HR SCORECARD

Many companies are using Balance Scorecard metrics to evaluate performance of their

HR department by key performance factors 12 HR Scorecard: It is a tool for measuring the

contribution of human resource management practices to the financial performance of an

organization.13 In the past, HR managers lacked the required amounts of knowledge about the

business side and general managers did not fully appreciate the HR side.14 Human Resources

(HR) is normally the function which helps other parts of the organization create measurement

and performance management systems for their operations 15 To integrate HR into a business

performance measurement system, managers must identify the points of intersection between

the HR and the organization’s strategy implementation plan High HR scores in the face of low

finances actually signal improved finances in the future. 16 HR scorecard measures the HR

function's effectiveness and efficiency in producing employee behaviors needed to achieve the

company's strategic goals. 17

ABSTRACT

In today’s competitive world the economy is transforming from protectionism to highly

market driven competitive environment. It is advisable to the corporate entities that it should

be a market focused. As a part of HR strategy the companies should concentrate on new

markets and look for additional service provider. Previously, HR managers lacked the required

amount of knowledge and tactful skill about the business side. But today things have changed

where the companies compete on various aspects such as price, technology, product and

service provider. At this juncture, the HR scorecard will help in measuring as well as

evaluating a company’s performance in terms of HR. Most of the businessmen consider that

employees in their organizations are the key indicator of their competitive advantage need to

manage effectively the employee talent has become a crucial part in today’s world. The study

is based on library research or referencing method

The HR Balanced Scorecard provides the means to monitor workforce indicators,

analyze workforce statistics, diagnose workforce issues, calculate the negative financial

impact, prescribe solutions, and track improvements. The HR scorecard is of much important

when it comes to measuring just how effective the HR department of a certain company is.

While understanding the purposes or reasons for developing an HR scorecard, also weigh all

the details involved in the entire business particularly those that the Human Resource handles.

HR scorecard enables managers and executives to see and track the important HR measures

across their company. An HR scorecard is the same scorecard system that accounting,

inventory, and logistics departments use. The HR scorecard helps HR professionals to find the

optimal solution for their company.

------------------------------------------------------------------------------------------------------------------

HR SCORECARD

Previously HR Performance measurement had focused solely on improvement of

administrative and transactional efficiency. Here the focus was increased and also included

new processes for the HR organization to develop such as best in class service delivery and

increased employee value and ensuring a focus on cost and value. HR scorecard helps HR

professionals effectively to manage their strategic responsibilities: The scorecard encourages

HR managers to focus on exactly how their decisions affect the successful implementation of

the firm's strategy. The HR scorecard focuses on the firm's strategy implementation, which

constantly demands change. There is an ever-increasing challenge for HR executives to have

the ability to define and measure their HR division much like the other divisions are measured;

with the measurable goals, metrics, and tools. As an important tool in human resources

management, an HR scorecard enables managers and executives to see and track important HR

measures across their company. While human resources often track HR metrics, it is important

to share and distribute the relevant information to other executives and managers in a secure,

real-time environment.

As companies expand its operations and grows larger and larger, managing worthful

employees is a big task. A company should set up a human resources department which is the

best solution for establishing the assignments. With the large number of employees and

improve the measuring activities they need a better system. This is where the human resource

scorecard comes into the scene. The only thing that makes the HR scorecard different from the

logistics, inventory or accounting ones is the fact that it is more focused on the measurement of

the activities of the HR department. With its help, the managers are able to effectively organize

the company’s objectives. By doing this the company will be maintained at a stable and active

level.

For example setting a scorecard to increase productivity through trainings is the

objective. The scorecards patters should be relevant to the functions, value points and

contributions of each employee. Whether in a small or large company, managing employees is

a no ordinary job. The human resources department is one of the many sections that a business

organization should come up. The Department is one of the important area for establishing

duties and responsibilities necessary for evaluating work performance. HR personnel handle

transactions on a daily basis. And as the company grows, the company will need a more robust

system to better improve its measuring activities. This includes the use of human resource

scorecard. With the aid of this scorecard system, the management is also able to organize

objectives effectively and clearly, which is necessary in maintaining an active and stable

company. In short, the HR scorecard system reduces the hassles in quantifying the worth of the

company and its strategic workforce. Setting up the scorecard system, however, takes time and

many considerations. Score card helps in identification of potential Milestone or metrics.. This

will help if the HR department for installing an HR scorecard system. HR managers should

carefully research on the status of the workforce. They should see if the current volume of

employees is sufficient to stabilize the growth of the organization. Unless there are other ways

to know whether ten computer programmers are enough in the IT department, HR managers

should identify the relevance of each employee. The HR scorecard is of much importance

when it comes to measuring just how effective the HR department of a certain company is.

