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What is an HR Scorecard and how is it implemented?

Question:

What is a HR scorecard, and how is it implemented?

Answer:

The HR scorecard is a method for Human Resources to position itself as a strategic planning partner with line managers and executives within an organization. A detailed and excellent book on this topic is The HR Scorecard, by Becker, Huselid, and Ulrich. This book is available on either Amazon.com or the Society for Human Resource Management‘s web site.

The premise for an HR scorecard is that HR can and should develop metrics to demonstrate how HR activities impact profitability. The process we recommend is:

  1. Identify the critical deliverables for Human Resources.
  2. Identify HR’s customers (for the deliverables).
  3. Define HR activities that provide the critical deliverables (such as high-talent staffing or a retention initiative).
  4. Conduct a cost-benefit analyses of activities that provide deliverables.

Lastly, it’s important to ask the right questions to determine if HR is providing the appropriate deliverables. Examples of these questions are:

  1. How many exceptional candidates do we recruit and retain for each strategic job opening?
  2. How many hours of results-oriented training do new employees receive annually?
  3. What is the differential in merit pay between high-performers and low-performers?

In many organizations HR still struggles to find a place at the leadership table. By thinking strategically and relying on proven business practices and tools HR can show value and become a partner with the leadership team. Strategic HR, inc. knows how difficult it can be to integrate HR practices with the overall business strategy. Let us assist you with your strategic initiatives – visit our HR Strategy page to learn more.