The use of HR Key Performance Indicators in rental companies
Key Performance Indicators (KPIs) are quantifiable values which are used within organisations to determine how effectively key business objectives are being achieved. This report looks at the different KPIs used by HR departments of European Rental Association (ERA) members during each phase of the employee life cycle, and how this data can be contextualised so that it is useful and actionable for companies to work with. Professor Patrick Müller, an expert on People Analytics (PA), also provides his perspective on their use, and how HR KPIs and PA could be used to improve the outcomes of HR departments in the rental sector.
There are three main stages of the employee life cycle for which specific KPIs are relevant:
- Regular employment.
There are some KPIs which are relevant during all phases of the employee life cycle, such as those related to health and safety, and overall employee turnover. These are almost invariably closely monitored by ERA members. Ideally, organisations need to be tracking KPIs across several different domains (i.e. operational KPIs, performance KPIs) on both an individual and department basis in order to have a solid perception of where they are at, which can in time direct them towards where they want to be.
Professor Müller goes on to explain that while using HR KPIs is a good way to create value for companies as a whole, it is only a first step in a much broader endeavour to empower companies to use data-driven methods in HR. Such methods can broadly be defined as People Analytics (PA), which can range from simple correlative analysis and benchmarking, to predictive analytics and model-based simulation. The current lack of appropriate IT solutions and analytical competencies in many companies has resulted in a relatively low adoption rate of PA. For members of the ERA, this creates the opportunity for a competitive advantage compared to other companies and industries. The positive experiences of successful implementers of PA should strongly encourage companies in the rental industry to implement PA solutions.
Questions answered in this report
- What are the benefits and drawbacks of using KPIs over qualitative data?
- Which KPIs should be the focus of each phase of the employee lifecycle?
- What compensation models are used to motivate employees to reach their KPI targets?
- What criticisms are there of such a KPI-driven workplace?
- Which KPIs are used by the HR department of one of Europe’s largest rental companies?
- How does PA go further than KPIs, and do they add enough value to justify the effort?
- Why does PA currently have such a low adoption rate?
- How should PA be implemented and which traps should be avoided?