Lecture 3. Evaluation of the economic and social efficiency of personnel management.

Plan:

3.1 Essence and indicators for assessing the economic and social efficiency of the organization’s personnel management.

3.2Evaluation of economic results and costs associated with the improvement of personnel management.

3.3 Evaluation of the effectiveness of the organization’s personnel.

3.4 Evaluation of the effectiveness of the organization’s personnel management service.

3.5 Evaluation of the effectiveness of projects to improve personnel management.

3.1 Essence and indicators for assessing the economic and social efficiency of the organization’s personnel management.

In economic theory, efficiency is defined as a function of the results achieved and the resources expended on it. Thus, speaking about the effectiveness of personnel management, its following components should be taken into account. 1. The actual effectiveness of personnel management, which consists of the economic and social efficiency of management. 2. The effectiveness of the organization of personnel management, which can be expressed both through the analysis of the organization of management, and through the integral socio-economic efficiency of personnel management, which, in the end, is a general indicator of organizational effectiveness. To assess the economic efficiency of personnel activities of the personnel management service, general and particular performance indicators are introduced. The general indicators include the growth of labor productivity and the annual economic effect (savings of reduced costs). At the same time, the growth of labor productivity is determined in two ways: – through an increase in labor productivity (in percent) as a result of savings in the number of employees; – through the reduction of labor intensity to the growth of labor productivity. The annual economic effect is calculated through the product of the annual volume of production by the amount of change in the cost of production, minus the costs of implementing measures. Private indicators include: – reduction of labor intensity of products, standard hours; – relative savings (release) of the number of employees, people; – saving of working time in connection with the reduction of losses and productive time costs, man-hour; – increase in production volume, %; – savings from reducing the cost of production, rub.; – savings in connection with the reduction of occupational morbidity of industrial injuries, rub.; – savings from cost reduction on conditionally permanent inputs, rub.; – savings from the reduction of specific capital investments as a result of better use of equipment, %. The given system of indicators allows to express in numerical terms (in kind or monetary form) the effect of the process of personnel management as a whole.

Summarizing the foregoing, the category “efficiency” in relation to personnel management of an enterprise can be specified as follows. 1. The effectiveness of personnel management can be expressed through the socio-economic efficiency of personnel management and the effectiveness of the organization of personnel management or organizational efficiency. 2. Socio-economic efficiency should reflect the degree of achievement of the social and economic goals of personnel management at the enterprise. 3. The organizational effectiveness of personnel management should express the ability of the personnel management system to achieve a given socio-economic efficiency. Consider approaches to assessing the specific effectiveness of personnel management. It highlights two different methodological approaches to assessing the performance of any system. The first approach is based on comparing the magnitude of the obtained economic, social, environmental (or cumulative) effect and the amount of costs that caused this effect (assessment of the performance of the system). The second approach consists in the ratio of the final useful result formed in the process of functioning of a particular system to a predetermined result in accordance with the goal (assessment of the degree of achievement of the goal of the system functioning). To assess the effectiveness of personnel management, it is necessary to determine what can be an effect, a useful final and predetermined socio-economic and organizational result, as well as what should be included in the category “cost structure for obtaining the effect”. To this end, let us consider the above methodological approaches in more detail. The application of the first approach to assessing the socio-economic efficiency of the functioning of the system will express the level of labor and resource costs per unit of output. This form of efficiency assessment characterizes the measure of return or the measure of effectiveness, expressed as the effect obtained from each ruble of costs incurred in the production process. This methodological approach has been widely used in assessing production efficiency. To apply this methodological approach, it is required to determine the content, essence, composition and structure as the resulting effect (numerator of the specified ratio) and the total amount of costs (denominator). Their definition depends on the method used to evaluate the effectiveness, of which the most recognized are three methods: cost, resource and cost-resource. The cost method is to attribute the effect to the sum of current costs, the resource method is to attribute the effect obtained to the cost of the resources used (for example, fixed assets). Finally, the essence of the cost-resource method is the assignment of the effect obtained to the total amount of current costs and resources used. As noted in the literature, the advantage of the cost-resource method is that it “provides an assessment of the level of return not only of current costs or resources used, but a comprehensive simultaneous assessment of the effectiveness of current costs and the level of return of the resources used, that is, an integral assessment of efficiency.” That is, when using the first methodological approach to assessing the effectiveness of personnel management, the cost of obtaining the effect can be calculated in the most optimal way through the total aggregate cost of the resources used and the current costs incurred. However, in addition to determining the cost structure for personnel management, it is necessary to determine the economic content, composition and structure of the effect of personnel management. In our opinion, the effect of the functioning of the personnel management system should take into account all three components of the category “efficiency”: economic, social, organizational. The economic effect, in our opinion, should reflect the economic essence of the process of meeting the needs of production in personnel. Such an expression is the labor of workers, which is “consumed” by production. Consequently, the economic effect of personnel management can be expressed through the productivity (productivity) of labor.

