?

• Are we offering the right rewards?
• Are our rewards competitive?
• Are we communicating our rewards to the

employees effectively?
• Are our rewards such as training and

promotions preparing the organization for
tomorrow?

• Are our rewards retaining our key essential
employees?

• Do our rewards allow us to distinguish
between the top and lower performers?

• Is the cost of the rewards offered worth the
price?

• Are our rewards helping the organization
achieve it’s major objectives or
organizational capabilities?

Evaluate the Metric – Does it Matter?
Does It Answer the Right Question?

The right metric will directly assess Total
Rewards (monetary, non-monetary, or the
work environment such as training, promoting,
or the work itself)

Total Reward Metric Example 1:

Percentage of employees who intend to leave
the organization because of rewards

Total Reward Metric Example 2:

Percentage of employees in key positions rating
rewards as satisfactory or above

Total Reward Metric Example 3:

Comparison of compensation for key positions
to the competition for same potential
applicants

The right metric will be linked to the
organizational capabilities, requisite
competencies, challenges, or strategic plan

If a core capability is to be mission ready, retention
of employees is critical

Employees must be retained and if the rewards are
not attractive, they may leave

With unemployment low and wages not increasing
significantly over the past 5 years, employees may
leave if they can receive higher compensation
elsewhere

Metrics Answer the General Question: Are our Rewards Effective for
Attracting, Retaining, and Engaging Employees with the Requisite

Competencies our Organization Requires?

This Photo by Unknown Author is licensed under CC BYThis graphic found at https://www.helioshr.com/2015/07/compensation-vs-total-rewards-whats-the-difference-really/

Fake metrics and how to spot them by Jenny Neophytou

https://creativecommons.org/licenses/by/3.0/

Before finalizing your metrics, ask yourself if
each metric …

• Reports on a specific outcome related to total rewards rather than a broader, albeit
important, HR metric such as turnover, retention, time to hire, cost of benefits, or
employee satisfaction?

• Matters for achieving any of the following?
• Organizational capabilities
• Requisite employee competencies
• Challenges of the organization
• Strategic plan for the organization

• Can be calculated (does data exist that can be used for this metric)?

• Is void of incorrect terms such as using the term matrix rather than metric, metric
system rather than metrics, and incorrect grammar such as metrics is or metric are.

Have Questions about Assignment Two or the
Term/Tool of Metrics?

Please place the questions in the Questions Forum

so all will benefit.

This Photo by Unknown Author is licensed under CC BY-NC-ND

https://ebredes.harmoniaban.org/kryon/kryon-tizennegy-kerdes

https://creativecommons.org/licenses/by-nc-nd/3.0/

Assignment Two
HRMN

Total Rewards

Metrics for Evaluating the Effectiveness
of Total Rewards in an Organization

This Photo by Unknown Author is licensed under CC BY-SA-NC

This presentation was created by Joyce Henderson, Ed.D. to clarify assignment

& the
important tool metrics.
Memo to CFOs : Don’t Trust HR A seemingly curious statement from Dr. Richard Beatty,
Professor of Human Resources at Rutgers University to a conference of CFOs in Florida.
Among the controversial views he offers on HR, he cites that many of the metrics HR
professionals report do not show evidence of the correlation between common metrics
such as turnover, employee satisfaction, performance and financial returns. He says for
those employees who make a negative impact, organizations would be better off paying
them NOT to come to work or better still, paying them to work for their competitors.
Another metric such as being an ’employer of choice’ is ‘silly’ and is an invitation to those
who want somewhere ‘to hide out’, rather than those who ‘are excited, excited
and understand how to contribute to what you do.’
HR taking on the ‘St. Bernard role’ by treating most employees the same way and ‘spending
considerable time trying to defend or fix poor performers. He says that the language of
organizations is numbers and that HR isn’t very good at data analytics. Beatty said. “They
don’t think like business people. Many of them entered human resources because they
wanted to help people, which I’m all for, but I’m also for building winning organizations.“ Dr.
Beatty and I are hoping to equip our students to address these concerns. See the full
article here: http://www.cfo.com/human-capital-careers/2009/03/memo-to-cfos-dont-
trust-hr/

Deliverables for
Assignment Two

Design and share a
PowerPoint presentation that:
Describes and justifies three
metrics that evaluate the
effectiveness of the total
rewards for the organization
used in the first assignment
Provides a “script” in the
notes section articulating the
bullet points as if you are
making a presentation to the
class

This Photo by Unknown Author is licensed under CC BY-ND

Assignment two focuses on a crucial action that HR professionals must perform – selecting
and reporting on key metrics for their function which is to ensure the organization has
requisite competencies for organizational success. While the HR team may report several
metrics, in this assignment we focus on metrics that will measure the effectiveness of the
total rewards program.

