Evaluating HR Function Contribution

This assignment delves into evaluating the Human Resources (HR) function's contribution to an organization. It discusses various methods for measuring HR efficiency, effectiveness, and impact, as well as implementing risk management strategies to improve workplace safety. The assignment requires students to reflect on their own HR function's contribution, consider tools for measurement, and suggest improvements.

Unit 5 Week 6
This week we will be reviewing different ways the HR function
can be evaluated and how this links to the overall performance
of the business.
By the end of the week you will be able to:
 Describe a range of inputs to HR evaluation
 Describe a range of tools for measuring HR
 Outline a number of risk areas and describe the HR role in
relation to these risks.
Let’s start by looking at how you currently measure HR.
How do you measure HR contribution?
Historically, the HR function was mainly an admin-based
function but, these days, HR in many organisations has moved
away from transactional activities. The opportunity it has to
contribute to organisational performance has changed and so
has the method of measuring its contribution.
Contribution of the HR Function
All HR functions are trying to add value to their organisations
and clear systems and procedures for evaluation must be in
place to measure efficiency and effectiveness.
Evaluation & Human Resources
Patton, (1987) describes evaluation as “a process that critically
examines a program. It involves collecting and analysing

information about a program’s activities, characteristics, and
outcomes. Its purpose is to make judgments about a program,
to improve its effectiveness, and/or to inform programming
decisions”.
This definition provides us with an understanding of the
fundamentals of how we measure and evaluate.
Many HR measures are activity based rather than performance
based. Even when the measures used are performance based,
it is difficult to show that the outcome results from something
that HR has done, rather than something that has occurred
through another function or from changes in the environment
or the competitive situation.
A challenge is that many outputs and outcomes of HR can be
hard to measure as they are intangible and not readily
measured. However, it remains of vital importance that we do
measure the HR contribution.
In the discussion thread below, share some ways in which your
own organisation, or an organisation you are familiar with,
measures its HR contribution.
Measuring HR's contribution
1. Efficiency and effectiveness
Like any key organisational function, it’s important for HR to
demonstrate its ability as a value-adding function. It is
therefore critical that the right evaluation methodologies are
adopted. Selecting appropriate measures and metrics from
which organisational insights can be drawn happens once you
have identified the strategic drivers for your organisation. You
are then better placed to consider how best to undertake
measurement, assessment and evaluation in these key areas to
optimise HR decisions and practices. Of course, it’s worth
noting that measurement is also important because it shows
you are focusing attention in the correct places. The HR
function should do this for its own benefit, not just to justify its
ability to add value.

When measuring HR’s contribution, three different types of
measures are important and these are illustrated below.
 Measures of HR efficiency – to what extent is the HR
function ‘doing things right’? Efficiency measures are
concerned with the extent to which HR processes are
undertaken in a way that minimises the use of resources.
Many organisations engage in HR benchmarking activities,
evaluating HR processes through a comparison with
external standards of good practice or excellence. This
practice is most valuable when it is part of a continuous
process to challenge and improve HR processes.
 Measures of HR effectiveness – to what extent is the
HR function ‘doing the right things’? Effectiveness
measures focus on the extent to which organisational
objectives are achieved and specific problems are solved
through the contribution that the HR function makes to
the organisation. They also typically include measures of
the strategic skills and core competencies in the
workforce.
 Measures of HR impact – to what extent have HR
activities met defined priority needs for the organisation in
its specific and strategic context? Impact measures show
the results of bundles of activities on the achievement of
strategic priorities, through being closely aligned both
‘vertically’ with strategic priorities and ‘horizontally’ with
the work of other parts of the organisational system.

The matrix below further illustrates the differences between
efficiency and effectiveness.
Effective Ineffective
Effici
ent Organisation succeeds
at minimum costs
Organisation controls costs,
but does not succeed
Ineffi
cient Organisation
succeeds, but at high
costs
Organisation fails
Action point
Write down three areas of HR practice where efficiency could
be measured. Identify the measures that may be used to
effectively evaluate them and consider how this may be used to
help improve HR effectiveness.
On the next page, we’ll look at some examples of measures of
efficiency and effectiveness.
2. Examples of measures of efficiency and
effectiveness
 Sales (revenue)
 Net profits
 Costs
 Return on investment
 Market/shareholder value.
3. Examples of HR Practice Measures
The table below shows examples of the type of information that
the HR function will obtain to map future success.

