Study G Quiz 2.docx

Finance professionals take this historical

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data about what’s happening with the organization. Finance professionals take this historical information and use it to make important business decisions. If a company doesn’t have good, consistent, and reliable accounting that they can rely on, then they are not going to have good and solid financial analysis. All in all, the foundation of any good system that leads to organizational success is a solid historical accounting system, which relies on the integrity and competency of the accountants entering the numbers. Joe Knight also pointed out about “physic leadership” which coveys the idea of when a company shows employees the organization’s financials, they take on a leadership role to figure out what they can do to improve the numbers for the business which is another tool for motivation and employee engagement. 4) What are HR metrics? Strategic HR metrics? HR metrics are an essential way to quantify the cost and impact of human capital programs and human resources procedures. The main reason for organizational profitability is an effective management of human capital. For this reason, HR professionals developed appropriate HR metrics to specifically illustrate the value of HR practices and activities, mainly in relation to accounting profits and market valuation of the organization. HR Metris are also used to measure the success and/or failure of HR initiatives. In the Exhibit 1.4 of the course textbook, Mello recognized a number of common metrics used for measuring performance and value of human capital: absence rate, cost per hire, health care costs per employee, Time to fill, turnover costs and etc. There are no “perfect” metrics, however, the appropriate HR metric would depend on the organization and/or business unit’s strategy. For instance, an organization that is aggressively focused on an organizational innovation might closely monitor training cost per employee. On the contrary, many organizations realize that human resources can be strategically managed from an investment perspective. According to the course documents and PPT’S, 90% of Fortune 500 companies evaluate HR operations on the basis of employee retention and turnover, corporate morale and employee satisfaction, which do not necessarily illustrate HR as key impact toward profits and shareholder value. Strategic HR metrics go beyond the HR numbers to express how measure can impact bottom line and solve organization problems by combining metrics and business data. These metrics can also be compared to industry benchmarks. Mercer constructed a model that assisted organizations with strategically measure HR Impact. The model outlines that HR should: identify problem HR can impact, calculate actual cost of the problem, choose HR solution that addresses problem, calculate cost of solution, calculate value of improvement 6 to 24 months after implementation and calculate specific return on investment (ROI in human capital often not realized until some time in the future).
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  • Spring '15
  • Dr.RavenDavenport

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