This paper examines the development of a human resources dashboard for a hospital setting, arguing that people are a company's most valuable asset and must be actively managed to create organizational value. The paper discusses HR's role as a strategic partner, distinguishes between leading and lagging performance indicators, and explains how these metrics can be structured into a practical dashboard. Focusing on nursing staff as key drivers of patient satisfaction, the paper proposes three core dashboard metrics — job satisfaction and company attitudes, staff performance (retention), and customer satisfaction — each with defined goals and measurement intervals aligned to both short- and long-term organizational objectives.
People are the greatest resource that a company has in its possession. The ability to obtain, retain, and manage human resources has a measurable impact on the company's bottom line. Proper management of human resources can create considerable value for the company. People are an investment, and like any other investment, they must be managed so that their value can be maintained. In order to manage human resources effectively, goals must be established and benchmarking practices must be put in place. The following discussion covers the development of a dashboard to help manage human resources at a local hospital.
Human resources is typically considered an operational activity rather than a strategic one. However, human resources can be a key contributor to corporate strategy and can play a role in bringing other elements of the strategic plan together. People are an essential part of any strategic plan; therefore, the role of human resources in achieving that plan cannot be underestimated.
As a strategic partner, it is necessary to evaluate the effectiveness of human resources in achieving strategic goals (Russell, 2004). Measuring this effectiveness will influence future decision-making. The first step in evaluating human resources effectiveness is to establish a clear connection between how the work of every employee affects corporate strategy (Russell, 2004). According to Russell, the next step is to decide which measures are critical to the company's bottom line. This list should not include too many items — it should be restricted to the top two or three deemed most important. The third key to establishing the importance of human resources to corporate strategy is to provide a means of documenting the effects of HR on company performance in a way that everyone in the organization can understand.
These three measures of HR effectiveness are critical to successful corporate strategy. However, putting them into action can be a difficult task. The third component is the most critical, as it represents a concrete deliverable that helps others understand the factors that will enable human resources to play a key role in the success of corporate strategy.
The first task in building useful HR metrics is to decide which indicators are essential to measuring the desired outcomes of the human resources strategy. One of the key difficulties in measuring the effects of any strategic change is that results are rarely immediate. One often does not see the outcomes of their actions until some point in the future. This "lag" in results can present difficulties in developing accurate metrics (Russell, 2004).
Lagging indicators provide the results of past actions. These types of indicators can tell the company what has happened as a result of its decisions, but they do not provide a clear picture of what is happening in the present. Lagging indicators are useful in establishing cause and effect — they help the company understand what it can expect from its actions in the future and serve as a means for learning from both successes and failures. Therefore, lagging indicators do have a place in the establishment of performance metrics for human resources.
Lagging indicators tell the analyst whether the actions taken produced the desired results. These indicators differ from "leading" indicators, which represent in-process measures. Leading indicators are taken at certain intervals during the course of an action; they represent small steps on the way to lagging outcomes. They reflect what is happening now, with less time elapsed between action and result. They provide immediate feedback and allow analysts to make adjustments on the fly if their actions do not appear to be producing the desired end result. They play an important role in deciding whether a given course of action is correct. Leading indicators have an indirect effect on the company's bottom line (Russell, 2004).
Both leading and lagging indicators are important in helping the company achieve its overall strategic goals. The focus tends to be on leading indicators because they can provide immediate results, but lagging indicators must not be neglected. An effective measurement tool should include a balance of both. Deciding which indicators are most important to company performance depends largely on the specific organization and the sector in which it operates.
Some examples of leading indicators include reductions or increases in absenteeism in key positions, the percentage of employees expressing interest in open promotional opportunities, and changes in the number of positive comments from customers (Russell, 2004). Leading indicators can be measured at frequent intervals — weekly, monthly, or quarterly — providing an immediate snapshot of the human resources strategy. Lagging indicators include employee retention, employee performance, organizational performance, customer retention, and employee productivity (Russell, 2004). Lagging indicators are typically measured over longer periods such as annually or every two years. They represent longer-term goals and may be used to envision medium- and long-range results, such as where the company wishes to be in the next five years.
Leading indicators show what happens along the road to lagging outcomes. Both types of indicators are meaningless without established goals. Much like driving a car, one cannot know whether one has arrived without knowing the final destination. In order to determine whether the human resources department has reached its goals, certain benchmarks must be established for each chosen indicator. These benchmarks can be assembled in the fashion that a driver uses a dashboard to monitor speed, fuel consumption, and miles traveled. The establishment of a dashboard containing key human resources metrics is therefore an important tool for achieving established goals and improving the company's bottom line.
The first step in developing a useful dashboard is to define the overall business strategy the dashboard is intended to support. This provides a definitive endpoint that can be measured. For healthcare providers such as the hospital used here, patient outcomes and satisfaction must be the primary goal-oriented concern. The patient and the ability to provide quality care should be the central focus of the human resources strategy. People are essential to delivering that care.
The next step is to decide which components of the human resources architecture support the delivery of established outcomes (Russell, 2004). In a hospital, several levels of employees exist. The first level has the highest degree of patient contact and includes doctors, nurses, volunteers, and those who administer tests such as phlebotomists and X-ray technicians. The second level includes employees without direct patient contact who are nonetheless essential to the ability of first-tier staff to provide quality care — food preparation staff, laundry staff, pharmacists, and laboratory personnel, as well as maintenance staff, schedulers, billing staff, and those involved with patient accounts. The third tier is involved in the daily operation of the facility but not in individual patient care; these individuals see the bigger picture and include administrators, department managers, accountants, and others focused at a macro level.
If the overall goal of the organization — and therefore the human resources department — is to improve patient outcomes, then this goal must drive the development of the dashboard. Just as in any organization, the customer is the lifeblood of the enterprise. In this case, the patient represents the customer, and it is their outcomes and impressions that will determine the future of the organization. Understanding this factor is the most important element in establishing metrics.
The next step in developing the dashboard is to decide where to focus the greatest amount of effort. Strategic development often faces challenges such as budget constraints, personnel shortages, time constraints, and policy constraints. These limitations mean the human resources department must choose where to direct its focus. In the case of the hospital, the greatest effort should be placed where it will have the greatest impact on patient satisfaction and positive outcomes. Those with the highest degree of direct patient contact are best positioned to leverage positive or negative change in patient experience. Therefore, this group of employees will serve as the primary focus in developing the dashboard.
"Nursing staff as primary drivers of patient value"
"Three dashboard metrics with defined numeric goals"
These three measures will provide the basis for achieving company goals and driving human resource value. The measures are individually complex, but they are consolidated into three straightforward metrics that administration can use to make needed changes quickly. Achievement of short-term goals is an essential element in securing the long-term growth and stability of the organization. These metrics will provide the foundation for continued improvement and growth at this hospital.
You’re 55% through this paper. Sign up to read the remaining 2 sections.
Sign Up Now — Instant Access Already a member? Log inAlways verify citation format against your institution’s current style guide requirements.