Action point
The recruitment row has been completed but the training and
development, performance systems and health and safety
measures have not. Spend a few minutes noting down some
ideas for those areas then move on to the next page to see
some possible answers.
HR Activity Possible Measure
Recruitment
 Number of recruiting advertising
programmes
 Acceptance per offer ratio
 Number of applicants contacted compared
with those reporting for job interviews
 Time to fill a job
 Cost of filling a job
 Average tenure of employees (divided by
low and high performers)
 Percentage of internally-filled jobs
 Percentage of jobs filled with candidates on
succession plan
 Performance of hired applicants (e.g.
performance of candidates from different
schools, types of experience, etc.)
 Percentage of global units which are
staffed locally
 Ratio of back-up talent (number of
prepared back-ups in place for top‘X’jobs)
 Performance of those hired with different
techniques.
Training and
Developmen
t

Performanc
e Systems
Health and
Safety
4. Possible measures answers
Here’s the completed table with some possible measures. Did
you mention any of these?
HR Activity Possible Measure
Recruitment
 Number of recruiting advertising
programmes
 Acceptance per offer ratio
 Number of applicants contacted compared
with those reporting for job interviews
 Time to fill a job
 Cost of filling a job
 Average tenure of employees (divided by
low and high performers)
 Percentage of internally-filled jobs
 Percentage of jobs filled with candidates on
succession plan
 Performance of hired applicants (e.g.
performance of candidates from different
schools, types of experience, etc.)
 Percentage of global units which are
staffed locally
 Ratio of back-up talent (number of
prepared back-ups in place for top ‘X’ jobs)
 Performance of those hired with different
techniques.

Training and
Developmen
t
 Number of training days and programmes
held per year
 Cost per trainee hour
 Percentage of employees involved in
training
 Number of courses taught by subject
 Percentage of employees with
development plans
 Number of courses taught by subject
 Percentage of payroll spent on training
 Payroll expense per employee
 Comparison: those who did and did not
attend training
 Ratio of advanced to remedial education
 Time for new programme design
 Percentage of new material in programmes
each year
 Efficiency of training registration
 Evaluation of programme
 Percentage of employees applying training
on the job
 Percentage of managers reporting positive
impact of training on employee
performance
Performanc
e Systems
 Acceptance of appraisal processes by
employees
 Effectiveness of appraisal process for
dealing with poor performers
 Percentage of employees receiving
performance appraisal

 Percentage of total salary at risk
 Speed of salary action processing
 Average merit increase granted by
classification
 Ratio of salary to competitor salary
 Extent to which measurement systems are
seen as credible
 Percentage of employees reporting
effective performance conversations with
manager
 Percentage of employees that rate the
performance management system as fair
 Percentage of employees that understand
the link between performance and how
they get paid.
Health and
Safety
 Lost work days due to health
 Cost of injuries
 Incidence of injuries
 Percentage of smokers
 Percentage of employees who are involved
in wellness programmes
 Trends in workforce illness
 Percentage of employees that are aware of
wellness programmes
 Percentage of employees comfortable
using the organisation’s health and safety
programmes.
5. Evaluating measurements
Benefits of evaluation of measurements

It is important to understand the benefits of evaluating
measurements. Can you think of any other benefits to add to
the list below?
 Determine future investments in HR
 Improve HR processes
 Identify alignment of HR with business strategies
 Build intellectual capital within the organisation
 Stop doing what isn’t effective
 Be accountable to stakeholders and ensure employee and
management accountability
 Reflect on and improve the overall climate and health of
the organisation
 Avoid fads – HR seems particularly vulnerable to fads and
evaluation can be a way of determining whether a new
intervention is truly a quality improvement
 Lead the organisation in keeping employees motivated
and productive
 Improve HR’s image within the organisation by showing
how much it contributes to organisational success.
Linking HR with strategic objectives
The CIPD states that HR business partnering is the process by
which HR professionals work closely with business leaders
and/or line managers to achieve shared organisational
objectives. Business partners are senior or key HR
professionals.
HRBPs are usually embedded in the business unit where they
work in partnership with operational managers within that
business unit to influence and steer strategy and strategy
implementation. Research has found that the role of business
partners varies widely between organisations, with factors such
as ‘organisational size, company culture and business
priorities’.
Leading HR with goals and purpose

It is important to remember that there are many measures in
HR and to focus on the overall business objective and mission.
This will be achieved through ongoing review and evaluation of
the various people management and business activities.
Tools for measuring HR
1. Overview
HR metrics are used by businesses to determine the value and
effectiveness of HR strategies which link with measurement,
assessment and evaluation. Understanding what is happening
in the business will provide information about the strengths and
weaknesses within the organisation. Using HR metrics allows
the business to focus on what needs to be improved and
developed.
This session will describe various tools for measuring HR data
and information.
Action point
Before we start, think about the following questions:
 Can you explain why you provide the metric and what it is
for?
 Who would use it?
Typically, HR would measure the following areas:
 Numbers, grades and occupations of employees
 Absenteeism, staff turnover and lateness
 Accident rates
 Age and length of service
 Wages rates and salary levels
 Overtime statistics
 Training and development records
 Records of grievance and discipline

