Create HR Scorecard

By expanding on the strategy map, the manager then consolidates all this information in a visual and / or computerized HR scorecard. It highlights in a concise but comprehensive way, the causal links between the selected human resources activities, and the emergent employee behaviors and the resulting firm wide strategic outcomes and performance. The HR scorecard thus helps the human resource manager demonstrate how his or her team’s policies and practices contribute to the company’s strategic and financial success. Several consulting firms provide Web based services that make it easier to create HR Scorecards, based on metrics from best practice world class forms. Computerized Scorecard packages are available. Or, the HR Scorecard may be as simple as the strategy map from which the manager derived it.

Choose HR Scorecard Measures:

After choosing a handful of strategically required organizational outcomes, and employee competencies and behaviors and human resource policies and activities, the question is, how shall we measure them all? For example, if we decide to improve the disciplinary system, how precisely will the company measure such improvement? Perhaps in terms of number of grievances HR scorecards always contain balance of financial and non-financial goals or measures, of short term and long term goals and of external goals (for instance, what the customer thinks) and internal goals (for instance airplane turnaround time). For example, southwest might measure turnaround time in terms of improve turnaround time from an average of 30 minutes per plane to 26 minutes per plane this year. It might measure customer satisfaction with periodic surveys.

Measures like these serve two functions. First, they help the company assess the human resource team’s performance. (its morale up or down, for instance) Second, they thereby help the human resource manager build a measurable and persuasive business case for how human resources contribute to achieving the company’s strategic goals.

In one study, 86% of human resource professionals who respondent said they expected measurement of their function to increase over the next two years, 62% said they already used metrics to assess performance and 72% said they benchmark human resource activities particularly compensation and rewards, and equipment and retention and performance appraisal by comparing their results to other firms.

Summarize the scorecard measures in a digital dashboard:

The saying of a picture is worth a thousand words sums up the purpose of the digital dashboard. A digital dashboard presents the manager via a PC desktop screen containing graphs and charts with a bird’s eye view of how the human resources management function is doing. It summarizes how score measures from the HR scorecard are doing. For example, a manager’s dashboard for Southwest Air lines might display daily tends for activities such as fast turnaround, attracting and keeping customers on time flights and employees morale.

This gives the manager time take to corrective action. For example if ground crews are turning planes around slower today, financial results tomorrow may decline unless the manager takes action. Perhaps there’s a morale problem the HR manager should attend to.

Like automobile dashboards these digitals dashboards also usually present information so it grabs the manager’s attention, such as by a graph blinking red if turnaround time is trending down. For example, SAS software’s Strategic Performance Management package is a Web-based system that produces alerts that grab managers’ attention when performance is not meting targets.

Monitor, Predict, Evaluate: A great advantage of the HR scorecard process is that it is predictive. Financial goals such as budgets are better at telling managers how they’ve done than how they’ll do tomorrow. Monitoring a balanced set of scorecard measures can signal problems ahead. Thus, it might prompt a Southwest Airlines manger to say, our customer service ratings dipped, and since customer service leads to more customers and in turn to future revenues we should take corrective action now.

The human resource manager can’t assume that the scorecard measures and relationships will always stay the same. Perhaps reducing grievances is not having the results the manager predicted it would on raising morale. Perhaps the company must drop some employee behavior measures HR manager chose (such as number of grievances) are proving too hard to quantify. In any case, the HR manager should periodically re-evaluate measures and links.