Keeping score

Steve Cesare

With January now upon us, landscape companies should be in the process of determining, approving, and/or publishing their 2014 annual goals. Readers, clients and colleagues are well of my advocacy of the balanced scorecard model for incorporating four interdependent goal perspectives essential to sustain long-term organizational success.
 

Balanced scorecard

1. Financial perspective: Addresses the company’s fiscal objectives;
2. Customer perspective: Focuses on the customer experience;
3. Efficiency perspective: Directs attention on the effectiveness with which the company’s internal processes are conducted;
4. Human resources perspective: Summarizes the quality of all people system initiatives in contributing to organizational results (e.g., staffing, training, safety).

Human Resources metrics.

While landscapers are familiar with empirical indices related to the financial, customer and efficiency perspectives, they frequently have difficulty identifying quantitative performance metrics associated with the human resources perspective. This article provides a basic list of common human resources metrics that landscapers should consider in helping them achieve their 2014 organizational goals.
 

Staffing

• Total cost of hire – Add all recruitment, selection and orientation costs related to each new hire.
• Average time to hire – For every vacancy, measure the elapsed time between time of posting and time to start, then divide that sum by the number of positions filled.
• Employee referral rate – The percentage of new employees who joined the organization during the present year based on a referral from a current company employee.
  
   

Safety

• Injury incidence rate – Add all first aid and medical care injuries that occur within each month, divide that sum by the total number of payroll hours for the measured business unit during that month, and then multiply that quotient by 10,000.
• Injury costs – Track the total costs associated with all company injuries as summarized by the Loss Run Reports sent to the landscaping company by its workers’ compensation provider each month.
  
   

Training

• Certification rate – The percentage of employees within a job classification that attained a professional certification during the year.
• Learning index – The difference between a trainee’s knowledge test score taken upon completion of the training course compared to the trainee’s score from the same knowledge test taken before the training course began.
  
   

Employee engagement

• Performance linkage – The percentage of employees who state they have a “strong” or “very strong” understanding of how their individual job performance directly contributes to overall company results, on an employee attitude survey.
• Executive level trust – The percentage of employees who respond they have a “very high degree of trust” in the company’s executive team, on an employee attitude survey.
  
  

Development

• High-potential promotion rate – The percentage of employees designated as “high-potentials” (i.e., likely to be promoted within 18-24 months) who were promoted during the current year.
• Performance evaluation rate – The percentage of total company employees who received a formal written performance evaluation during the current year.
  
   

Efficiency

• Revenue per employee – Total revenue sustained by a given business unit divided by the number of field employees in that business unit (e.g., installation, maintenance, irrigators).
• Gross margin per employee – Total gross margin dollars generated by a given business unit divided by the number of field employees in that business unit (e.g., installation, maintenance, irrigators).
  
   

Retention

• Key employee retention – The percentage of valued employees who remain employed by the company throughout the entire year.
• Intent to turnover – The percentage of employees who state they “will likely leave” or “will definitely leave” the company within the next year, on an employee attitude survey.
  
   

Summary.

During the month of January, landscapers must develop annual empirical goals for all four categories within the balanced scorecard, and monitor them each month. That point being said, landscapers should rely on key human resources metrics, tailored to their unique strategic plan and organizational culture, to help achieve their company goals for 2014.