Financial literacy deals with an employee’s understanding of the way a business is run which gives him a deeper insight into the financial parameters of a company. Organizations nowadays are investing a lot of time in building the financial literacy of their employees, so that they can have a clearer idea and an overall context within which they can expect to bring changes to the working environment.
This thought-process brings a much-needed change in the approach to work and reflects on the quality and volume of output. Managers now understand the need to provide their team members an accurate information about financial reports and results. Without transparency on these levels, employees start being suspicious which impacts their performance negatively.
Depending on which department a particular employee is from, he will gauge his own performance on some important matrices. For someone into the Business Operations side of an organization, he will have to keep a record of performances based on −
● Sales Data − How much volume has been sold to the market
● Customer loyalty and retention − Customers who value the brands
● Productivity − Volume of output and number of targets met
● Gross Margin − A record of the company's monthly profit and loss
● Overhead − Constant recurring expenses
● Variable Costs − New partners, acquisitions, benefits, medical insurances
● Inventory − The amount of stock the company has
● Hours Worked/Process − Hours the employees producing the output
For someone into Talent Acquisition and HR policy-making, it’s imperative that he understands the way the people getting recruited influence the working environment of the company. Most HRs gauge the performances of the employees hired in different processes on a monthly basis so that they can calculate the performance incentives and other benefits accordingly. Some of the parameters that form an integral part of HR Metrics are as follows −
● Headcount − Number of employees
● Turnover − How productive the employees are
● Absences − Paid and unpaid costs to the company
● Employees Trained/Training Hours − Amount of time spent on training employees and expenses born on the training
● Employee Engagement − Frequent discussion with employees to understand their view of the company
● Customer Service/Satisfaction − The perception that a company has in public's mind
● Diversity − Getting people from different backgrounds to the workforce
● Performance Management Scores − Keeping track of necessary parameters to optimize employee performance