5CO02 Evidence-based Practice (AC 3.1) and (AC 3.2)

It’s easy to throw around terms like “performance metrics” or “adding value,” but the real question is, what does that actually look like inside a company? When we talk about 5CO02 Evidence-based Practice (AC 3.1) and (AC 3.2), we’re looking at two things: how performance gets measured (both financial and non-financial), and how we show that people practices actually do something useful. Sounds pretty easy, yet it rarely feels that way in reality.

Take one manager’s experience. She once told us that tracking profitability was simple on paper, but explaining how the company’s coaching programme improved results? That was a whole different story. So we’re going to walk through that kind of thinking, two practical ways performance is tracked, one financial and one not, plus how people practices might add value, and how you’d ever prove that in the first place. Let’s not pretend these are clean-cut ideas.

Some things make sense logically, but when you try to measure them, the numbers don’t always line up as expected. But that’s the nature of evidence-based work. It’s sometimes awkward, but still necessary.

Scenario

Your manager has asked you to complete a briefing paper for her to give to a visiting team of people practice graduates who are particularly interested in how evidenced-based practice is used in the context of people practices. The content needs to give them critical insight into what evidence-based practice is and how it is relevant to people professionals. She has also asked you to include practical examples of the types of data analysis that people professionals use.

Briefing paper – part one

For part one, you need to provide the graduates with knowledge and understanding of what evidence-based practice is and identify approaches that can be taken for effective critical thinking and decision-making that ensures integrity and value is upheld.

You must ensure that you:

Appraise two different ways organisations measure financial and non-financial performance, providing one example of each. (AC 3.1)

Step 1: Understand What They’re Asking

Let’s strip the question down.

You’re being asked to:

• Explain two methods that companies use to measure how well they’re doing.
• One method should be about money (financial).
• The other should be about non-money stuff (non-financial).
• For each, you must give one real example, ideally something from the workplace or case study.

Think of this as:

“Tell me one way the business checks how much it’s making or spending. and one way it checks how well it’s performing in other areas.”

Step 2: Connect to the Case Study (Briefly)

Your manager wants this for a briefing paper. The audience? A team of visiting people practice graduates. They’re curious about evidence-based practice in HR.

So, you’re not writing for finance experts. You’re explaining this to HR learners, people like you. You’re working in a hotel group—Inter Luxe—800 hotels in 25 countries.

Think practically: what would people professionals in a hotel chain care about when looking at performance?

Step 3: Two Types of Performance Measures

Let’s choose one financial and one non-financial method that make sense in this setting.

A. Financial Performance Measure – Gross Profit Margin

Start simple.

Gross profit margin tells you how much profit a business keeps after paying for the basic cost of goods or services.

Why it matters:

• It shows how well a hotel controls its costs vs revenue.
• If margins shrink, you might be overspending on suppliers or underpricing services.

Real example in the case study setting:

In one Inter Luxe city hotel, the HR team noticed a drop in gross profit margin over six months. After digging deeper, they found that weekend staffing levels were too high during low occupancy periods. Working with operations, they adjusted rotas to match actual bookings. That saved costs and improved the margin by the next quarter.

Now you’ve shown the financial measure in action, in a real-life workplace issue with people practice input.

B. Non-Financial Performance Measure – Employee Turnover Rate

This tracks how often staff leave and need to be replaced.

Why it matters:

• High turnover = cost, instability, poor morale
• Low turnover = people stay, better service, stronger teams

Real example from the hotel chain:

In the coastal Inter Luxe hotels, seasonal staff turnover was 45% higher than in city branches. The HR team used exit interviews and internal surveys to gather data. Feedback showed that seasonal workers felt unsupported and lacked training. In response, HR introduced a two-day induction programme and a buddy system. Six months later, exit surveys showed improved satisfaction, and turnover fell by 18%.

This shows how non-financial data (turnover) revealed a people problem, and the team made a decision based on evidence, real feedback and tracking.

Step 4: What Does “Appraise” Mean Here?

It doesn’t mean just listing them.

You need to:

• Show how the measure works
• Say why it’s used
• Link it to what it helps the organisation understand
• Give an actual example (not just theory)

Think about what someone in HR would actually deal with day to day. Tips to Keep in Mind When Writing Your Answer

• Use clear labels: “Financial: Gross Profit Margin”, “Non-Financial: Turnover Rate”
• Stick to the point. No need to define everything unless it helps your point.
• Bring in the hotel case study. Mention either a city or coastal hotel example.
• Make sure your examples feel real. Like a real situation with people.
• Don’t sound too tidy. Maybe the margin didn’t improve straight away. Maybe some staff still left.
• Focus on how the data helped HR make a decision.

