The importance of HR measurement and metrics to HR's role as a strategic business partner - Thesis Example

This thesis describes measurement of the effects of human capital that has become a continual challenge for human resource professionals in various industries. Practices for human resource management are of paramount importance in enhancing the overall performance of firms. Based on previous findings, investments on human capital can bring about favorable returns, such as the increased employee skills, increased productivity and profitability, or enhanced stock market performance. Consequently, organizations have come to recognize that improvements in their human resources can strongly increase organizational efficiency despite increasing competition, business operations and need for cost effective environments.

In addition, there has been considerable pressure on the HR function to evaluate and measure its role and contribution in increasing competitive advantage for organizations. In particular, organizational changes, increased accountability, increased productivity, implementation of HR strategies, increasing application of human resource information systems, and growing reliance on the interaction between managers and HR. Consequently, previous studies have looked into the different approaches that can be used for measuring HR contributions, hence the term ‘HR metrics’.

This study will then focus on the gas and electric utilities industry of the United States, particularly their use of HR metrics and its impact on their performance. Gas and Electric Utilities Industry in the U.S. The electric utility industry in the country is considerable in size. According to the International Energy Agency, it may be likely that demand for electricity will double in the next 25 years. Consequently, large investments in equipment and services that transmit electricity to residential homes and workplaces can be expected as well.

As a response to the financial crisis in 2008, the US government had allocated $11 billion to develop the smart grid infrastructure that will enable electricity transmission from long distances as well as increase the energy use efficiency. What has been referred to as electric utilities at present have been associated with companies that generate, transmit, distribute, and conduct billing. Historically, due to the natural monopoly, such electric utilities may either be strictly regulated or public owned.

In the past decade, generation of electricity has been separated from its transmission and distribution for companies to create wholesale power markets with which electric utilities obtain energy from their competing generators. In addition, natural gas utilities in the United States have been serving over 70 million customers in the country that is provided by means of underground delivery systems that run for over 2 million miles (AGA, 2011). Residential customers, electric power plants, and establishments that mainly utilize gas for commercial purposes, such as restaurants, account for majority of the consumers.

In terms of employment and working conditions, numerous utility workers typically experience night and weekend shifts with which a number of these employees may work overtime to assist peaks in demand as well as repair the damages caused by accidents, natural disasters, and other occurrences. The working environment of the electric and gas utilities industry has also been associated with hazardous operations and materials, hence the continual need for their employees to undergo adequate and formal training (Bureau of Labor Statistics, 2011).

Despite the efforts of the utilities industry to increase profitability and enhance worker productivity, however, a number of challenges are still being faced by the electric and gas utilities firms, such as the need for sustainability, security of supply, a more complex combination of energy technologies and resources, as well as access to lucrative opportunities (MCE, 2011). It