It is important for companies to evaluate the quality and performance of their different departments (Baruch, 1997). Evaluating the human resource department (HRD) is even more important due to its many links with and influences on other items -for example, with increased productivity (Fox et al, 1999), good customer service (Fox et al, 1999), increase profitability (Delery and Doty, 1996) and overall organisational survival (Welbourne and Andrews, 1995). As such, evaluating the department is of primordial importance (Stavrou-Costea, 2005: 114) and it is generally believed that HRM practices, when aligned with the organisation overall strategy, can help create a competitive advantage (Roos, Fernström and Pike, 2004). As showed by Ulrich's (1997) framework, the role of HR can be classified in four categories (administrative expert, employee champion, change agent and strategic partner).
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[...] Firstly, some judge that it is not possible to accurately measure a sub-unit of an organisation secondly the goals and objectives of the unit are vague and varies depending on the group being studied (owner, manager, employees, trade unions etc), fourthly, the goals are often long term which makes them difficult to assess (Baruch, 1997:379-380) and lastly, HRM encompass many different function which are often inconsistent or in contradiction with one another (Ahmed, 1997). Using basic approaches (such as those describe before i.e. goal attainment, attitude surveys and activity analysis) in parallel with one another for both employees and employer, it is possible to get a better picture of the performance of an HRD and from that gain an understanding of what the department is doing, how it is doing, how it can be improved and most importantly how it relates to and supports the overall organisational strategy. [...]
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[...] Firstly, it is important to use ratio that reflect performance of the HR function. Some ratio might represent things that are beyond the department. For example, while turnover level can be used, it might not be a reflector of the effectiveness of the department as it might be the result of factors outside of the department or even that of the organisation (Baruch, 1997: 379), this is known as criterion contamination (Neal and Hesketh, 2001:10). Secondly, owners/managers need to insure that the ratios used will provide relevant information i.e. [...]
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