Metrics are a Core Element of the Total
Rewards Philosophy

Source for definition: UMUC Course Module 1 Commentary

We must evaluate the effectiveness of the total rewards package offered to employees. Total
rewards are one of the major expenses for organizations when we combine compensation,
benefits, training and other costs of the total rewards. The measurement criteria of the metrics
should include two elements which are: 1) do the rewards help the organization attract, hire,
retain, and engage employees and 2) are the rewards aligned to support the goals of the
organization?

Why measure?

Organizations measure what
matters for the success of their
organization. What gets measured,
gets managed.
With the right measurements in
place, an organization can gauge
the effectiveness of their Total
Rewards programs and make
changes, if necessary.
Metrics answer questions – so the
right questions need to be asked.

Source: UMUC Course Module 5 Commentary

This Photo by Unknown Author is licensed under CC BY-NC-ND

As was shared in the notes section of slide 2, we measure the effectiveness through
metrics of the total rewards package offered to employees because total rewards
are one of the major expenses for organizations when we combine compensation,
benefits, training and other costs of the total rewards. The measurement criteria of
the also, if we do not offer an effective total rewards package, we may not be able
to recruit, hire, retain, and engage employees which can mean failure of the
organization. Metrics should include two elements which answer the questions of :
1) do the rewards help the organization attract, hire, retain, and engage employees
and 2) are the rewards aligned to support the goals of the organization?

The Language of Business is Numbers – Numbers that
Communicate Success or Failure of Initiatives

This Photo by Unknown Author is licensed under CC BY-SA

Sales are up by

% Market share has increased by 20%

Profits have eroded by 3%
Stock price is up by 2 points

Our brand has 50%
name recognition

Customer satisfaction has
Increased by

percentage
points

Non-profit organizations, government agencies, and the military also use numbers to
communicate their success or failure. For example, funding, donor participation, clients
served, and name recognition are typically tracked by non-profit organization. And military
readiness, recruits attracted, retention, funding, and more are reported by the military
branches. Government agencies at all levels also report metrics such as their funding,
budgets, key mission or goal accomplishments.

HR Professionals Must Communicate in the
Language of the Business (Numbers) in Order to be

Credible, Heard, and Understood

Intent to leave due to the
rewards offered is down by
10%

Market comparison of compensation
shows our organization in the
upper 1/4th

Skills training of employees has
resulted in 100% availability of
requisite competencies for
expansion of production

Exit interviews report that

0%
of the employees leaving is due to
rewards offered and 20% is due to
negative culture of the organization

One again, we see that metrics for total rewards need to answer the questions of :
1) do the rewards help the organization attract, hire, retain, and engage employees
and 2) are the rewards aligned to support the goals of the organization?

What is a Metric?
• Metrics, also known as measures or key

performance indicators, are tools that assess and
report the impact of a particular project or
activity.

5%.

• Both quantitative and qualitative metrics are
typically reported in numbers such as percentages
or indexes.

• Metrics answer questions – such as – is the
organization meeting its goal to offer rewards that
attract, retain, and engage employees?

Source for definition: UMUC Course Module 5 Commentary

This Photo by
Unknown Author
is licensed under
CC BY-SA

When the term metric is mentioned, for some it seems to be a confusing term. The term
metric is nothing more than another word that means measurement of our actions or
initiatives. Many of us use metrics to track our own personal fitness or health such as our
Body Measurement Index (BMI) is a metric, as is our weight, our blood pressure, our
cholesterol level, our blood glucose level. These are metrics.

Metrics Need to Matter to the Organization
• What Human Resources assesses and

reports to the organization should be
important to the organization or else it is
ignored or marginalizes the work of HR

• CEOs report that Human Resource
professionals do not share metrics that
matter. Instead they report useless ones.

