The effectiveness of the Human Resources Department may be judged by the following:
- Compliance: HR is responsible for organizational compliance with labour / work-oriented laws. Savings are achieved in legal costs, fines and damaging publicity/goodwill.
- Client Satisfaction: Both external and internal clients dealing with HR can and should have their satisfaction assessed.
- Culture Management: The truly effective organizations monitor and attempt to create/influence their culture in order to create employee attitudes resulting in increased motivation and productivity.
- Cost control : In organizations where employees are viewed mainly as an expense, HR must cut costs by reducing labour. Other cost control strategies include reducing absenteeism, employee turnover, smoking and other costly employee behaviours.
- Contribution : Research shows certain high performance HR practices do have a positive effect on employee performance by increasing knowledge, skills, and abilities, improving motivation, reducing shirking of responsibilities, and increasing retention of competent employees. These in turn will impact overall organizational effectiveness.