Challenging Relationships: HR Metrics and Organizational Financial Performance

Abstract

The inherent relationship driving human resources decisions is the assumption that changing human resources headcount affects the financial performance of the jinn.  Many limitations and assumptions within this relationship should not   be overlooked This article integrates and critically analyzes academic research to explore what is known and what remains unknown in the relationship between HR metrics (e.g. headcount, salaries, recruitment) and organizational financial performance (e.g. revenue, costs, profit). Through the use of examples, seven main obstacles in the interpretation and use of academic research relating to HR metrics and organizational financial performance are discussed, including embedded recommendations.