hr balncd scorcard c

HR Balanced Scorecard

Implementing Metrics to Assess and Drive Business Performance

Deloitte Consulting LLP

August , 2005

For Discussion Purposes Only

Prepared by: Aman Gupta

HC OPP

Copyright © 2005 Deloitte Consulting LLP. All rights reserved. For discussion purposes only. 2

Contents

• Overview

• Developing the scorecard

• Balanced Scorecard Measures

• HR Metrics

• Examples / Selected Case Studies

• Appendix: Key HR Metrics


Balanced Scorecard: An Overview

HR metrics are becoming more complex as organizations seek to define the strategic value of human capital. While traditional HR measures such as turnover rates and time-to-fill often serve as benchmarks these days, the move toward more strategic measures calls into question whether benchmarks are even appropriate anymore.

One of the most basic challenges is the difficulty of measuring the value of intangible assets with any level of precision. About 80% of a company’s market value is said to be attributable to intangible assets, according to Robert Kaplan and David Norton, developers of the Balanced Scorecard methodology. As a result, the current structure of financial statements – most of which do little to present the details of intangible assets – renders them “increasingly irrelevant as a tool supporting meaningful decision-making,” said Dr. Junaid M. Shaikh in the Journal of American Academy of Business.


The balanced scorecard is a strategic management system used to drive performance and accountability throughout the organization

• The scorecard balances traditional performance measures with more forward-looking indicators in four key dimensions:

• Financial• Operational Excellence• Employees• Customers

• Benefits include:• Alignment of individual and

corporate objectives• Accountability throughout the

organization• Culture driven by performance• Support of shareholder value

creation


The strategy mapping methodology translates high level strategic vision into measures, and ensures alignment of objectives throughout the organization

World-class cost structures

Focused InnovationSimple and rewarding

experiences

Best return on information technology

(RoIT)

Corporate Objectives

Capture the XYZ market potential

Establish company as a

leader in technology X

Build direct business

capabilities

Protect Supplies Business

Bus Unit A Objectives

Financial Strategies

Customer Strategies

OperationalExcellenceStrategies

Sam

ple

Bu

s U

nit

A

Str

ate

gie

s

EmployeeStrategies

Improve brand performance

Attract the diversity, skills and

competencies we need

Maximize market share while meeting current year revenue

& profit commitments

Develop effective, sustainable

marketing programs

Develop new products / solutions

Sample Business Unit Balanced Scorecard

• Revenue / Total market

• Operating profit

•Marketing spend / Revenue•% increase in marketing reach

•Brand recognition rating•New product ramp rates•New product revenue/Total revenue

•Global diversity rating•Meeting employee retention plans

Sample “Bus Unit A” Strategy Map


Use consistent terms and definitions throughout the strategy mapping process for communication across Business Units and Functions

Objectives support the overall vision and provide areas of emphasis for the organization to focus its activities

Strategies break down the objectives into more actionable elements and in aggregate should represent the overall organizational focus

Measures are directly linked to strategies of the organization and should include all major performance drivers for each strategy.

Measures should be:• Timely, accurate, focused and relevant• Leading indicators of performance• Linked to controllable events• Cost effective to collect and compute• Easy to communicate broadly to the

organization

To monitor progress, targets are set for each measure in given time period. Targets should be based off the strategic planning financials and assumptions.


Strategy mapping produces strong bottom line benefits and provides organizational alignment and accountability

Benefits

Organizational Alignment

• Translates Corporate Objectives– Provides a forum for managers to agree on corporate strategies and measures while aligning organizational strategies.

• Communicates and links the strategy – Depicts the coordinated strategies throughout the organization

• Rigorous management tool - Strategic objectives are translated into performance scorecards that are used to manage the business and provide the standard for strategic feedback and review

Accountability

• Establishes criteria for successful performance – Influences behavior to focus on both the success of corporate strategy and direct line of influence

• Balances the financial and non-financial perspectives – establishes a rigorous business management system that goes beyond traditional financial measures to leading indicators of performance

84% of the companies that prepared a strategy map reported bottom-line benefits from the exercise while companies that "implemented" the Balanced Scorecard without strategy mapping reported no bottom-line benefits.

