3 INTRODUCTIONNew economic paradigm characterized by Speed, innovation, quality and customer satisfactionEssence of competitive advantage shifted from tangible to intangible assetsFocus on human capital and its effective alignment with overall organizational strategyHR Scorecard measurement/ evaluation system for redefining the role of HR as a strategic partnerBased on Balanced scorecard developed by Kaplan and NortonHR transformed from administrative to strategic roleChallenge for managers to make HR a strategic assetHR scorecard is a lever that enables managers to do so
5 WHY TRACK HR EFFECTIVENESS? To Guide Decision MakingIt helps HR staff in how best to manage the HR system to support the company.To Evaluate Program/Department EffectivenessIt constitutes a “report card” to guide improvement efforts.
6 EFFECTIVE HR MEASURESIdentify a clear, consistent, and compelling connection between the company’s strategy and the work of each employee.Focus on the critical few measures that have the greatest impact on the company’s bottom line.Document the effects of HR on company performance in credible ways that employees, line supervisors, and managers can understand.
7 Kaplan and Norton model (1996) BALANCED SCORECARDKaplan and Norton model (1996)Customer perspectiveCorrective activityDevelopmental activityBalancing compliance with added valueBalancedScorecardFinancial MeasuresKey performance ratiosFinancial healthBalancing leading with trailing indicatorsLearning and growthPeople measuresKnowledge measuresBalancing soft andhard indicatorsBusiness ProcessesDrumbeatTime, cost, qualityBalancing inputs and outputsHR FunctionFits Here asHR Deliverables
8 HR DELIVERABLES HR Performance Drivers HR Enablers Determines the resultsUnique to the firmIdentification and direct integration into performance criteria e.g employee productivityHR EnablersReinforce the core performance driversStrategy implementation impossible without properly aligned enablersFor employee productivity enabler could be training
9 LAGGING INDICATORSLagging indicators are outcome measures that help you gauge your HR progress by examining the final end result or outcomes of your collective efforts.Use of the “lagging” term reflects the delay or gap between your actions and a change in the final end result.Non-HR ExampleEconomy — GNP growth, national debt, unemployment rate, etc.HR ExamplesEmployee retention.Employee performance.Employee productivity.
10 LEADING INDICATORSLeading indicators are process measures that help you gauge incremental progress you are making toward key HR outcome (lagging) measures.Since leading indicators measure the results from your processes, there is less of a delay between your actions and a change in the system.They are the performance drivers — the key factors that enable the overall end result (outcome) you want to achieve.Non-HR ExamplesEconomy — capital equipment purchases, layoffs, stock market value, public confidence, exchange rates, etc.HR ExamplesA reduction in absenteeism in key positions.% increase in internal people expressing interest in position
11 HR SCORECARDMeasures effectiveness and efficiency of HR functions in producing the employees behaviors required to achieve organizational strategic aimsFocuses on leading indicatorsIdentifies the differences between HR doables and HR deliverablesDemonstrates HR’s contribution to strategy implementation and to the company’s bottom lineHelps HR managers focus on and manage their strategic responsibilitiesEncourages HR flexibility and change.
12 The 10-Step HR Scorecard Process CREATING HR SCORECARD12345Outline value chain activitiesDefine the business strategyOutline a strategy mapIdentify strategically required outcomesIdentify required workforce competencies and behaviors678910Create HR ScorecardIdentify required HR policies and activitiesChoose HR Scorecard measuresSummarize Scorecard measures on digital dashboardMonitor, predict, evaluateThe 10-Step HR Scorecard Process
13 OUT LINE VALUE CHAIN AND STRATEGY MAP Value chain analysisA tool for identifying, isolating, visualizing, and analyzing the firm’s most important activities and strategic costsIdentifying the primary and crucial activities that create value for customers and the related support activitiesStrategy MapA diagram that summarizes the chain of major inter related activities that contributes to a company's success
17 NOT CLEAR WHAT TO ADD HERE NEED YOUR INPUT CREATE HR SCORECARDNOT CLEAR WHAT TO ADD HERE NEED YOUR INPUT
18 HR SCORECARD MEASURESReview existing measures and identify their strengths and weaknessesIdentify corporate goals and HR’s contribution toward these goalsCreate a customer diagram and list of results HR produces to support the organizationDefine measures for each resultDefine levels of goals for each measureDefine two tracking reports to communicate actual vs. planned performance.
19 HR DASHBOARD“A picture is worth a thousand words” sums up the purpose of HR Dashboard.An HR Dashboard presents the manager, via a PC desktop screen containing graphs and charts , with a bird’s eye view of how the HR management function is doingSummarizes how core measures from HR scorecard are doing
20 SUMMARIZING MEASURES ON DASHBOARD Overall Job SatisfactionQWL ScoreCore Values
21 CONCLUSIONHR Scorecard Enables Managers to Understand how to Align HR Strategy with Overall Business ObjectivesTracking and Performance Evaluation Of Business StrategiesHR Scorecard a Tool to Ensure Continued Learning and Change Management