 Performance appraisals and skills audit.
By obtaining this information you will be able to reduce costs
and maximise your employees’ output.
The CIPD (2016) states that a critical first step is to ensure that
HR is measuring the right things. The design and development
of relevant HR metrics requires reflection and discussion in
order to determine what it takes for the organisation to
succeed and to understand how HR can add value.
Three issues underpin effective measurement:
 Aligning measurement with goals
 Taking a business partner perspective
 Adding value by focusing on building capability.
2. The HR function and its measurement
capability
Developing and using HR metrics for maximum impact is
complex. It requires judgement and a range of analytical and
influencing skills to draw out and effectively communicate
insight from data. Some HR practitioners are happiest when
‘working with people’ and less at ease when ‘working with
numbers’. Others find the quantitative aspects of HR work very
meaningful but are less confident with the influencing and
communicating aspects of their role. There may also be a
tendency to ‘look inwards’ at what matters most to
practitioners in the HR function and to provide managers with
information from an HR perspective, rather than considering
how to communicate information about issues in a way that is
relevant to the rest of the organisation.
A range of skills and capabilities is required for the effective
use of measures, assessment and evaluation.

The ability to understand the language of the business – the
ability to communicate effectively with line management
colleagues in their own terms provides the basis for influence
and insight.
Relationship management skills – the ability to look beyond the
HR function and develop positive relationships with all parts of
the business. Understanding the language of the business and
the priorities of different functional areas will help to develop
this capability.
Information-gathering skills to identify key strategic drivers –
sometimes impact areas are explicitly communicated through
organisational strategy documents or discussions but they may
be implicit.
In many organisations, ‘strategy in practice’, expressed through
dialogue and informal channels, is more relevant than ‘strategy
in writing’, expressed through formal documents and policies.

Functional agility – organisational strategy is rarely static and
so strategic impact points will change as a result of
environmental, systemic and opportunistic factors. People need
to be change-ready, with an eye on the horizon to anticipate
opportunities and challenges, and able to adapt and flex as
necessary.
Confidence with quantitative and qualitative assessments –
both ‘hard’ and ‘soft’ information is relevant to HR work, and
skills and confidence in both areas is needed to ensure that HR
work is responsive to the expectations of top managers and
that managers have the information they need.
However, as we implied a moment ago in relation to HR’s
‘comfort’ with figures, evidence suggests there is significant
room for improvement when it comes to HR’s own capability to
measure and use metrics.
We will now look at a range of tools that will review some of the
methods used to help evaluate the HR function’s contribution.
3. Benchmarking

When reviewing information, benchmarking becomes an
important tool for the business as it compares key operational
metrics with those of other, similar companies. Also,
benchmarking can be mapped with CIPD survey data. This can
help with tracking and reviewing recruitment and training
costs, pay and benefits, absence costs and labour turnover, and
can then be compared to the national average and to
organisations of a similar size and operating in the same
sector.
The CIPD (2016) states that benchmarking is the process of
comparing one’s business processes and performance metrics
to industry standards or best practices from other industries.
Dimensions typically measured are quality, time and cost. In
the process of benchmarking, managers identify the best firms
in their industry, or in another industry where similar processes
exist, and compare the results and processes of those studied
(the ‘targets’) with their own results and processes. In this way,
they learn how well the targets perform and, more importantly,
the business processes that explain why these firms are
successful.

We will now review the main types of benchmarking used in
industry.
Internal benchmarking
In large organisations, which operate in different geographic
locations or manage many products and services, the same
functions and processes are usually performed by different
teams, business units or divisions. This often results in
processes being performed very well in one division but poorly
in another. Internal benchmarking is used to compare the work
of separate teams, units or divisions to identify the ones that
are working better and share the knowledge with other teams
in the company to achieve higher performance. It is usually
employed by the companies that have recently expanded
geographically, but haven’t yet created proper knowledge-
sharing systems between divisions. If such systems are in
place, there’s no need to use internal benchmarking to look for
best practices.
External or competitive benchmarking
These terms are sometimes used interchangeably but in fact
there are some differences.
Competitive benchmarking is when an organisation
compares itself with competitors that are in the same sector.
External benchmarking looks both inside and outside the
relevant industry to find the best practices. Therefore, external
benchmarking is likely to include competitive benchmarking.
Competitive benchmarking will only be used with performance
benchmarking to compare the business products and services.
Strategic or process benchmarking won’t be realistic options as
it will be difficult to find competitors willing to share sensitive
information with you.
Functional benchmarking
Managers of functional departments find it useful to analyse
how well their functional area performs compared to functional
areas of other companies. It is quite easy to identify the best
marketing, finance and human resource or operations

departments in other companies that excel in what they do and
to apply their practices to your own functional area. This way
the companies can look at a wide range of organisations, even
unrelated ones, and instead of improving separate processes,
they can improve the whole functional areas.
4. Surveys and questionnaires
Another way to measure HR metrics is by using surveys or
questionnaires. A good example of this is an employee
satisfaction survey. This will provide management with the
knowledge and tools to build positive employee relations and a
positive work environment. Employee attitudes, burnout
tendencies, passion factors, loyalty, workplace climate and
competitive intelligence are key indicators for employee
retention, satisfaction and productivity.
Do bear in mind, though, the possibility of ‘survey fatigue’.
Employee surveys have become very popular so only ask them
to complete one when you really need the data.
Surveys can be used in different ways, for example, to:

 Diagnose workplace problems
 Monitor the effectiveness of management policies
 Assess employee responses to specific programmes or
initiatives
 Reassure employees that their views are being taken into
account
 Establish baseline data for benchmarking, both internally
and against other organisations
 Feed into appraising line managers’ performance.
Effective businesses focus on creating and reinforcing employee
satisfaction to get the most out of their human capital. Well-
constructed employee satisfaction surveys provide the insights
that are foundational to creating and reinforcing pleasurable
working environments.
Surveys don’t have to be an annual event and some emergent
practice in this area involves surveys being used more often.
For example, Amazon carries out a daily mood survey.
As soon as HR starts working with potential data, it is important
to think how you would analyse it and represent it to the client,
and how adequate it will be in terms of answering the question
you are asking. Thinking about the end result may ensure that
you collect enough data.
5. The balanced scorecard

As mentioned in Taylor & Woodham’s (2012) work, the
balanced scorecard is a strategic planning and management
system that is used extensively in business and industry,
government and not-for-profit organisations worldwide to align
business activities to the vision and strategy of the
organisation, improve internal and external communications,
and monitor organisation performance against strategic goals.
It was originated by Kaplan and Norton (1996) as a
performance measurement framework that added strategic
non-financial performance measures to traditional financial
metrics to give managers and executives a more ‘balanced’
view of organisational performance.
While the phrase ‘balanced scorecard’ was coined in the early
1990s, the roots of this type of approach are deep and include
the pioneering work of General Electric on performance
measurement reporting in the 1950s and the work of French
process engineers (who created the Tableau de Bord – literally,
a ‘dashboard’ of performance measures) in the early part of the
20th Century.
The four dimensions of the original Kaplan and Norton (1996)
balanced scorecard are:

1. Financial – performance against financial objectives can be
central to the success or failure of a business.
2. Customer – an external perspective in terms of the
customer is vital as this is the source of revenue delivery.
Recent management philosophy has shown an increasing
realisation of the importance of customer focus and
customer satisfaction in any business. These are leading
indicators ‒ if customers are not satisfied, they will
eventually find other suppliers that will meet their needs.
Poor performance from this perspective is thus a leading
indicator of future decline, even though the current
financial picture may look good.
3. Internal business process – this perspective refers to
internal business processes. Metrics based on this
perspective allow the managers to know how well their
business is running and whether its products and services
conform to customer requirements (the mission).
4. Learning and growth – the final information stream
focuses on organisational learning and growth within a
business. Metrics can be put into place to guide managers
in focusing training funds where they can help the most. In
any case, learning and growth constitute the essential
foundation for success of any knowledge-worker
organisation. Examples of information in this category are:
 Employee satisfaction
 Information system availability
 Employee capability
 Employee productivity
 Employee retention
 Current and required skill base
 Motivation
 Alignment
 Empowerment.

6. Dashboards
Dashboards are a method of measuring and tracking
information in a systematic way. The dashboard will display
expectations visually as a way of measuring criteria. This
process allows senior management and leadership teams to
develop and align the HR strategy to the strategies of other
departments. The key is to integrate personal objectives and
management ‒ this will improve the area of accountability to
the communities of the organisation.
How to develop a successful dashboard
Phillips et al (2014) list ten essential criteria for a successful
process (p. 29).
You will need to assess the capacity of your organisation to
meet these criteria:

1. Keep it simple.
2. Keep it economically viable.
3. Use credible methodology and techniques.
4. Base it on theoretically sound principles.
5. Account for other factors that influence variables.
6. Be flexible.
7. The process must be applicable with all types of data.
8. Include the costs of the solution.
9. Use an acceptable ROI5 formula.
10. The process used must have a successful track
record, based on a model you can actually apply.
Dashboards are often linked to databases which filter into key
reports and are constantly updated. Using a dashboard has a
range of benefits which include the visual presentation of
measures, the ability to see positive and negative trends and
the ability to link in with collected business intelligence, align
with business goals and save time on multiple reporting.
There are many types of dashboards available and these can
be broken down, according to the role, into either strategic,
analytical, operational, or informational.
Here are some details of each type.
Strategi
c
Support managers at any level in an organisation
and provide the quick overview that decision
makers need to monitor the health and
opportunities of the business. Dashboards of this
type focus on high-level measures of performance,
and forecasts.
Analytic
al
The purpose of analytical dashboards is often to
include more context, comparisons and history,
along with subtler performance evaluators.
Analytical dashboards typically support
interactions with the data, such as drilling down

