Balance Scorecard and its metrics
The Balanced Scorecard is a framework that helps organizations translate strategy into operational objectives that drive both behavior and performance. The balanced scorecard is essentially a framework that attempts to collate measures across four areas: financial, internal process, customer and (people) learning, and growth rather than just the traditional financial measures (hence the term ‘balanced’).Construct a set of relevant metrics that meet with the initial rationale for the HR scorecard design. The outcome of this should result in some form of draft for scorecard framework.
The most widely used HR metrics are typically concerned with employee attitudes, employee turnover, employee skill levels, as well as outsourcing costs, service center operations, the number HR transactions processed, staffing process, training programs utilization and effectiveness, and promotions. These measurements are employed by 25 to 75% of all business organizations. Following are details of the popular metrics and the performance indicators. Each metric contains 2 to 5 performance indicators. For instance, “employee attitudes” metric includes the following indicators: Job Contentment (the percentage of employees satisfied with their job), and Manager Contentment (the percentage of employees satisfied with their manager). “Employee turnover” metric generally include such indicators, as Cost per Hire (calculation of advertising, agency fees, employee referrals, relocation, recruiter pay and benefits costs and the number of hires), Turnover Cost (calculation of termination, new hire, vacancy and learning curve costs), Turnover Rate (rate of the employees leaving an
organization), Time to Fill (the period from job requisition approval to new hire start date), Length of Employment (this indicator considers the job title, department, etc.). “Recruiting” metric includes Vacant Period (number of overall days the positions were vacant), New Hires Performance Appraisal (average performance appraisal of new hires, compared to previous period), Manager Satisfaction (according to the survey of hiring managers, compared to previous period), Turnover Rates of New Hires (during a specified period), Financial Impact of Bad Hire (according to turnover cost and cost per hire). “Retention” metric includes Overall Employee Turnover, especially in the key positions, Preventable Turnover (this indicator considers the reasons the employee left the organizations and what measures may be taken to prevent it), Diversity Turnover (turnover rate in professional, managerial, and technical positions), Financial Impact of Employee Turnover. “Training and Development” metric includes Learning and Growth Opportunities (percentage of employees who are satisfied with the learning and growth opportunities in the organization), On-the-job learning Contentment (percentage of employees who are satisfied with on-the-job learning, project assignments for growth and development, and job rotations), Opportunities for New Hires (percentage of employees who report training opportunities among the top three reasons they accepted the job). Although most organizations use similar set of HR measurements, however, even common metrics don't always include standard components. For instance, a common “cost per hire” metric may contain different expense categories, such as advertising, online services, background checks and recruiter costs. Recruiting and staffing metrics may also comprise various aspects. For instance, organizations usually measure “college recruiting” by analyzing the source of organization newcomers and their progress at the workplace.
HR measurements have significant implications for all areas of the business performance. For instance, employee attitudes and turnover metrics are reported to have key influence on decision making in the organization. The scorecard is an organic design – one that changes with the...
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