Small Recap You Can Use

Inter Luxe Hotel Group uses both financial and non-financial measures to monitor performance. Gross profit margin is tracked to assess operational cost control, especially in food and staffing. Turnover rate is used to understand staff retention challenges across the hotel locations. People teams work closely with operations to respond to the data, for example, by adjusting rotas or improving induction for seasonal workers.

One Last Thought for You

Ask yourself:

• Could you explain this to someone new in HR?
• Does each example feel like it actually happened in a hotel?
• Did you show how the data led to action?

That’s what the assessors want to see. Not long definitions. Just evidence, sense-making, and real work decisions.

AC 3.1 – Appraise two different ways organisations measure financial and non-financial performance, providing one example of each

People professionals are increasingly expected to understand how performance is measured, not just from a financial lens but also through human-related indicators. In organisations like Inter Luxe Hotel Group, both financial and non-financial measures help leaders make evidence-based decisions about staffing, service quality, and resource planning.

Here’s a closer look at two commonly used methods, one from each category, and how they apply in our context.

1. Financial Performance Measure: Gross Profit Margin

This measure shows the proportion of revenue left after subtracting direct costs. It matters because it gives a snapshot of how well the business controls its core expenses. In hotel operations, this might relate to room rates versus housekeeping and front desk staffing costs. When the margin shrinks, there’s usually pressure to review variable costs, staffing being a major one.

Example from Inter Luxe:

One of our city-based hotels noticed a decline in gross profit margin across three consecutive months. The People team was asked to support a review of staffing costs, particularly weekend shifts. It turned out the hotel was overstaffed on Sundays when business travel bookings were low. Adjustments were made to rota patterns, matching headcount more closely with forecasted bookings. After two months, profit margins recovered slightly, helping ease pressure from the finance team. The involvement of people professionals in reviewing staffing data was central to this recovery.

2. Non-Financial Performance Measure: Staff Turnover Rate

This is the percentage of staff leaving over a set time. While not financial in itself, turnover has deep financial consequences through recruitment costs, training needs, and service disruptions. In hospitality, high turnover is common, especially in coastal resorts that rely on seasonal staff. But measuring it lets HR teams identify patterns and act before it becomes a deeper issue.

Example from Inter Luxe:

In the coastal cluster, we were losing up to 50% of seasonal hires before the end of their contracts. Interviews revealed that many felt isolated and unsupported. The People team introduced a peer mentoring scheme where returning staff acted as informal buddies to newcomers. Over the next hiring cycle, turnover dropped to just under 30%. This reduced pressure on line managers and improved service consistency for guests. The change wasn’t costly, but the return was noticeable, better morale and better guest feedback.

In both examples, the measures pointed to underlying people issues. Whether profit margins or staff exits, data helped shape decisions that involved HR. Knowing what to measure, and what it really means, helps people professionals speak the same language as the rest of the business.

Explain how people practices add value in an organisation and identify two methods that might be used to measure the impact of people practices. (AC 3.2)

Step 1: Understand the Question First

There are two things you’re being asked to do:

1. Explain how people practices add value to a business.
2. Identify two methods for measuring the impact of those people practices.

Let’s slow that down.

“People practices” = everything HR does,  from hiring and training, to wellbeing, appraisals, policies, pay, inclusion efforts, etc.

“Add value” = make the organisation better, stronger, more capable, financially or not. That could mean:

• Saving money
• Improving morale
• Building skills
• Reducing risk
• Supporting retention
• Improving customer experience

But don’t generalise. Tie your points to real, specific changes or outcomes.

Step 2: Reconnect to the Case Study

You’re working in the People Function of Inter Luxe Hotel Group, a big international hotel brand.

You support 8 hotels, some in coastal resorts (mostly holidaymakers) and some in cities (more business guests and sightseers).

That mix matters. Because what adds value in one location might not work for the other. That gives you room to bring in varied examples.

Step 3: How Do People Practices Add Value?

Let’s name three practical ways first, then pick two that connect well to measurable outcomes.

A. Reducing staff turnover

If HR improves retention, the business saves money on recruitment, avoids service disruption, and builds stronger teams.

B. Improving service through training

If the team delivers better guest experiences, especially in hospitality, that leads to higher bookings and stronger reviews.

C. Supporting wellbeing

If HR supports staff wellbeing, especially in high-stress city hotels, there’s less absence, more focus, and better morale.

Step 4: Two Methods to Measure Impact of People Practices

Let’s link measurement methods to the value just discussed.

1. Staff Turnover Rate

This one measures how many employees leave during a period.

• If turnover drops after a change (say, better induction or training), that’s a clear sign HR’s work made a difference.
• You compare before and after numbers.

Example (case-based):

In one of the city hotels, staff turnover was at 35% for junior roles. HR introduced a new buddy system and clearer progression planning. Within six months, turnover dropped to 20%. That suggested people felt more supported and had reason to stay.