The social effect of personnel management should express the degree of satisfaction of the needs of the personnel. As established above, the needs of workers can be generally reduced to three types of needs: existence, growth relationships. Therefore, in determining the social effect of personnel management, the degree of satisfaction of these types of employee needs should be taken into account. In our opinion, the following types of indicators can be used to determine the social effect. Indicators of the degree of satisfaction of the needs of the existence of the employee (employees): – wages received by the employee in the amount of social payments (services); – the degree of employee satisfaction with housing. Indicator of the degree of satisfaction of the needs of the relationship of employees: – staff turnover at the enterprise, division; – analysis of the structure of the reasons for dismissal; – an indicator of social tension in the team. An indicator of the degree of satisfaction of the needs of the growth of workers: – the intensity of training, training and retraining of workers; – the volume of rationalization proposals made by the employee. The organizational effect should express the essence of the organizational effectiveness of the organization of personnel management. Therefore, when determining the organizational effect, the degree of readiness of the personnel management system to achieve a socio-economic effect, that is, the degree of organizational readiness of the personnel management system for functioning, should be taken into account. At the same time, the integral result of the functioning of the personnel management system can serve as an expression of organizational efficiency, as which we have adopted the socio-economic efficiency of personnel management. Since the analysis of the organization of management, implying the correlation of the results achieved with the planned ones. That organizational efficiency, in our opinion, should be determined on the basis of the second methodological approach. Returning to the consideration of the problems of determining the social and economic efficiency of personnel management, it should be noted that since the assessment of efficiency must be expressed by a certain value, both the denominator and numerator of the effect-to-cost ratios must be quantified. Because of this, when applying the first methodological approach to the analysis of the effectiveness of personnel management, both economic and social effects should be expressed in cost form. To solve the problems of calculating the magnitude of the resulting effect, methods of direct and indirect calculation can be applied. The method of indirect calculation involves the calculation of the cost estimate of the effect of producing indirectly, through the results of the activity of the evaluated object. This method is based on the principles of the theory of use value …. due to the presence of a complex of useful properties that form the use value of a product, its use in the sphere of consumption determines the formation of the effect. “To calculate the effect of personnel management based on the application of this method, it is necessary to determine the use values the results of the management process – social and economic.If this method is quite applicable to calculate the magnitude of the economic effect, since a specific use value is formed as a result of the management of the worker’s labor, then it is difficult to use this method to calculate social efficiency. is that in meeting the needs of employees, personnel management only manages the provision of a set of existing certain benefits to the employee. e use-value by the worker is not possible. In this regard, the method of direct calculation of the magnitude of the economic effect is of interest. Its essence in calculating the socio-economic effect of personnel management is reduced to assessing the “market” value of employees who are the objects of management, that is, to assessing the amount of investment in employees. Consider the second methodological approach to evaluating the effectiveness of the organization of PM – the comparison of the obtained useful final result with a predetermined result, in order to assess the degree