into the underlying details.
Operati
onal
Monitoring operations are often designed
differently from those that support strategic
decision making or data analysis and often require
monitoring of activities and events that are
constantly changing and might require attention
and response at a moment's notice.
Informa
tional
Informational dashboards are based on key
information around the overall business
performance. This would link in with the other
types of dashboards.
7. Key Performance Indicators (KPIs)
Also known as key success indicators (KSIs), key performance
indicators help businesses and employees define and achieve
their goals. KPIs are a form of performance measurement and
are commonly used at both an operational level (to guide the
business towards pre-determined goals) and at the staff

appraisal level (to help employees stretch themselves and have
an end goal in sight).
An effective KPI/KSI should:
 Provide an objective to see if the strategy is working
 Offer a comparison to gauge the degree of performance
change over time
 Focus employees’ attention on what matters most to
success
 Provide a clear focus with common language for
communication and links with Business Intelligence (BI) to
gauge business trends and advise tactical courses of
actions.
Ultimately, their main role is help the organisation assess
progress towards declared goals. As such, KPIs are used across
the business. Some examples of where they are most likely to
be used are:
 Turnover of employees
 Customer services
 Customer satisfaction
 Performance management.
8. Service Level Agreements (SLA)

Service level agreements normally form part of any operational
HR department. They ensure that employers are operating
responsibly and in a sustainable, accountable and transparent
way. The shared service is typically measured through the use
of service level agreements (SLAs), particularly when the
service is outsourced to a third party. These SLAs are defined
with agreed measures that are reported on regularly to ensure
that the quality of service remains at the level required. These
are often embedded into a contract and penalties can be
applied if the SLAs are not met over a period of time.
Service levels can be defined at different levels.
A customer-based SLA is an agreement with an individual
customer group, covering all the services they use.
A service-based SLA is an agreement for all the customers
using the services.
A multi-level SLA is split into three levels addressing a
different set of customers for the same services in the same
SLA:

 Corporate Level SLA – This will cover generic service level
management. This will link in with all issues from every
customer in the business
 Customer Level SLA – covering service level management
relevant to a particular group
 Service Level SLA – Covering all service level management
issues relevant to the specific services.
Measures of impact are most relevant to senior decision
makers. Impact measures focus on the value and worth of HR
interventions – the extent to which they meet defined priority
needs for your organisation in its specific and strategic context.
They focus on ‘what matters’ to key stakeholders and must be
meaningful, aligned and compatible with other organisational
and external measures. Where possible, they should have the
capacity for longitudinal tracking and reflect activities that are
within organisational control and can inform future actions and
contribution.
Risk management and assessment
1. Risk management
One area where HR can contribute to organisational
performance is risk management and assessment.
Good corporate governance demands an effective and
transparent risk management policy and management system.
Risk management is now becoming an established
organisational discipline. Identifying risk, assessing its likely
impact, establishing mitigating options, deciding optimal
actions and implementing decisions are becoming part of the
normal agenda for all lines of business. Among different types
of risk, ‘people risk’ is now seen as one of the top ten threats to
an organisation’s earnings, according to research by
PricewaterhouseCoopers (PwC).
Risk management is a commonly used term that covers a
number of activities and methods. The extension of traditional
risk management techniques to an entire organisation has

become known as enterprise risk management (ERM) and HR
has a key role to play here.
Typically, risk management will evaluate all risks across an
organisation and rank them based on impact and probability. It
will look at a number of treatments for identified risks and
typically look to insurance as a means of transferring the risk of
an adverse outcome.
(CIPD, 2009)
Within this session, we’ll look at a range of risks in relation to
HR.
2. Employee risk management
In HR there are a number of strategic risks that need to be
managed.
Helen Rideout’s Employee Risk Management (2014) focuses on
the risks that come from employees. She notes that there are
three types of employee threat:
1. Non-malicious and unintentional, where the individuals are
blameless
2. Non-malicious and intentional, e.g. a poor judgement call
3. Malicious and intentional, where an individual looks to
exploit weakness between processes and security for
personal reasons.
Rideout suggests the following cycle for employee risk
management.

3. Common risks
Let’s now focus on some of the key areas that HR has to deal
with in the area of risk.
Succession Planning
Only a small number of businesses have their next CEO
succession plan in place. The main issue would be what would
happen if the current CEO left or if there was a takeover? This
is a key area for HR as it plays a critical role in leadership
development. It is important to bring new blood into a business
as there can be a tendency to lean towards the idea of ‘an old
boys club’. A way to mitigate this would be to use internal
audits and raise the issue with the risk committee.
Action point
Is succession planning managed within your business? Find out
how your organisation deals with this risk.
Ethics and behaviour

