(Solution) 5CO02 Camellia’s People Team could measure financial performance and one way that Camellia’s People Team could measure non-financial performance (AC 3.1)
Solution
Understanding Performance Measurement in HR
Performance measurement in people practice involves assessing how effectively HR activities contribute to organisational goals (CIPD, 2025c). In Camellia, the People Team is expected to demonstrate the value of its work in areas such as recruitment, onboarding, reward, and learning and development. This requires both financial and non-financial performance measures to provide a balanced view of organisational impact. CIPD highlights that effective people analytics should combine financial indicators with employee experience measures to fully evaluate HR contribution to business performance (CIPD, 2017).
Financial Performance Measure: Cost per Hire
One effective financial performance measure is cost per hire, which calculates the total cost of recruiting a new employee divided by the number of hires made (Oliver, 2025). This includes advertising costs, recruitment agency fees, assessment tools, interviewer time, and onboarding expenses. At Camellia, this measure can help the People Team assess whether recruitment processes are cost-efficient and whether changes in hiring strategy are reducing unnecessary expenditure.
The advantage of this measure is that it provides a clear, quantifiable indicator of financial efficiency. It also allows benchmarking across departments or time periods to identify cost trends. However, a limitation is that cost per hire does not reflect the quality of recruitment outcomes. A low-cost recruitment process may still result in poor-quality hires or high early turnover, which could increase long-term organisational costs.
Non-Financial Performance Measure: Employee Engagement
A suitable non-financial performance measure is employee engagement, which reflects how committed, motivated, and connected employees feel to the organisation(CIPD, 2024a). At Camellia, engagement can be measured through pulse surveys, feedback tools, and participation rates in organisational initiatives. This measure is particularly relevant because the People Team is already dealing with feedback challenges in areas such as onboarding, learning, and development.
The strength of engagement as a measure…..
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