What are the reasons for lack of HR Department's ability to prove its impact on organization performance ?

Hi, Rashid.

I think it's not a problem of HR department but of the whole company's management system. Every activity in the organization may and must be measured in this way or another. And HRs are no different. You can check some popular KPIs for HRs on http://kpilibrary.com/

Interesting question:

as HR Business consultant and manager HR I have guide several HR Teams on their road to success.

HR should organize their own HR services and define their service levels. You can not explain to managers why operational issues are delayed or not on time. 

Define your quality standard and use checklists and audit matrices  for 100% quality of HR data, files, and your HR output. This effort is very important and asks teamwork and commitment , and without that HR does not make impact as managers and employees want no mistakes in pay slips, sick leave reports, leave balance calculations or mistakes in HR letters with wrong job titles or salary scale.

Invest in the strategic and operational work relations within  your HR account. Act as a business partner and be pro active and visible instead of running HR behind your desk and computer. 

Do know what is going on and anticipate with proper advice and coordination.

but moreover: HR is people management  so make do your work with compassionate and humor. With this you build a positive work culture so managers and employees do like to come back to HR. So you are able to make your circle of influence bigger, and your impact.

good luck all of you,

Bart

An important role of strategic HRM is about focusing the management in employees as a tool to gain competitive advantage. Then the performance outcomes of HRM my be classified as follows:

1. HR –related outcomes, such as: turnover rate, absenteeism, job satisfaction and commitment.
2. Organizational outcomes, such as: productivity, quality, service, efficiencies and customer satisfaction.
3. Financial accounting outcomes, such as: profits, sales, return on assets and return on investment.
4. Capital market outcomes, such as: market share, stock price and growth.

Now, organizations are made aware that successful HR policies and practices of appropriate can increase performance in various areas such as productivity, quality, service, efficiencies and customer satisfaction.

On the other hand performance management is a planned process in which key elements are different measurement. Measurement of the results or performance achieved in comparison with the expected objectives.  HRM inputs are the knowledge, skills and behavior necessary to produce the expected results.

How to evaluate the degree to which the expected levels of performance are achieved through effective use of knowledge and skills, appropriate behavior?

Unfortunately, in many developing countries, many organizations do not recognize the performance outcomes of HRM.

The question is how to measure the intangible outputs of HRM?

What are the tools for measuring non-financial HRM outputs? Such as efficiency, productivity, job satisfaction and commitment?