2. Customer Satisfaction Scores (e.g., guest review ratings)

Not strictly an HR metric, but it reflects people practice results indirectly. If your team improves training or wellbeing, service tends to improve. That often shows up in reviews.

Example (case-based):

After launching a customer service workshop for front desk staff in two coastal hotels, average guest review scores went up from 4.1 to 4.5 stars within three months.
Comments mentioned faster check-ins and friendlier responses. That gave HR data to back up the training value.

What the Assessors Want to See

You don’t need a long essay. Just clear thinking.

• Explain how HR adds real-world value, not just theory
• Pick two methods that can be clearly measured
• Use examples that feel grounded from the Inter Luxe context
• Show cause and effect: people practice → change → measured impact

Avoid overloading your answer. Keep the structure light but clear.

Sample Summary

People practices support organisational success by improving staff retention and service delivery. In Inter Luxe hotels, people teams introduced structured onboarding to reduce turnover, and guest-facing staff received new training focused on local culture and problem-solving.

To measure this impact, HR tracked turnover rates before and after the change and monitored guest review scores. Both showed improvement within months, linking the people initiatives to actual business results.

Ask Yourself Before Submitting

• Have you made a clear link between the HR activity and the outcome?
• Does each example feel like it happened in a real hotel?
• Could someone new in HR read it and get a clear idea of what was done and why?

That’s what the assessors are after.

AC 3.2 – Explain how people practices add value in an organisation and identify two methods that might be used to measure the impact of people practices

People practices aren’t just about policies and procedures, they influence everything from how teams feel to how customers experience a brand. In a service-driven business like Inter Luxe Hotel Group, the value of good people practices shows up in important ways. Let’s look at what “value” might mean here, and two ways to measure whether people practices are working.

How People Practices Add Value

The People Function adds value when it helps the business run more smoothly, retain skilled people, and deliver better customer experiences. Some examples from our work at Inter Luxe:

• Reduced turnover: Better inductions and clearer job expectations led to more seasonal workers completing their contracts.

• Improved guest experience: Front-facing staff who felt supported were more consistent, especially under pressure.

• Lower sickness absence: After introducing wellbeing check-ins, some properties saw fewer last-minute sick calls—particularly during high-stress events like large conferences or wedding bookings.

These aren’t just HR wins, they affect revenue, service ratings, and team stability.

Method 1: Measuring Impact with Turnover Rate

Turnover rate tells us how many employees leave, and how quickly we have to replace them. High turnover often signals weak onboarding, poor engagement, or unclear expectations.

Example:

In one of our city hotels, turnover among night staff was unusually high. After gathering feedback, the People team introduced a short training session specifically for night shifts, focusing on lone working, conflict management, and emergency protocols.

Three months later, turnover had dropped. Staff felt safer, managers spent less time recruiting, and the night operation ran more smoothly.

This gave the business confidence that targeted investment in people practices made a measurable difference.

Method 2: Measuring Guest Satisfaction Scores

While not an internal HR metric, guest feedback often reflects the success of people strategies. If guests comment on staff friendliness, speed of service, or helpfulness—that’s indirect feedback on recruitment, training, and wellbeing.

Example:

After updating induction content across coastal hotels, review platforms started to show more positive mentions of housekeeping and reception staff. Guests used words like “welcoming” and “quick to help.” These aren’t always captured in KPIs, but they’re tied to HR interventions.

Over time, that reputation helped secure repeat bookings and improve online ratings, which matter hugely in a competitive hotel market.

Not all people practice impacts show up straight away. Some build slowly. But when you track what changes, and who it affects, you start to see where people professionals add real organisational value. Measuring that might take a mix of HR data and customer signals. Either way, it’s about noticing the patterns, and acting on them.

FAQs

1. How do organisations usually track financial performance in a way that feels grounded?
Often it’s through simple tools like profit margins or revenue growth. But let’s be honest, even these aren’t perfect, context matters. A jump in profit doesn’t always mean long-term success.

2. Is measuring non-financial performance really that useful?
Some would argue it’s even more useful. Think about employee engagement or customer satisfaction, those numbers might not hit the balance sheet, but they say a lot about the future.

3. What’s one way HR can actually prove it’s making a difference?
One way is through retention rates. If people stick around longer after you change how you manage performance or wellbeing, it’s not random. Something’s working.

4. Can you really measure the impact of a people initiative accurately?
Sort of. It depends on what you’re measuring. Absence rates, engagement scores, yes. But does that prove value? Not always as cleanly as we’d like.

5. Is financial data more trustworthy than people metrics?
It feels more solid, maybe. But people data tells a different kind of story, slower, but not less important. You just have to accept the fuzziness.