Source: The Balanced Scorecard Collaborative survey findings


The Basic Business Model

Strategic Choice

•Operational Excellence

•Product Leadership•Customer Intimacy

Customer SuccessWorkforce Success

Financial Success

Business Process Success

$$$

How will we grow? What strategic capabilities are necessary? How will we measure our progress?

HR Scorecard : An Overview

Source: The New Workforce Metrics: SHRM Thought Leaders Conference, Oct 2003 / Chicago, IL


Business Scorecard Workforce Scorecard

Customer Success Financial Success

Business ProcessSuccess Workforce

Success

HR Competencies HR Practices

HR Systems

• Align• Integrate• Differentiate

• Work Design• Perf. Measurement• Rewards • Selection• Development• Communication

• Strategic Partner• Cultural Change• Employee Advocacy• Administrative Expertise

• Mindset/Culture• Competencies• Behavior

HR SCORECARD

BUSINESS SCORECARD

WORKFORCE SCORECARD

A workforce th

at:

• Understands

• Able to do

• Does




The Strategic Capability Cascade - XYZ Corp.

Growth Strategy

Primary growth strategy Share of customer’s wallet New markets New products New markets and new products

Present Goal Strategic Capabilities/ Functions

What are we/or must be “best at” competitive advantage? Those 3-4 items we must do extraordinarily well to achieve our growth strategy

Strategic Capability 1___________________________ Strategic Capability 2___________________________ Strategic Capability 3___________________________ Strategic Capability 4___________________________

Present Goal

Identify “A” Positions Those jobs/titles inside a strategic capability that leverages our competitive advantage and cause our growth strategy to succeed; create wealth for firm; engage in core work; create value for customers.

Position Title 1________________________________ Position Title 2________________________________ Position Title 3________________________________

Identify “A” Players Individuals that have those jobs/titles in “A” positions that are among top 10% available in labor market for this position; top performers in our firm; highest potential in our firm; extremely difficult to replace; have many external, high-level opportunities?

Present Goal Position Title _______________________________A’s % % Position Title _______________________________B’s % % Position Title _______________________________C’s % %




Differentiation: Your Firm’s Workforce(s)

Professional Partners Strategic Capabilities

Contract Services Operational Partners

Low

U

niq

uen

ess o

f H

um

an

Cap

ital

Hig

h

Low Competitive Advantage Value of Human Capital High




The Strategic Diagnostic

Strategic Choice Strategic Capabilities “A” Positions “A” Players

Culture

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

•

Customer Success Financial Success

Business ProcessSuccess

Workforce Success

HR Competencies

HR Practices

HR Systems• Align• Integrate• Differentiate

• Work Design• Perf. Measurement• Rewards • Selection• Development• Communication

• Strategic Partner• Cultural Change• Employee Advocacy• Administrative Expertise

• Mindset/Culture• Competencies• Behavior

HR SCORECARD

BUSINESS SCORECARD

WORKFORCE SCORECARD

Understand . . .

Able to

. . .

Do . .

.




Contents

• Overview



• HR Metrics

• Examples/ Selected Case Studies



Balanced Scorecard Development Overview

InitiateBalanced Scorecard

Development Implementation

Provide templates and Balanced

Scorecard development instructions

Instruction sessions complete

Business Unit / Function Scorecards complete (including

targets).

Internal Strategic Planning

Submissions due

All Balanced Scorecards

finalized

Full Internal Strategic Planning

submission due for Business

Units / Functions

Final Internal Strategic Planning

submissions due for

Business Units / Functions

DevelopBalanced Scorecards including objectives,

strategies, measures and targets

Align and finalize

Balanced Scorecards


Process Overview

Business Unit/ Function Planners

Division Executives

Business Unit/ Function Executives

Division Planners

Identify Business Unit/ Function objectives

Review & Approve

Communicate horizontally and align objectives to other Business Unit/ Function

Communicate corporate/ Business Unit / Function direction to Division execs & planners