Brand damage is a big issue in today’s world. If a company
makes the news for the wrong reasons there could be
damaging consequences for the organisation. HR needs to
promote the ethos of guardian of values and provide a culture
of encouragement. A strong ethics committee could be used to
review and analyse any potential issues.
Action point
Do you have an ethics committee working within your
organisation? If not, in what other ways could you promote
ethical behaviour?
Intellectual property
This links in with customer data and an obvious risk is the loss
of information. This could be highly damaging to the
organisation and may result in punitive measures and brand
damage. One of the many roles of HR is to manage sensitive
data. This needs to be provided in induction training and
highlighted throughout the employee life cycle. Whilst
sometimes information is lost due to error, it can also be stolen
or passed on illegally. To manage this issue it is recommended
that recruitment includes a vetting process to look into
employees’ backgrounds, such as a Disclosure and Barring
Service (DBS) check, previously known as CRB.
Action point
Consider the valuable intellectual property within your own
organisation. What are the likeliest risks relating to this
material and how could you mitigate against these?
Mergers and Acquisitions
Unfortunately, you cannot prevent your business being taken
over or merging and this has become a common business
situation and will link in with the area of TUPE, redundancy
payout and disengagements. The role of HR here is to be part
of the due diligence, employment law and the practical side of
TUPE. It is important for HR to build relationships with the new
part of the business and form part of any negotiations and
prospective financial changes.

Action point
What specific risks do you think are most likely within an
acquisition scenario?
Cyber security risks
All modern organisations use information as part of their
normal business to deliver services. They also depend upon
sharing information with partners and customers. The
exchange of information and the delivery of goods and services
use the Internet (for example, external data storage provided
by Cloud environments) and other forms of data transfer such
as USB or other devices. This interconnected world can make
doing business more efficient and cheaper. It is vital, however,
that the information used to operate the business is protected ‒
in the workplace, on the move and online.
Cyber security is about protecting yourself, your organisation
and any employee or customer data when doing business in
today’s interconnected world. This means having confidence in
the cyber security of your organisation, both from a technical
(hardware and software) perspective and from an employee-
safeguarding perspective.
Cyber security is important for HR professionals for two main
reasons:
1. As HR professionals you have a key role to play in
promoting the wellbeing of your company’s employees.
Helping to support educate and inform others of how to
present and protect themselves online will both support
individuals and safeguard your organisation against
unauthorised access to commercially sensitive
information.
2. Promoting cyber security helps to ensure that your
organisation’s information and operations are protected.
The majority of cyber security incidents have been proven
not to be a technological or hardware issue but a result of
human behaviour. HR therefore has a pivotal role to play
in influencing the behaviour of your organisation’s
employees.

Compliance and regulation
Businesses need to be aware of an array of regulatory
requirements. Within HR, managers need a strong
understanding of workplace regulations, including health and
safety and employment law.
A good example of a regulation which may sound unlikely to be
a common risk but which in fact requires serious consideration
is the Bribery Act 2010. The Bribery Act covers not only bribing
and being bribed but, crucially, also the failure to prevent
bribery.
In 2016, Sweett Group plc became the first UK-listed company
to be convicted of failing to prevent bribery. In this case, the
organisation hadn’t made sure that messages concerning the
required employee conduct were communicated to all parts of
the organisation. As a result, when a subsidiary in the Middle
East was found to have offered bribes to secure a contract, the
company was unable to defend an allegation that it had failed
to prevent bribery.
HR’s role on compliance and regulation is thus to ensure the
clear and transparent communication to the correct audience,
and to provide training programmes that have adequate
information on compliance issues.
4. Prioritisation of risk
Following on from the above examples we will now move on to
the prioritisation of risk. Each risk should be rated for the
probability of its occurrence and the potential impact on the
project or workplace. Plotting on a chart can help you identify
and focus on the high probability and impact ones.
Ideally in risk management, a risk prioritisation process is
followed in which those risks that pose the threat of great loss
and have great probability of occurrence are dealt with first, as
shown in the table below.
IMPACT ACTIONS
SIGNIFI Considerable Must manage Extensive

CANT management
required
and monitor
risks
management
essential
MODER
ATE
Risk are
bearable to
certain extent
Management
effort
worthwhile
Management
effort required
MINOR Accept risks Accept but
monitor risks
Manage and
monitor risks
LOW MEDIUM HIGH
LIKELIHOOD
After the risks have been identified they must be assessed on
the potential impact. This is when we prioritise the risk, in
generic terms:
Likelihood of occurrence x Impact = Risk.
HR needs to develop risk management strategies to manage or
minimise the impact of the risk. It is important to adopt
strategies that are realistic and cost effective. Sometimes it is
necessary to accept the risk rather than using excessive
resources to manage it or mitigate the risk by drawing up
contingency plans. Typically, risk management would link in
with project management processes within the organisation.
The risks and their probability and impact should be reviewed
as part of regular monitoring. A way to record risk would be to
use a risk log, like the one in the example below.
Risk
Descri
ption Proba
bility Impact
Risk
rating,
High,
mediu
m, low
Action
Taken
Lead
empl
oyee
Snow
forecast
for 12
Decemb
High Factory
staff x 26
will be
unable to
High –
Shipme
nt of
100
Spoken
to the
customer
and if
Forem
an:
Garry