of achievement of the goal. In our opinion, the ratio of the actually obtained results of the personnel management system with the results provided for by the planned targets, the current standards and the targets for the functioning of the PM system will characterize the degree of achievement of the goal, and, consequently, the socio-economic or organizational effect obtained, that is, this approach allows to express in numerical form the effectiveness of the organization of PM. In this approach, the problem of correlating the values of the economic and social effect of the PM organization is eliminated, since the degree of achievement of production, social or organizational management goals can be represented by dimensionless values. , integral character, quantitative certainty. In this regard, the approach to calculating the magnitude of the socio-economic effect by expressing the degree of achievement of the goals set by dimensionless values seems to be the most appropriate for these requirements. Thus, based on the analysis, it can be seen that the development of a mechanism for assessing the socio-economic efficiency of a PM organization should be based on the following principles: that form the level of efficiency. 2. Evaluation of the effectiveness of the PM organization can be provided by a system of indicators that includes several hierarchical levels and reflects the degree of achievement of a given result. 3. The main target result should be considered the need of the enterprise for human resources of the required quantity and quality, the needs of employees at the enterprise system of dimensionless indicators. 5. The final useful result, reflecting the real socio-economic effect, is obtained by adjusting the main result, the mechanism of which is to improve the organization of PM. Concluding the consideration of modern problems of enterprise personnel management, the following conclusions can be drawn: 1. Enterprise personnel management as a system should be considered in three aspects: terms), – social (in the social aspect, personnel management should be aimed at meeting the needs of employees), – organizational (in the organizational aspect, personnel management should be considered as a system whose goal is to achieve the socio-economic goals of management). 2. The mechanism for the implementation of the PM process is a personnel strategy, specified for clearly defined goals of the PM and implemented through the personnel policy. 3. Personnel management as a system is characterized by such features as the presence of a management goal (meeting the needs of the production system in personnel and meeting the needs of employees in professional and personal development); the presence of an object of influence of the system, (enterprise personnel); the presence of the subject of system management (head of the personnel management service, heads of departments); the presence of control actions (measures for personnel management); presence of system elements (functional subsystems); the presence of relationships between elements (organizational structure and organizational processes). 4. Effectively functioning organization of personnel management of an enterprise can be ensured by taking into account the historical patterns of development of the concepts of personnel management. 5. Stages of development of market relations determine the evolution of the concepts of personnel management. Adaptive changes in the personnel management system find their expression in changing the models and philosophy of personnel management, changing the functions and organization of personnel management. This relationship should be taken into account when creating structures for managing the personnel of enterprises. 6. Socio-economic efficiency of the organization of personnel management can be assessed by correlating the identified degree of achievement of the goals of personnel management with the costs of achieving the goals. 7. The degree of readiness of the personnel management system to implement its goals can be assessed through the organizational effectiveness of the personnel management system, by determining the type of personnel policy of the enterprise through functional, organizational and system features.

