A Quantitative Approach to Manage HR Function

Abstract

The HR function in organizations had been playing only a supportive role in achieving the financial goals so far. There had not been much emphasis on the part of HR managers to talk in terms of hard numbers like the core process owners like operations or marketing until recently. The emergence of knowledge economy has placed the emphasis on considering Human Resource as an important investment, going even beyond other forms of capital. People are our greatest asset; this cliché is now becoming reality.  Management has now realized and involved in strategy formulation and implementation it has to transform itself.  It has to speak the languages of numbers that meet the goals.  It has to speak in quantitative and objective terms.  Emergence of a separate form of accounting known as Human Resource Accounting also is a measure of this focus on people. This article attempts to provide a quantitative base for the HR function by coming up with various ratios, which can help the organization in making the HR function more effective and evaluate its contribution in terms of benefits provided and return on investment. It is also imperative that the HR professionals are trained to think like business managers so as to be effective in using these quantitative tools.