Identify Business Unit strategies, measures and targets, aligning to Corporate strategy map

Identify Division proposed objectives, strategies, measures and targets with input from sub-Divisions

Ensure alignment with Business Unit objectives

Review & approve

Business Unit and Division alignment

Approve finalized strategies, measures, targets

Review strategies, measures and targets

Finalize targets for measures


Corporate and Business Unit alignment

CorporateCommunicate corporate objectives

Communicate preliminary corporate strategies and measures

Revise and finalize corporate strategies, measures, targets

1 2 3 4 5


Detailed Process

Corporate level objectives

Strategic Planning informationInput

Business Unit/Function planners and managers

Deliverables

Owners


Identify strategies, measures, and targets aligning to Corporate strategy map

Communicate horizontally and align objectives to other Business Units / Function

Communicate Corporate/ Business Unit / Function direction to Division execs & planners

Identify Business Unit / Function level objectives

Aligned Corporate level and Business Unit objectives

Initiative Support

Conduct Kick-off meeting

Provide Templates and instructions

Business Unit/Function objectives


Business Unit/Function planners and managers

Business Unit/Function objectives communicated to all other Business Units and Functions

Identification of cross-Business Unit opportunities

Identification of potential strategies and measure to incorporate into Corporate level scorecard

Publish Corporate objectives and all Business Unit / Function objectives online

Conduct Community of Practice forums

Business Unit/ Function objectives


Business Unit/ Function planners and managers

Business Unit/Function objectives communicated to Divisions and sub-Divisions

Aligned Business Unit, Division, and sub-Division objectives

Publish all Business Unit / Function objectives online

Conduct community of Practice forums

Corporate level strategies and measures

Strategic planning financials and assumptions

Business Unit/Function and Division/sub-Division planners and managers

Business Unit/Function strategies, measures and targets

Division/sub-Division strategies, measures and targets

Aligned Corporate level and Business Unit/Function objectives, strategies, measures and targets

Provide templates and instructions

Conduct strategy mapping workshops

Conduct best practice forums

Business Unit/Function targets

Division/sub-Division targets

Corporate targets

Business Unit/Function and Division/sub-Division planners and managers

Finalized targets for each measure at the Business Unit/Function and Division level

Finalized Balanced Scorecards at Corporate, Business Unit, Function, and Division levels

Provide information on Corporate Scorecard targets

1 2 3 4 5


Objectives

Group Objectives Description RoIT

Simple, rewarding

experiencesWorld-class

cost structuresFocused

innovation

What are the areas of focus which support the Group/Function's overall vision and the Company X level objectives?

Please describe the objective in detail

1)

2)

3)

Please describe your Group's objectives below and check which Company X level objectives it supports. Every objectives should

support at least one of the four Company X level objectives.

1) Identify Business Unit/Function Level Objectives

• Understand Corporate level objectives

• Determine, at a high level, how the Business Unit or Function will support the organization in delivering the Corporate level objectives

• Document the objectives indicating which Corporate objective is supported.

Place a check mark in the box of the Corporate objective supported






1 2 3 4 5

How

Tools / Templates• Business Unit level objectives

documented in Excel template

Deliverables

• Business Unit / Function planners and managersOwners

• Each Business Unit / Function will have about 3-5 objectives

• Objectives should be easily understood and not require extensive explanation

Tips / Rules of Thumb

Corporate objectives

Business Unit/Function’s overall vision and the Corporate level objectives




experiences

Best return on information

technology (RoIT)



Establish Company as a leader in technology x


capabilities



Sample Communication Template

Description of the Objective




Objectives Description

2) Communicate Horizontally And Align Objectives To Other Business Units / Functions

• The planning team will facilitate a conference call with all Business Unit / Function BSC leads to communicate cross-Business Unit/Function objectives to:– Facilitate communication across Business Units and Functions.– Provide “cross-pollination” of strategy development.– Discuss and identify potential pan-Corporate initiatives.– Preliminarily identify common strategies and measures to be

incorporated into the Corporate level balanced scorecard.

