Suggested Metrics for Compensation and HR

Compensation Administration
by Stephen Bruce, PhD, PHR
"Yesterday’s Advisor discussed metrics for compensation and HR; today, suggested metrics for different functions. Again, our insights come from the all-compensation-in-one website, Compensation.BLR.com."

Metrics for Compensation Programs

  • Compensation costs per dollar of profit
  • Compensation costs per dollar of revenue
  • Analysis of performance and production levels of employees paid in the top 30 percent of their salary range
  • Total compensation costs as a percent of total company operating costs
  • Analysis of compensation levels to the marketplace and key competitors
  • Forecast of compensation needs based on future plans
  • Compensation mix, meaning fixed salaries versus performance-driven compensation

Metrics for the Recruiting Function

  • Time to fill a vacancy
  • Quantity and quality of applications based on recruiting source
  • HR cost per hire
  • Voluntary/involuntary turnover rate of new hires during first year of employment
  • Quality and retention rates of new hires by recruiting source
  • Diversity ratios of new hires

Metrics for the Employee Relations Function

  • Number of complaints filed by employees
  • Percent of complaints that proceed to a state agency, court, or other external dispute resolution
  • Amount of time taken to resolve an internal complaint
  • Percent of cases resolved with no money paid out by the company
  • Percent of cases in which large financial settlements or awards were made
  • Percent of cases in which documentation was inadequate
  • Dollars spent on attorney’s fees

Compensation.BLR.com, now thoroughly revamped with easier navigation and more complete compensation information, will tell you what’s being paid right in your state—or even metropolitan area—for hundreds of jobs. Try it at no cost and get a complimentary special report. Read more.


Metrics for Training Programs

Training is another area that can be difficult to quantify. However, it may be helpful to look at metrics that target the type of training and what it was intended to accomplish. For instance:

  • Cost of sales training as a percent of total sales
  • Increase in hours of sales training compared with increases in sales
  • Changes in performance levels of employees who received training
  • Percentage of employees who cite lack of training or advancement as a reason for leaving

Practical Tips for Using HR Metrics

Metrics should:

  • Give the whole picture, including quantity, quality, time, cost, and effectiveness.
  • Focus on key areas where change is necessary.
  • Develop a benchmark to use for evaluating progress toward goals.
  • Set goals and establish metrics for measuring progress.
  • If possible, be compared to metrics with similar measures from key competitors.
  • Use the language of the business leaders, including ratios and measurements they know.

Finally, don’t be afraid of data or of measuring results. Metrics can add to your professional credibility and garner support for your programs

Metrics, an important tool, but one more thing to add to the list of compensation challenges. “Maintain internal equity and external competitiveness and control turnover, but still meet management’s demands for lowered costs.” Heard that one before?  Many of the professionals we serve find helpful answers to all their compensation questions at Compensation.BLR.com, BLR’s comprehensive compensation website.

And there’s great news: The site has just been revamped in two important ways. First, compliance focus information has been updated to include the latest on COBRA, Lilly Ledbetter, and FMLA. Second, user features are enhanced to make the site even quicker to respond to your particular needs:

  • Topics Navigator—Lets you drill down by topical areas to get to the right data fast.
  • Customizable Homepage—Can be configured to display whatever content you want to see most often.
  • Menu Navigation—Displays all of the main content areas and tools that you need in a simple, easy format.
  • Quick Links—Enables you to quickly navigate to all the new and updated content areas.

The services provided by this unique tool include:

  • Localized Salary Finder. Based on reliable research among thousands of employers, here are pay scales (including 25th, 50th, 75th, and 90th percentiles) for hundreds of commonly held jobs, from line worker to president of the company. The data are customized for your state and metro area, your industry, and your company size, so you can base your salaries on what’s offered in your specific market, not nationally.

Try BLR’s all-in-one compensation website, Compensation.BLR.com, and get a complimentary special report, Top 100 FLSA Overtime Q&As, no matter what you decide. Find out more.


  • State and Federal Wage-Hour and Other Legal Advice. Plain-English explanations of wage-hour and other compensation and benefits-related law at both federal and state levels. “State” means the laws of your state because the site is customized to your use. (Other states can be added at a modest extra charge.)
  • Job Descriptions. The website provides them by the hundreds, already written, legally reviewed, and compliant with the Americans with Disabilities Act (ADA) mandate that essential job functions be separated from those less critical. All descriptions carry employment grade levels to current norms—another huge time-saver.
  • Merit Increase, Salary, and Benefits Surveys. The service includes the results of three surveys a year. Results for exempt and nonexempt employees are reported separately.
  • Daily Updates. Comp and benefits news updated daily (as is the whole site).
  • "Ask the Experts" Service. E-mail a question to our editors and get a personalized response within 3 business days.

If we sound as if we’re excited about the program, it’s because we are. For about $3 a working day, the help it offers to those with compensation responsibilities is enormous.

This one’s definitely worth a look, which you can get by clicking the links below.

Click here to get more information or start a no-cost trial and get a complimentary special report!

SHARE THIS ARTICLE

1 Comment

Share Your Comments on This Tip

If you have comments about this tip and want to post them on this page to share your thoughts with other Compensation Daily Advisor readers, simply enter your comments below. NOTE: Your name will appear on any comments posted.

Your email address will not be published. Required fields are marked *

  1. Barb        
    October 17, 2012 11:34 am

    Thanks–these are very useful! Of course, you can get TOO wrapped up in metrics, too, and not see the forest for the trees. I think you also need some “qualitative metrics” to round out the quantitative metrics. Sometimes numbers can present a picture that doesn’t necessarily reflect what’s happening on the ground (sorry for the mixed metaphors!).