3.2 Evaluation of economic results and costs associated with the improvement of personnel management.

Evaluation of the economic results of improving the system and technology of personnel management personnel, social development, development of organizational structures of management, legal support of personnel management, information support of personnel management of the organization. The analysis of each of these subsystems should be carried out in the context of the following elements: management functions, organizational structure of management, management personnel, technical management tools, information, management organization methods, management technology, solutions. Such an analysis makes it possible to determine the state of individual subsystems and their elements, reveal reserves for improving their functioning, develop project activities and collect the necessary data to calculate the economic results and costs associated with the implementation of the project according to the formulas given in Appendix A. The calculation of economic results should begin with determination of those non-production factors, the action of which favorably affects the effectiveness of personnel management in connection with the implementation of one or another measure to improve the functioning of one or another subsystem of the organization’s personnel management system. The calculation of economic results in the areas of production and operation of products should be preceded by an analysis of the state of production and operation of products for the following elements of the production system: production functions, organizational structure of production, production personnel, means of labor, objects of labor, methods of organizing production, production technology, products (services) .

3.3 Evaluation of the effectiveness of the organization’s personnel

Evaluation of labor results is one of the functions of personnel management, aimed at determining the level of efficiency of work performance. Evaluation of labor results is an integral part of the business evaluation of personnel, along with an assessment of their professional behavior and personal qualities, and consists in determining the compliance of the employee’s labor results with the set goals, planned indicators, and regulatory requirements. The indicators of the final results of the work of employees, as well as its content, are influenced by a combination of various factors.

Evaluation of the results of work of different categories of workers (managers, specialists, other employees, workers) differs in their tasks, significance, indicators or characteristics, and the complexity of identifying results. Evaluation of the results of the work of managers and specialists characterizes their ability to directly influence the activities of any production or management link. In the most general form, the result of the work of an employee of the management apparatus is characterized by the level or degree of achievement of the management goal at the lowest cost. The result of the manager’s work, as a rule, is expressed through the results of the production, economic and other activities of the organization or divisions (for example, the implementation of the profit plan, the growth in the number of customers, etc.), as well as through the socio-economic working conditions of employees subordinate to him (for example , wage level, staff motivation, etc.). The result of the work of specialists is determined based on the volume, completeness, quality, timeliness of the performance of their assigned duties. In practice, when evaluating the performance of managers and specialists, along with quantitative indicators, i.e. direct, indirect ones are used, characterizing the factors influencing the achievement of results. These performance factors include: – efficiency of work – intensity, intensity of labor – complexity of labor, quality of labor, etc. In contrast to direct indicators of labor results, indirect assessments characterize the employee’s activities according to criteria corresponding to ideal ideas about how to perform job duties and functions that form the basis of this position, and about what qualities should be shown in connection with this. Evaluation of the results of workers is carried out quite simply, since the quantitative and qualitative results of their work are expressed in the quantity of products produced and their quality. By comparing with the planned task, the result of their work is evaluated. The procedure for evaluating the results of work will be effective if the following mandatory conditions are met: setting clear “standards” for the results of work for each position (workplace) and criteria for its evaluation; development of a procedure for evaluating the results of work (when, how often and who evaluates, evaluation methods); providing complete and reliable information to the appraiser on the results of the work of the employee; discussing the results of the assessment with the employee; making a decision on the results of the assessment and documenting the assessment.

3.4 Evaluation of the effectiveness of the PM service

The assessment of the activities of the organization’s personnel service is based on determining how much it contributes to the achievement of the organization’s goals and the fulfillment of its tasks. The evaluation results serve as final indicators that focus on the main problems of working with personnel, such as the quality of work performed, employee satisfaction, performance discipline, staff turnover. Evaluation of indicators of the degree of staffing, is quantified by comparing the actual number of employees with the required (calculated) value for the complexity of operations or with the planned number and number provided for by the staffing table; as well as qualitatively – in accordance with the professional qualification level, education profile, practical experience of employees with the requirements of the jobs (positions) they occupy. Job satisfaction indicators are assessed based on the analysis of employees’ opinions. Such opinions are identified through a survey by questioning or interviewing to express the reaction of employees to the personnel policy of the organization and its individual areas. The main indirect criteria for the effectiveness of the activities of personnel management services are indicators of staff turnover and absenteeism. Turnover is one of the most common organizational forms of staff mobility. In practice, it is customary to refer to turnover as dismissal of one’s own free will, as well as dismissal at the initiative of the administration due to absenteeism of employees, systematic violations of labor discipline, etc. At the same time, turnover cannot be approached unambiguously, since the process of staff turnover performs a number of important positive functions : intersectoral and territorial redistribution of labor, qualification and professional promotion of personnel, maintenance of external and internal labor movements caused by technological progress. In addition, the complete absence of labor movements in the organization, including turnover, leads to the “ossification” of the structure of the team. The absolute scale of turnover is measured by the number of dismissals of employees at their own request, as well as at the initiative of the administration (for a certain period). The relative turnover rate – the staff turnover rate is defined as the ratio of the number of employees who quit for reasons attributable directly to turnover (of their own free will, for violations of labor discipline) to the average number of employees: Kt u003d Ru / p – 100, where K is the turnover rate ; Ru – the number of employees dismissed for reasons of turnover; p is the average number of employees. Organizations can reduce the level of turnover through the following measures: 1. Improving the organization of labor and production 2. Reducing monotonous, low-skilled work 3. Improving working conditions, eliminating the discrepancy between the content of labor in the workplace, qualifications, individual abilities and interests of workers, 4. Organization of professional advancement personnel and a developed system of advanced training 5. Improvement of housing and other living conditions 6. Improvement of remuneration and labor incentives 7. Special measures for the adaptation of young workers.