While understanding the purposes or reasons for developing an HR scorecard, also weigh all

the details involved in the entire business particularly those that the Human Resource handles.

REVIEW OF LITERATURE

Since the topic HR Scorecard is of recent origin, not many studies were found.

According to Becker, Huselid & Ulrich (2001) measuring of intangible assets accurately will

determine the value of human capital. It has indicated that the accounting practices used are

specifically meant for measuring financial and physical assets only and which is considered as

competitive advantage. The concept of HR Scorecard was firstly developed by Becker (2001)

from the Balanced Scorecard which was originally developed by Kaplan and Norton. Walker

& MacDonald, (2001)

NEED AND IMPORTANCE

To develop the HR Scorecard the very first thing is that an organization has

to focus on HR Department. Finding the employee talent, invest in

employee’s development i.e growth opportunity, creating an environment

that fosters employee engagement and to identity the key talent for growth

and development, rewarding and retaining the competent people,

upgrading of Technology, recruiting the high potential people, linking

employee to productivity etc. these all are required for the successfully

implementing HR scorecard.

The following are the four perspective of HR SCORE CARD:

SOURCE:

HR Scorecard which can be classified into four perspectives:

a. STRATEGIC PERSPECTIVE

This perspective measures company success in achieving 5 strategic

thrusts (talent, leadership, customer service and support, organizational

integration, and Human Resource Capability)

b. OPERATIONS PERSPECTIVE

FinancialStrategic Perspective Perspective CustomerOperations PerspectivePerspective

Customer Perspective Operations

Perspective

This perspective measures Human Resource success in operational

excellence. The focus here is primarily in three areas: staffing, technology,

and Human Resource processes and transactions

c. CUSTOMER PERSPECTIVE

This perspective measures how Human Resource is viewed by company

key customer segment. Survey results are used to track customer

perception of service as well as assessing overall employee engagement,

competitive capability, and links to productivity.

d. FINANCIAL PERSPECTIVE

This perspective measures how Human Resource adds measurable

financial value to the organization, including measures of ROI in training,

technology, staffing, risk management, and cost of service delivery. Many

leading organizations use their performance management systems as a key

tool for aligning institutional, unit, and employee performance; achieving

results; accelerating change; managing the organization on a day-to-day

basis; and facilitating communication throughout the year so that

discussion about individual and organizational performance are integrated

and ongoing.

STRATEGIC PERSPECTIVE

. The engineering field still offers a promising career opportunity which can make a bachelor

lives well. Colleges and universities have long been important economic drivers in their

surrounding communities, and their potential impact on the wider, regional economy has been

growing dramatically. HR professionals must be business literate and customer savvy. The

colleges are highly focusing for the growth and its uplifement for this they are adopting various

strategies and policies for its development. Each and every college has its own goals and

objectives. They are striving a hard for reaching targets. Collaboration with professional bodies

such as IEEE, NHRD ISTE and so on. Almost all the engineering colleges of Warangal are in

frequent touch with the university. UGC funds to the fullest extent are been utilized by them.

Colleges are striving hard to achieve business goals. They are reaching the targets. Staffing,

technology, HR processes and transactions are taken care by them. Employee engagement,

competitive capability, and links to productivity.

CUSTOMER PERSPECTIVE

It is commonly viewed that the student as the customer. When engineers have a creative idea to

meet a challenge, research grants help support them in developing and testing their idea. The

colleges are known not only for its excellent academic training but also for its well-designed

leadership training programmes. They have several active collaborations with the professional

bodies. There is a lot of interaction with industry and institutions. Providing proper training to

the students through various institutions such as IMS, E-learning, etc. Colleges for the benefit

of students arranging guest lectures from the universities and also from the industry. Imminent

people are called to deliver the lectures. Also providing 24 hours lab facilities for the sake of

students and also sending them to participate in management activities. Weak students are

counseled by the competent counselors in the colleges. They are taken proper care by the

colleges in almost all the aspects wherever counseling is needed. Students’ satisfaction is taken

utmost care and also suggestion box is also maintained by the colleges, students can drop their

suggestions in that box. Providing sms facilities- a sms is send to the student if he doesn’t

come to college, so that absenteeism can be curtailed. Through sms he also gets the latest and

proper information well in advance so that he can prepare for the activities. Seminars &