er.
come into
work due
to the
weather
conditions
and
therefore
unable to
pick and
pack the
order for
the
customer.
boxes of
goods
are due
to leave
12
Decemb
er.
there is
snow
shipment
will be
put on
hold until
the staff
are able
to pick
and pack
the
order.
Barns
As you can see, the above risk log provides the business with a
clear idea of what might happen and the consequences. When
the risk is identified in advance, certain steps can be put in
place to deal with the situation.
A more challenging risk to the organisation’s effectiveness is
the risk that is present but cannot be identified. An example of
this is a perpetual inefficiency in production process
accumulating over a certain period of time. This will result in an
operational risk.
5. The risk management cycle
In practice, most organisations follow the Risk Management
Cycle, which can be seen below.

Risk can take many different forms and can be at the base or
the surface level, which can then be broken down into two main
areas – source and problem.
Risk Source: This can be either internal or external. The
example provided in the risk log showed an external source as
bad weather was beyond anyone’s control. Internal sources can
be controlled to a certain extent.
Problem: A problem at the surface could be the threat of
accident and casualties at the workplace if there was a fire.
Action point
Think of a working risk example and apply it to the Risk
Management Cycle. Think about how this risk will affect the HR
department and the role HR would play in helping to deal with
the risk.
By understanding all the risks that could pose a threat and
working out solutions with the whole of the business, the
organisation could maximise productivity and minimise overall
failures.
6. HR-related risk issues

The table below shows a wide range of risks identified by HR
practitioners.
Action point
Choose a few and consider the HR response or mitigation to the
risk.
Cultural
issues
Continuity of leadership
Leadership culture
Objective-setting/reward for executive
managers
Management behaviour
Performance culture
Addressing diversity issues
Employee behaviour and misconduct
Employee integrity and competence
Diversity of the workforce failing to respond to
opportunities
CSR and ethical issues
Employee
engageme
nt
Brand and reputation issues
Employee commitment
Change management programmes
Mergers and acquisitions
TUPE/outsourcing
Transformation of HR function
Trade union relationship
Industrial relations and strike action
Legislative
complianc
e
Health and safety regulation
New legislation compliance
Employee litigation

Equal pay equal value
Regulatory compliance
Resourcing
issues
Recruitment difficulties of key groups
Retention of key staff
Workforce current skills shortages
Management skills deficits
Developm
ent Issues
Workforce planning
Future talent requirements and succession
planning difficulties – front-line staff/specialists
graduates/managers/leaders
Career management
Developing key competencies for the future
Leadership skills
Costs and
productivit
y
Pension scheme funding
Insurance and underwriting
Sickness and absence management
Performance management
Best-value reviews and cost challenge
Employee
Protection
Health and safety management
Business continuity planning
Employee health and well-being, Healthcare
provision (US)
Political and social stability of the local
environment
7. Health and Safety in the workplace

The area of risk perhaps most frequently discussed is Health
and Safety.
The assessment of risks to the health and safety of employees
is regulated by the Management of Health and Safety at Work
Regulations 1999, regulation 3. This offers guidance for risk
assessment and the regulation states that the employer must
carry out a risk assessment of the workplace and make all
necessary changes to bring property, practices and procedures
up to standard. Specifically, it states that “Every employer shall
make suitable and sufficient assessment of:
a. The risk of health and safety of the employees to which
they are exposed whilst they are at work and
b. The risks of health and safety of the persons not in his
employment arising out of or in connection with the
conduct of him of his undertaking ….”
The Health and Safety at Work Act (1974) places an obligation
on the employer to maintain standards in health and safety and
the wellbeing of people throughout the workplace.
The Health and Safety Executive (2016) states that “As part of
managing the health and safety of your business you must
control the risks in your workplace. To do this you need to think
about what might cause harm to people and decide whether
you are taking reasonable steps to prevent that harm. This is

known as risk assessment and it is something you are required
by law to carry out.”
When thinking about your risk assessment, remember:
 A hazard is anything that may cause harm, such as
chemicals, electricity, working from ladders, an open
drawer, etc.
 The risk is the chance, high or low, that somebody could
be harmed by these and other hazards, together with an
indication of how serious the harm could be.
There are many ways an organisation must conform to the law.
A good way to put this into practice is to imagine that you are
setting a business up from scratch. There are 11 main actions
(steps) you need to provide, which are:
1. Appoint someone to be responsible for health and safety
matters.
2. Write a health and safety policy – this will outline how you
would manage your health and safety.
3. Set up a risk assessment procedure ‒ review how you
would manage what harm the employees could face,
internal and external.
4. Consult with employees on health and safety matters ‒
many organisations have health and safety committees.
5. Provide free health and safety training for your employees
‒ this will allow them to understand what hazards and
risks they may face and also how they would be able to
deal with the specific situations. In some cases, provide
them with personal protective equipment (PPE).
6. Provide appropriate welfare facilities ‒ this would include
washing facilities and drinking water for all employees;
this would also include those with disabilities. This forms
part of basic health and safety well- being needs.
7. Provide first aid arrangements – this would include
accidents and ill health.