Evaluation of the activities of the personnel component of the organization’s activities will be incomplete without assessing the quality of work of personnel services employees according to the following indicators: – fulfillment of obligations for the selection of the number of employees provided for by the organization’s staffing table; – fulfillment of obligations to provide the organization with managers, specialists and workers of the required professions, specialties and qualifications; – the number of cases of violations of the established procedure for processing personnel documentation (contracts, pension files, work books, certificates, reports, etc.); – the degree of provision of a full-fledged reserve for promotion to positions of managers and specialists; – timeliness and high quality of registration of the established reporting; – the number of cases of violation of labor discipline by personnel officers, including failure to fulfill their duties, misuse of rights; – the number of cases of violation of the schedule for checking and analyzing compliance with labor discipline by employees; – the degree of implementation of the program for the formation of the organization’s need for specialists, taking into account the prospects for its activities, the training and advanced training programs for the organization’s employees; – the degree of cooperation between the departments of the organization with the personnel service; – the effectiveness of proposals for the implementation of personnel policy.

3.5 Evaluation of the effectiveness of projects to improve the PM

Evaluating the effectiveness of a project to improve personnel management methods requires determining the economic and social consequences of their implementation. When evaluating the effectiveness of management, one should proceed from the goals set for the management system and the results of production. It is necessary to judge the effectiveness of management not only by the effectiveness of the management system, but also by the efficiency of the production system of the manufacturing organization and the organization operating (using) the product or service. Therefore, the economic effect from the implementation of the project to improve the management of the organization is formed in the field of management, in the field of production and in the field of operation of products (services). When evaluating the economic efficiency of a project to improve the system and technology of personnel management (making a decision on the economic feasibility of the project, choosing the best option), the following generalizing indicators can be used: 1. Net present value (NPV), or integral economic effect (Eint), is defined as the sum of current economic effects for the entire period, reduced to the initial step (initial year of the billing period) or as an excess of integral economic results over integral costs.) Its value is calculated by the formula: P – economic results of the implementation of measures for the billing period, rub.; K is the cost of implementing measures for the billing period, rubles; tn – initial step (initial year of the billing period); tk is the final step (the final year of the billing period); Рt — economic results achieved at the 1st step (in the 1st year of the billing period), rub.; Kt – costs incurred at the 1st step (in the 1st year of the billing period), rubles; аt — discount factor (coefficient of reduction of multi-temporal costs and economic results to the calculation year). The integral economic effect from improving the system and technology of personnel management consists of three components, so the formula for calculating Eint can be written as: Ey1 – economic effect in the field of management; Ey2 – economic effect in the sphere of production; Ey3 – economic effect in the field of product operation; – pre-production costs in the 1st year of the billing period. In practice, a modified formula for determining NPV is sometimes used: Kt – costs at the t-th step, provided that they do not include capital investments, rubles; Kvl – the amount of discounted capital investments, rub. Kvl – capital investments at the t-th step (in the th year of the billing period), rub. If the NPV is positive, the project is economically viable and may be considered for acceptance. The higher the NPV, the more efficient the project. 2. The index of return (IR) is the ratio of the amount of reduced income to the value of capital investments and is calculated according to the following formula: 3. The internal rate of return (IRR) is the discount rate (Esh1) at which the value of the reduced economic effects is equal to capital investments. Yevn is a solution to the equation: the IRR of the project is determined by calculation and compared with the investor’s required rate of return on invested capital. In the case when the IRR is equal to or greater than the rate of return required by the investor, the implementation of the project is justified. 