Workshops Exhibitions are also conducting for the benefit of the students. Organizing different

workshops for different branches and the students also participate in workshops which are

conducted by other colleges also, so that there is an interaction with different students and also

sharing of ideas with them. More practical sessions are also been conducted to improve their

learning environment. As every college has a placement officer he takes care of students’

placement activities Even though there is no industries surrounding Warangal region still

colleges are having good rapport with industries. Frequently making arrangements for visits of

delegates/Prospective Employers from various industries, as they present their lectures and

impart knowledge to the students on recent trends in the market which are very useful.

FINANCIAL PERSPECTIVE

Colleges are spending lot of amount for the salaries of the staff, hiring competent people to

perform the task. Colleges for growth and uplifement are investing for the purchase of

infrastructure, internet facilities, and digital library and subscribing magazines, national and

international journals and for students etc. Sending staff for paper presentations and

participation in workshop, seminars and also faculty development programmes and also

Industry interaction investing more on staff.

OPERATIONAL PERSPECTIVE

Taking adequate measures for maintaining health of both staff and students providing gym

facilities and encouraging sports (outdoor activities) measures. To reduce staff Turnover

colleges are providing incentives and training facilities and also retaining them. A better

support from Alumni can work wonders and they are striving hard and working towards

building better relations. Regarding the infrastructure they are far behind the NIT’s and IITs.

Endeavoring to be on par with these institutions.

CONCLUSION:

The more a company can integrate its HR Scorecard with existing and ongoing measurement

efforts, the more sustainable the Scorecard will be. one must make ongoing investments in the

HR Scorecard. The employer–employee relationship had changed; employees were less likely

to remain with a single employer; specialized talent is hard to find; employees expected more

work/life balance; and the diverse talent pool has different interests and needs. For successful

implementation HR Score card should be well communicated across the HR Department. High

turnover of employees results in lower productivity, higher training, and staffing and

occupational health costs and so on. HR professionals have to track and analyze turnover

statistics, find out the reasons for turnover, and other issues which affect the company’s

performance. The HR Scorecard has made HR managers understand how to align HR strategy

with the overall business objectives. HR Professionals are able to explain not only what they

are tracking but also how they are performing on essential strategies for the business.

REFERENCES: 1. Arthur K. Yeung; Measuring human resource effectiveness and impact; Human Resource

Management; Fall 1997, Vol. 36, No. 3, Pp. 299–301

2. Becker, B.A. Huselid, M. & Ulrich, D. (2001). The HR Scorecard: Linking People,

Strategy and Performance. Boston: Harvard Business School Publishing.

3. Dave Ulrich; Measuring human resources: An overview of practice and a prescription for

results; Human Resource Management, Fall 1997, Vol. 36, No. 3, Pp. 303–320

4. Garrett Walker and J. Randall MacDonald, “Designing and implementing an HR

Scorecard”, (2001), John Wiley & Sons, Inc.

5. Gary Dessler, Human Resource Management, Pearson Education, 10th Edition, 2005

6. Linking People, Strategy, and Performance by Brian E. Becker, Mark A. Huselid and Dave

Ulrich, Harvard Business School Press.

7. Richard E. Winter mantel, Karen L. Mattimore; In the changing world of human resources:

Matching measures to mission; Human Resource Management, Fall 1997, Vol. 36, No. 3.

8. Snell/Bowander, Human Resource Management, Cengage Learning India Private Limited,

New Delhi 2007

9. www.devseeker.in/content/career/Employers-VS-Staff/42.html

10. www.paulkearns.co.uk/downloading/NASA%20ballpoint%20pen.DOC

11. www.chandospublishing.com/Kearns.html

12. http://www.indianmba.com/Faculty_Column/FC1142/fc1142.html dated 12th Aug,

2011 time 10;38 Am

13. http://train-srv.manipalu.com/wpress/?p=141710 dated 12 August 2011 time 11.00

14. http://www.123eng.com/forum/f12/hr-scorecard-77479/ dated 12 August 2011 time 11.06

15. http://www.zigonperf.com/resources/pmnews/v1i20503.html dated 12 August 2011 11.16

16. http://www.farhansherazi.com/ppt/human%20resources%20scorecard.pdf dated 12 August

2011 11.22 am

17. http://www.answers.com/scorecard+hr+ dated 12 August 2011 11.24