How

Tools / Templates• Business Unit/Function objectives

communicated to all other Business Units and Functions

• Identification of cross-Business Unit opportunities

• Identification of potential strategies and measure to incorporate into Corporate level scorecard

Deliverables

• Business Unit / Function planners and managers

Owners

• Document objectives in presentation format that clearly articulates the Business Unit / Function objectives and how they relate to the Corporate Objectives.


Sample Agenda

• 15 minutes Introductions

• 90 minutes Round Table presentation of Objectives and explanations

• 15 minutes Wrap-up and next steps






1 2 3 4 5




experiences


technology (RoIT)





capabilities


Business UnitObjectives

Sample Communication Template





Objectives Description

3) Communicate Corporate, Business Unit / Function Direction to Division Executives and Planners

• Business Units / Functions facilitate communication of Corporate and Business Unit / Function objectives to:– Provide direction for the Divisions and sub-

Divisions in developing Division level objectives, strategies and measures

– Discuss and identify cross-Division initiatives– Preliminarily identify Business Unit strategies and

measures

How

Tools / Templates• Business Unit/Function

objectives communicated to Divisions and sub-Divisions

• Aligned Business Unit, Division, and sub-Division objectives

Deliverables

• Business Unit / Function planners and managers

Owners

• Document objectives in presentation format that clearly articulates the Business Unit / Function objectives and how they relate to the Corporate Objectives.

• Communicate Corporate and all Business Unit / Function objectives to help with organization-wide understanding of Corporate strategy


Communications plan

Snapshot of sample company communications

collateral replaces this white box (overlay on box below)






1 2 3 4 5


4) Identify Strategies, Measures and Targets Aligning to Corporate Strategy Map



experiences


technology (RoIT)





capabilities




Customer Strategies


Sam

ple

Bu

s U

nit

A S

trate

gie

s

EmployeeStrategies

Improve brand

performance

Attract the diversity, skills and competencies

we need



Develop effective, sustainable marketing

programs


Sample Bus Unit A Balanced Scorecard

• Revenue / Total market

• Operating profit


•Brand recognition rating•New product ramp rates•New product revenue/Total revenue


Sample Business Unit Strategy Map

A B

C

Sample Bus Unit A Targets

*See measure development primer for detailed instructions

1hYY+1 2hYY+1 FYYY+2 FYYY+3

Revenue / Total market

Operating profit

Brand recognition rating

New product ramp ratesNew product revenue/Total revenueMarketing spend / Revenue

% increase in marketing reach

Global diversity rating

Meeting employee retention plans

GoalsMeasure






1 2 3 4 5


4A) Identify Strategies

• Determine how

• Classify strategies into one of the four dimensions

• Document strategies

How

Tools / Templates• Business Unit / Function

strategies documented in the Excel templates

Deliverables

• Business Unit/Function and Division/sub-Division planners and managers

Owners

• Each strategy should fit into one of the Balanced Scorecard dimensions

• Strategies should be meaningful and easily understood

• Each Business Unit/Function strategy must be in support of a Business Unit/Function objectives


Strategies

What objective(s) does this strategy support?

How will we achieve our objectives? Provide a more detailed description of the strategy, if appropriate.

What BSC dimension does this strategy belong to? Customer, employee, financial, or operational excellence.

Objectives StrategiesDescription(optional)

BSC Dimension

Document Strategies






1 2 3 4 5


4B) Identify Measures

• For each strategy, identify measures that indicate performance against the strategy

• For each measure identified, conduct a cause and effect analysis to determine other measures that may be a leading driver of the original measure

• Choose the measure or set of measures that will best provide measurement of the strategy

• Document measures

How

Tools / Templates

• Business Unit / Function measures documented in the Excel template

Deliverables


Owners

Measures should be:• Relevant• Reliable• Timely• Valuable• Easy to represent visually• Easily benchmarked• Permit analysis over time• Emphasize leading indicators of performance • Linked to controllable events• Cost effective to collect and compute


Document Measures

Use a cause and effect analysis to

determine measures

CustomerSatisfaction

ProductQuality Price

ServiceQuality

Delivery

Product meetsexpecations

Product meetsneeds

Cost to aquireCost to use

Service meetsexpectations

Service meetsneeds Arrives when

promised

Arrives whenneeded

Relativepurchase price

Projected ROI

Cost to maintain

Cost to operate

Conformance

Reliability

ResponsivenessFlexibility On-time

delivery

Lead times

Performance






1 2 3 4 5


4C) Identify Targets

• For each measure set targets for a 3 year period (including 1st and 2nd half of 1st year).

