HR Metrics Series I: Quality of New Hire

Quality of New hire is our fourth metric after the following three metrics (discussed in earlier posts)
1. Employee Attrition
2. Time to Fill
3. Cost per hire
The normal measurement time is taken to be 3 months for this metric and different time frames can be used but 3 months is an ideal time of measurement because the more the time to measure the quality, the higher the productivity loss to the organization for inefficient new hires.
How do we measure Quality of new hire? For measuring quality as such, organizations use various tools like six sigma, ISO etc. However, the most prudent way of measuring Quality of new hire is explained below
1. Define the core competencies (Aptitude, behavioral skills, productivity matrix etc)
2. Define the process competencies (Understanding and practice of process)
3. Measure and compare the core as well as process competencies with the benchmark performance levels
4. Determine the variance
This variance can further be analyzed to compare it with the variance levels of others and also with the minimum levels of standard variances.
This metric is considered important because selection of an inefficient candidate will impact the productivity levels of the organization directly.
To illustrate the above theory in a practical situation, an example is produced bel0w
1. Core competencies defined are A, B and C
2. Process competencies defined are alpha, beta & gamma
3. After 3 months, the candidate performance in core and process competencies is arrived as
A - 40% B - 70% C - 70%; alpha - 70% Beta - 50% Gamma - 80%. Here Core competencies score is 60% (Average core competencies score) and process competencies score is 66.67%.
4. The standard core competencies score desired for a new hire is 80% and process competencies are 75% (considered as an example case).
5. When compared to the standard scores, the scores remain unmatched to the current scores and hence the quality of new hire is not in line with the expected quality levels.