Value-for-money indicators to measure public sector HR performance met with lukewarm reception

Value-for-money indicators to measure public sector HR performance have received a lukewarm reception from the profession.

The National Audit Office and Audit Commission have urged public sector HR, finance, IT, estates management and procurement departments to use voluntary indicators to evaluate their efficiency.

The cost of the HR function per employee, the ratio of employees to HR staff, and staff turnover should all be measured, said the auditors.

But senior HR experts warned there was a risk that the indicators could introduce a league-table mentality, while useful, qualitative issues driving efficiency were being neglected.

Duncan Brown, director in the HR practice at consultancy PricewaterhouseCoopers, told Personnel Today: “There is a lot to learn from comparing one organisation with another. But if the results are used in a crude league-table way, it may not be useful. [The indicators] are too simplistic and do seem to be cost-driven.”

The auditors’ standards also encourage departments to measure the number of women in leadership positions and the percentage of disabled staff.

The Public Sector People Managers’ Association said the standards were not detailed enough.

Association vice-president Stephen Moir said: “Public sector bodies have a statutory duty to report on composition, the percentage of disability and the percentage of women [working for them]. If the auditors’ study had been more detailed, maybe it would have realised that a lot of the indicators are already out there.”

He said the audit bodies should focus more on the overall effectiveness of people management, rather than the cost of the HR function.

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