• Document all assumptions made for each set of targets.

• Coordinate targets with Corporate, Divisions and sub-Divisions.

How

Tools / Templates• Business Unit / Function

targets documented in the Excel template

Deliverables


Owners

• Targets should be consistent with the financials and assumptions made for the strategic planning processes

• Targets should be set based on both internal forecast and external benchmarks


Make sure to document all

assumptions made

1hYY+1 FYYY+1 FYYY+2 FYYY+3

What is the measure name? What key assumptions support achieving the proposed goal?

What is the target for the period?




GoalsMeasure Assumptions






1 2 3 4 5


5) Finalize Targets For Measures

• Meet with Corporate corporate balanced scorecard leads to align targets where necessary.

• Make adjustments to targets as required.

• Meet with Divisions and sub-Divisions to align targets where necessary.

• Make adjustments to targets as required.

• Finalize target documentation.

How

Tools / Templates• Finalized targets for each

measure at the Business Unit/Function and Division level

• Finalized Balanced Scorecards at Corporate, Business Unit, Function, and Division levels

Deliverables


Owners

• Targets should be consistent with the financials and assumptions made for the strategic planning processes.

• Targets should be set based on both internal forecast and external benchmarks.


• Measure Description– Tracks attach rate by measuring the % of systems deals closed with a sale

at point-of-sale. Point-of-sale to be defined for each Division.

• Calculation– # of systems deals closed with Bus Unit A sales contract / Total #

of systems deals closed

• Rationale– Serves as a real-time attach rate measure. Allows Bus Unit A to

track how many systems deals closed include a Bus Unit A sale, enabling Bus Unit A to determine if they are optimizing the sale potential

• Drivers of Metric Variation– Corporate sales targets; Corporate knowledge and training of Bus

Unit A offerings; Integration of Bus Unit A with Corporate sales efforts

• Effects of Metric Variation– Bus Unit A revenue

0%

10%

20%

30%

Jan Feb Mar Apr May Jun

Actuals

Trend

Target

Sample Chart ViewBusiness Units / Functions may want to present

measures and targets in graphical format

Jan Feb Mar Apr May JunActual 10.0% 11.0% 13.0% 15.0% 17.0% 19.0%Target 20.0% 21.0% 21.0% 22.0% 22.0% 23.0%Variance -10.0% -10.0% -8.0% -7.0% -5.0% -4.0%






1 2 3 4 5


The Balanced Scorecard team (= name of whatever internal group is rolling it out) is available to provide support when needed

• The Balanced Scorecard team will provide additional support as requested by each Business Unit/Function

• Support activities may include the following:

– Strategy mapping workshops

– Strategy mapping instruction sessions with Divisions

– Measure development and/or review

– Balanced scorecard best practice sessions


Southwest Airlines: Linking People to Financial Performance

Objectives

•Fast ground turnaround

Goals:What the

strategy is trying to achieve

Targets

•30 Minutes•90%

Targets:The level of performance

or rate of improvemen

t needed

•Cycle time optimization

Initiatives:Key action programs

required to achieve targets

InitiativesMeasures

•On Ground Time

•On-Time Departure

Measures:How success

or failure (performance) against goals is monitored

Strategic Theme: Operating Efficiency

Profits and RONAFinancial

Learning

Ground crew alignment

Lowest prices

Fewer planes

Customer

Internal

Fast ground turnaround

Strategy Map

On-time Service

Attract & Retain More Customers

Grow Revenues

An Illustrative


•% Ground crew trained

•% Ground crew stockholders

Southwest Airlines’ Approach to Measurement

Objectives Measures

•# Customers•FAA On Time

Arrival Rating•Market Survey

•On Ground Time

•On-Time Departure

Strategic Theme:Operating Efficiency

Initiatives

•Cycle time optimization

•Ground crew training

•ESOP

•Customer loyalty program

•Quality management

Targets

•30% CAGR

•20% CAGR

•5% CAGR

•12% growth•Ranked #1•Ranked #1

•30 Minutes•90%

•yr. 1 70%yr. 3 90%yr. 5 100%

•Profitability

•Grow Revenues

•Fewer planes

•More Customers

•Flight is on -time

•Lowest prices

•Fast ground turnaround

•Ground crew alignment

Strategic Theme: Operations Excellence

Profits and RONAFinancial

Learning

Ground crew alignment

Fewer planes

Customer

Internal

Fast ground turnaround

Strategy Map

Attract & Retain More Customers

Grow Revenues

Lowest prices

On-time Service

An Illustrative


Contents

• Overview



• HR Metrics




How to choose Balanced Scorecard measures

• Identify measures that are drivers of performance for each strategy.

• Analyze measures to include both leading and lagging indicators.

• Find the important drivers and reduce the number of measures applied.

• Look at overall scorecard and avoid any unbalanced, ‘game-able’ measures.

Source: “Challenge your Balanced Scorecard”, Graham

What gets measured gets done


Identify measures that are drivers of performance for each strategy.



experiences


technology (RoIT)

Corporate Objectives*


Establish company as a leader in technology x


capabilities


Bus Unit A Objectives*


Customer Strategies


Sam

ple

Bu

s U

nit

A

Str

ate

gie

s

EmployeeStrategies

Improve brand performance

Attract the diversity, skills and competencies

we need



Develop effective, sustainable

marketing programs


• Revenue / Total market• Operating profit


•Brand recognition rating


Sample “Bus Unit A” Strategy Map

•New product ramp rates•New product revenue / Total revenue

Identify Measures

Each measure should meet four essential criteria:

Relevant - Directly linked to critical objectives and strategies

Reliable - Verifiable and free from subjective judgment or bias

Timely - Current; available before it loses its capacity to help make decisions about tomorrow’s operations, activities, and budgets

Valuable - Able to help management make significant decisions about significant issues*Note: “Corporate” is made up of “Business

Units” that in turn are made up of “Divisions” and “sub-Divisions”


Analyze measures to include both leading and lagging indicators


Well chosen leading indicators foreshadow success or failure well before financials can reflect them

Analyze Measures

• Look to measure important business processes, not just results.– A result may be a lagging indicator while the process that drives the result may

provide a more leading indicator of performance.• Example: Inventory turnover is a result measure while set-up time reduction is a process

measure.• Example: Market share is a result measure while product development lead time is a process

measure.

• Conduct an analysis to determine the cause and effect relationship between measures and identify the best indicator of performance.

– In many instances, a measure can be predicted by one or more other measures. – Conducting a cause and effect analysis will help the management team to

understand the full set of potential measures and choose the most appropriate measures to drive and measure performance.

• Example: Customer satisfaction may be predicted by on-time delivery rates and quality ratings.


Look to measure important business processes, not just results

Source: “implementing your strategies”, Keegan, Jones, Eiler

Operational Strategies

Sample Process Measures

“Differentiate the product” or “Simplify the product”

• Number of products or services

• Number of parts

“Serve the customer as a first priority”

• Length of the order fulfillment cycle

• Length of the manufacturing cycle

• Number of distribution points

“Develop technologically advanced products in an effective manner”

• Product development lead time

• Number of engineering changes

• Number of new patents

“Procure material effectively”

• Items passing quality standards

• Unit cost

“Establish a low-cost administrative structure”

• Number of profit centers

• Number of bank relationships

• Number of invoices

“Develop our human resource assets”

• Training hours achieved

• Counseling frequency

Analyze Measures

Example Process Measures

Description

Often times measurement of the process rather than the result provides a better leading indicator of performances

• For the measures identified, determine whether it is a process or result measure.