8. Make sure you have a health and safety poster displayed
in the workplace and provide clear information on health
and safety.
9. You will need to have Employers’ Liability Insurance and
the certificate will have to be displayed.
10. Be up to date with any changes to health and safety.
This can involve speaking to HSE and receiving training on
changes to the legislation.
11. Report any work-related accidents, diseases and
dangerous events. This forms part of RIDDOR: Reporting
of Injuries, Diseases, and Dangerous Occurrences 1995.
It’s important to note that adherence to legal obligations is in
itself not enough. The organisation must also consider moral
obligations, particularly as legalities change according to
region.
8. Health and wellbeing

The word wellbeing, rather than welfare, is now used within the
industry. This is because it not only covers the services that
one associates with welfare, but also refers to physical and
mental health, which implies that employees should be working
within a physically safe and stress-free environment. Wellbeing
is concerned with employees’ problems, such as their working
hours, workload, financial, home and marriage situations,
susceptibility to stress and general health and lifestyle.
The role of HR in managing a healthy workforce is to collect
statistics. Knowing where a problem exists and, above all, being
able to quantify the size of the problem, will allow the business
to decide on the priorities.
Some managers are reluctant to offer advice and assistance to
employees on developing a healthy lifestyle. Lifestyle is a
personal issue which can be seen as an unwarranted intrusion.
When developing a healthy workplace some of the following
examples could be used as initiatives:
 Smoke-free areas – in some countries, it is now illegal to
smoke in a public place; having a no-smoking policy will
create a climate of good health and wellbeing.
 Consulting the workforce – ask the employees to provide
information on what kinds of food they would like to have
in the staff restaurant.
 Provide employees with information – this could include
healthy living, physical activity, lifestyle and looking after
yourself.
 Provide health checks – there are many ideas such as the
‘well man’ and ‘well woman’ schemes to take advantage
of.
 Creating and managing a work environment which is
physically safe and generally conducive to good health.
ACAS (2016) states that work can have a positive impact on our
health and wellbeing. Healthy and well-motivated employees
can have an equally positive impact on the productivity and
effectiveness of a business.

Mind (2016) states that one in four people have some form of
mental health problem. As HR professionals it is our duty of
care to the employee to ensure we can support them in a
professional and ethical way. Think about how the HR function
could measure these types of sensitive areas. An open-door
policy is a good place to start, as is educating employees on
mental health in the workplace.
Organisations should adopt a positive attitude towards those
experiencing or recovering from mental health issues. Where
possible, reasonable adjustments should be made to ensure
people with a mental health problem are able to work and
make a positive contribution to the organisation.
Evaluating the contribution of the HR function
In this section you will put your knowledge to the test by
answering questions on the material covered this week.
Improving your own measurements Activate
During this week’s activities we’ve looked at a range of tools for
measuring the contribution of HR. Now we’d like you to
consider how this might be applied to your own organisation (or
an organisation you are familiar with).
Write a short report noting three key changes you would like to
make to your organisation's current method of measuring HR
contribution. Make reference to the following:
 Implementing measures of efficiency, effectiveness and
impact
 The benefits of your suggested changes
 The tools you would use for measurement.
Post your report in the discussion thread below.
Separate groups: Unit Group E

Risk! - Activate
Following on from this week’s activity on risk management,
we’ll now look at a couple of examples of risks. You’ll then need
to come up with some risk scenarios of your own.
Example risk 1: Unhappy holidays
Amir and Kim are administration support staff for an online
support business. Both work in the same department and both
would like to have the first week in September off as annual
leave. This will cause a problem as this is a busy time for the
department and may lead to an unreasonable workload for the
rest of team.
How could you avoid this sort of situation?
Read more
Example risk 2: Warehouse woes

Michael has tripped and hurt his leg. The warehouse floor is
often treacherous due to discarded packaging. Are accidents
like this simply an inevitable part of life? How might you reduce
accidents in the workplace?
Read more
Further reading
It’s also possible that greater employee engagement could help
make the workplace safer. Check out the link below which
outlines research that suggests a correlation between
employee engagement and a significant reduction in H&S
incidents.
https://hbr.org/2013/07/employee-engagement-does-more
Evaluating the contribution of the HR function –
Personal Reflection
This week we’ve looked at ways of evaluating the HR function
and how HR’s contribution links to the overall performance of
the business. We’ve outlined a number of tools that can be

used to measure the HR contribution and noted that risk
management is one important area where HR can contribute to
the organisation’s overall performance.
Take a little time now to reflect on your own HR function’s
contribution.
Is it evaluated in a systematic fashion (or at all)?
Do you think your HR function could be contributing more to
the organisation? How?
Personal reflection