By Nicholas Higgins who can be contacted at www.watsonwyatt.com/europe/
There is increasing interest in measuring HR and initial efforts have made use of a HR scorecard to provide a framework within which to measure. However, experience of HR scorecard implementation has been mixed. In this article we provide insights into the reasons why, and outline several key steps that must be undertaken for HR measurement to be effective.
Traditionally, HR functions have struggled with appropriate and meaningful measures to quantify their value, or that of the people engaged within the business. The emergence of the HR scorecard concept has tried to address this point, taking its core design from the established balanced scorecard measurement framework applied in businesses. In short, 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’).
2. How to approach a HR scorecard
Rather than immediately compiling a list of HR measurables that are easy to quantify, it is worth taking a step back and thinking through a checklist of points to address.
A. UNDERSTANDING THE REASON FOR IMPLEMENTING THE HR SCORECARD
First of all, one needs to understand the reason for developing a scorecard. For example, does a wider corporate scorecard necessitate this implementation be spun-off? Or the requirement of operating metrics on a newly established HR shared service centre? Is it a means of prioritising and reporting an existing collection of HR metrics? Or, a result of the new ERP software providing a range of HR analytics?
Asking these questions focuses on the type of measures required, from basic data to operating efficiency measures through to corporate... [continues]
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