• If the measure is a result measure, determine if there is a process that drives the result.

• Identify a measure(s) that indicate performance of the process.

How to Use


Conduct a Cause and Effect analysis

Analyze Measures

– Define the problem to be solved, record on the left side of the diagram

– List the “5 M’s” as categories (or develop your own more specific categories) listing each on a separate thread or bone

– Brainstorm potential causes, listing them under the appropriate category

– Add additional branches or bones to capture causes related to one another

– Review the resulting list to identify others not yet captured.

Example Cause and Effect Diagram

The Cause and Effect diagram, also called the Fishbone or Ishikawa diagram (after it’s creator Dr. Ishikawa) is a tool that is used to help identify all the possible or probable sources of a given problem. Once developed, this list of potential causes can be narrowed down to root causes using other methods such as Pareto Analysis.

The basic tool uses a graphic that allows potential sources of variation or defects to be developed and recorded using categories of causes such as the “5 M’s” Man (resources), Machine (or equipment), Methods (procedures), Materials and Measurement.



ServiceQuality

Delivery


Product meetsneeds




promised

Arrives whenneeded


Projected ROI

Cost to maintain

Cost to operate

Conformance

Reliability


delivery

Lead times

Performance

How to Use

Description


Find the important drivers and reduce the number of measures applied

Reduce the Number of Measures

• Reduce the number of measures based on their indication of performance – Measures should only be chosen if they provide a good indication of

either past or future performance– Delegate measures to lower level scorecards

– Executive-level scorecards focus on processes that require executive-level attention, while scorecards of middle managers focus on processes for which they are responsible

• Identify measures that can be externally benchmarked– When making the choice between measures, choose those measures

that can be benchmarked against external sources to help the company from having an internal bias


Well-designed balanced scorecards avoid large numbers of measures – Kaplan and Norton recommend 25 measures or less for the Balanced Scorecard


Reduce the number of measures based on their indication of performance





ServiceQuality

Delivery


Product meetsneeds




promised

Arrives whenneeded


Projected ROI

Cost to maintain

Cost to operate

Conformance

Reliability


delivery

Lead times

Performance

Description Reduce the number of measures by rating the cause and effect measures identified and eliminating all measures that rated to have a low effect on the outcome.

How to Use Example Cause and Effect Rating Diagram

M

H

M

L

L

H

HM

H

L

H

M

M

L

L LM

M

M

H

H

HH

• In defining the leading and lagging indicators, a cause and effect diagram has been drawn.

• For each cause, indicate the level of influence on the effect

– High Effect: has high influence over the result

– Medium Effect: Some influence over the result

– Low Effect: Little influence over the result

• Remove all measures that have a low effect on the result along with its entire branch:

– Example: in the example diagram, “Product Quality” would be removed along with its entire branch (“product meets needs”, “product meets expectations”, etc.)


Delegate measures to lower level scorecards


Description Executive-level scorecards focus on processes that require executive-level attention, while scorecards of middle managers focus on processes for which they are responsible.

How to Use

Business Unit

Measures

DivisionMeasures

•Total Assets

•Return on Net Assets

•Days in Payables

•Net Income

•Days in Payables

•Accounts Receivable Turnover

•Revenue

•Return rates

•Total cost to customer

•Brand recognition

•Sales per channel

•Number of customers

•Return rates

•Customer complaints

•Cost Excess Capacity

•Inventory turnover

•On-time delivery

•Space utilization

•Average lead time

•Forecast accuracy

•Schedule adherence

•Space utilization

•Turnover rate

•Employee satisfaction

•Ethics violations

•Health promotion

•Competency coverage ratio

•Ethics violations

Identify measures on the Business Unit level scorecard that can be removed and only tracked on at the Division scorecard due to one of the following:

– The measure is more influential for a specific Division and does not make sense to track across all Divisions

• Example: Return rates may make sense for a product Division but not for a service-oriented Division

– Although the measure is important, it may not be very risky

• Example: Ethics violations are important but ethics has never been an issue in the past

– The measure may play importance into how a Division executive manages the business but not in how a Business Unit executive would manage

• Example: Space utilization may drive a Division executive’s decisions but the Business Unit manager may not make space-related decisions


Identify measures that can be externally benchmarked

• Most organizations will compare their performance to internal benchmarks (last year’s performance or to plan).