4. Payback period (Current) – the minimum time interval (from the beginning of the project), beyond which the integral economic effect becomes positive and then remains non-negative. The payback period is determined based on the condition: 5. Return on investment (Rn), taking into account the interests of the participants or the specifics of the project, defined as The social effectiveness of the proposed measures to improve the methods of personnel management, first of all, manifests itself in the form of the possibility of achieving positive, as well as avoiding negative moments. Among the positive aspects of the implementation of the proposed activities include the following: – providing the personnel of the enterprise with an adequate standard of living (favorable working conditions, decent wages, necessary social protection at the enterprise level); – implementation and development of individual abilities of employees of the enterprise; – favorable socio-psychological climate (opportunities for communication, awareness, relative conflict-free relations with management and colleagues); – decrease in the level of staff turnover The negative aspects include: – damage caused to the health of personnel by adverse working conditions (NS, prof. Diseases) – Damage to the individual (intellectual or physical overload, stressful situations, etc.) Social consequences of projects for improvement of the PM system can be formed and evaluated outside the organization (Favorable image of the company, creation of new jobs, ensuring stable employment, ensuring security, etc.) There is a certain relationship between economic and social efficiency, since on the one hand social efficiency in the form of incentives , can only be ensured when the existence of the organization is secure and it makes a profit to provide incentives , on the other hand, economic efficiency can only be achieved if employees put their workforce at the disposal of the organization, which they are usually only willing to do P ri the presence of a certain level of social efficiency. In a comprehensive assessment of the social and economic efficiency of projects to improve the PM system, the following approaches are possible: economic efficiency is considered as the main indicator, and social efficiency is considered as a limitation (i.e., only those projects that provide for social measures are accepted) An integral generalizing indicator of economic and social efficiency, but due to the frequent qualitative incompatibility of goals, such a calculation is conditional. First, solutions are developed and considered from the standpoint of social goals, regardless of economic ones, and then economically efficient ones are determined among the selected socially effective options. Questions for self-control: Expand the features of determining the economic effect in the field of personnel management. What social results of improving personnel management do you know? Describe the relationship between economic and social efficiency of personnel management improvement. Conclusion Considering the issue of assessing the effectiveness of personnel management, it should be noted that in recent years, work on this topic has been carried out both by scientific organizations and individual scientists. To work efficiently means to achieve great results with less labor, time, and money. And in order to judge how effective the personnel management system is, it is necessary to develop an assessment methodology that allows you to determine the actual situation in the organization in the field of personnel management, identify weaknesses and give recommendations for improving it. To judge how effective this or that personnel management system is, naturally, criteria are needed to make such an assessment. Their choice depends on what to take as a starting point: the activities of a particular leader, the performance of the team, or the characteristics of the performers. There are two main concepts that form the basis for assessing the effectiveness of personnel management. According to the first of them, the effectiveness of personnel management is assessed based on the organic unity of management and production, but the contribution of personnel management itself to production efficiency is not determined. The second concept focuses on determining the contribution of personnel management to production efficiency. Quantifying this contribution is an extremely difficult task, as even the corresponding reporting indicators do not yet exist. Therefore, most methods for assessing the effectiveness of personnel management adhere to the first approach. At the same time, it seems appropriate to evaluate not so much the contribution of personnel management to production efficiency as its qualitative impact on this efficiency. The integral indicator is transformed into many others at lower levels, showing the effectiveness of individual systems or subsystems of personnel management – selection, training, etc.

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