• How do we determine if our metrics are
important? Ask, do they link or align with:

• Organizational capabilities
• Requisite employee competencies
• Challenges of the organization
• Strategic plan for the organization

• Recall that these 4 items were presented
in Presentation One

This Photo by Unknown Author is licensed under CC BY-SA

Some CEOs say that HR reports that others cannot relate to as important
such as turnover, employee satisfaction, costs of benefits. We need to share
metrics that are readily seen as ones that MATTER. They matter if they
answer the questions of : 1) do the rewards help the organization attract,
hire, retain, and engage employees and 2) are the rewards aligned to support
the goals of the organization which can be Organizational capabilities, Requisite
employee competencies, Challenges of the organization, or the Strategic plan for
the organization?

Metrics are key performance
indications of the successful

achievement of goals

Metrics are important key performance
indications for organizational goals; they track
success related to financials, customers, and
business processes and can be used for Total
Rewards
Metrics need to measure the outcome in a
direct, not indirect manner
The direct linkage between rewards and
customer satisfaction, employee satisfaction,
revenue, profits, and productivity are hard to
prove

Sometimes HR teams make the mistake of reporting metrics that are good ones to track
but by themselves, they are not seen as a measurement of total rewards. Turnover, for
example, is important to track but the reason employees are leaving can be related to
something other than rewards. The employees, for example, may merely be reaching the
age for retirement. And, employee satisfaction is good to know – who doesn’t want happy
employees – but is that satisfaction due to the rewards being offer or perhaps something
else?

What are the Right Questions Metrics
Should Ask About Total Rewards?

• Are we offering rewards that attract, retain,
and engage employees?

• Are we offering the right rewards?
• Are our rewards competitive?
• Are we communicating our rewards to the

employees effectively?
• Are our rewards such as training and

promotions preparing the organization for
tomorrow?

• Are our rewards retaining our key essential
employees?

• Do our rewards allow us to distinguish
between the top and lower performers?

• Is the cost of the rewards offered worth the
price?

• Are our rewards helping the organization
achieve it’s major objectives or
organizational capabilities?

Evaluate the Metric – Does it Matter?
Does It Answer the Right Question?

The right metric will directly assess Total
Rewards (monetary, non-monetary, or the
work environment such as training, promoting,
or the work itself)

Total Reward Metric Example 1:
Percentage of employees who intend to leave
the organization because of rewards
Total Reward Metric Example 2:
Percentage of employees in key positions rating
rewards as satisfactory or above
Total Reward Metric Example 3:
Comparison of compensation for key positions
to the competition for same potential
applicants

The right metric will be linked to the
organizational capabilities, requisite
competencies, challenges, or strategic plan

If a core capability is to be mission ready, retention
of employees is critical

Employees must be retained and if the rewards are
not attractive, they may leave

With unemployment low and wages not increasing
significantly over the past 5 years, employees may
leave if they can receive higher compensation
elsewhere

Before you select your metrics for the second assignment, ask yourself, does the metric
directly assess Total Rewards (monetary, non-monetary, or the work environment
such as training, promoting, or the work itself)? Does the metric in some way linked
to the organizational capabilities, requisite competencies, challenges, or strategic
plan?

Metrics Answer the General Question: Are our Rewards Effective for
Attracting, Retaining, and Engaging Employees with the Requisite

Competencies our Organization Requires?

This Photo by Unknown Author is licensed under CC BY

TotalRewards-294×300

This graphic found at https://www.helioshr.com/20

/07/compensation-vs-total-rewards-whats-the-difference-really/

Before finalizing your metrics, ask yourself if
each metric …

• Reports on a specific outcome related to total rewards rather than a broader, albeit
important, HR metric such as turnover, retention, time to hire, cost of benefits, or
employee satisfaction?

• Matters for achieving any of the following?
• Organizational capabilities
• Requisite employee competencies
• Challenges of the organization
• Strategic plan for the organization

• Can be calculated (does data exist that can be used for this metric)?
• Is void of incorrect terms such as using the term matrix rather than metric, metric

system rather than metrics, and incorrect grammar such as metrics is or metric are.

HR professional, as do all managers, when they use incorrect terms.

Have Questions about Assignment Two or the
Term/Tool of Metrics?

Please place the questions in the Questions Forum
so all will benefit.

This Photo by Unknown Author is licensed under CC BY-NC-ND

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HRMN 395-Week 5 Discussion: Possible Pitfalls, Evaluation, & Metrics AND Assignment 2: Report on Metrics

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