• By comparing performance against external benchmarks, the Business Unit can further understand how market and industry conditions may be affecting overall performance.

• When reducing the number of measures, take into account how easily the measure can be externally benchmarked.


Example information that can be used for external benchmarks:

•Benchmarking studies

•Statistics about major competitors

•Items in the business press

•Measurements of customer complaints

•Prices achieved for bellwether items

•Detailed part cost comparisons

•“Thought pieces” concerning innovative approaches to product distribution

•Capital redeployment techniques being used by others


Look at overall scorecard and avoid any unbalanced, ‘game-able’ measures


“To implement your strategies, change your measurements”, Keegan, Jones Eiler

Balance the Scorecard

• A scorecard should be balanced in breadth of metrics and avoidance of sub-optimization (optimizing a sub-part at the expense of the whole).

• To make sure the measures are balanced and not encouraging the wrong behavior, ask the following two questions:

– What actions could I take that would improve performance, yet be bad for the company?

– For each of those actions, is there another measure that would prevent me from taking it?

• If there isn’t a preventative measure, add one.• If there is no preventative measure that can be added, the organization is better off

eliminating the measure that is encouraging sub-optimal behavior.

Balanced Scorecards should consist of a set of measures that work together to provide a robust measurement system


Contents

• Overview



• HR Metrics




4.28

4.04

3.79

3.76

3.72

3.60

3.48

3.40

3.20

3.04

3.00

2.84

1.84

1 2 3 4 5

Being a Business Partner

Being a Strategic Thinker

Facilitating Change

Measurement/HR Metrics

Developing Shared Services

Being a Business Leader

New Information Technology

Developing New HR Competencies

Developing Centers of Excellence

Team-Building

Outsourcing

Redefining Line Management’s Role

Making HR a Profit Center

Mean Response

Source: HRI’s “2002 Survey of the Role and Structure of Human Resources”

2002 survey of HR executives from 32 large companies

Survey responses ranged from 1 for “No Extent” to 5 for “Very Great Extent”

Measurement/HR metrics is a strategic HR initiative that is present to a relatively great extent in respondents’ organizations in 2002

Copyright © 2005 Deloitte Consulting LLP. All rights reserved. For discussion purposes only. 41Source: SHRM/Fisher Human Resource Strategies

2002 survey of 571 randomly selected SHRM members

The size of the firm does not necessarily correlate to whether HR is considered a fully integrated strategic partner

30%

27%

24%

16%

27%

23%

24%

27%

25%

19%

27%

27%

23%

25%

37%

43%

56%

53%

44%

52%

48%

6%

5%

1%

4%

2%

1%

3%

0% 25% 50% 75% 100%

Fewer than 100

100 to 249

250 to 499

500 to 999

1,000 to 2,499

2,500 or more

Total

Fully Integrated Partner Primarily Reactive to Organizational NeedsPartially Integrated Strategic Partner Other

Copyright © 2005 Deloitte Consulting LLP. All rights reserved. For discussion purposes only. 42Source: 2002 SHRM/EMA Staffing Metrics Survey

Survey of 627 HR professionals

Cost per hire is considered one of the most valuable staffing metrics in justifying HR’s contribution to the bottom line

60%

59%

55%

50%

50%

48%

45%

44%

39%

24%

22%

23%

34%

35%

36%

43%

41%

41%

38%

44%

43%

51%

51%

37%

0% 25% 50% 75% 100%

Recruitment Costs per Hire

Cost of Turnover

Source of Hire

Total Cost per Newly Hired Employee

Number of New Hires

Quality of New Hires

Vacancies

Time-to-Fill a Position

Number of Replacements

Voluntary Separation Cost

Involuntary Separation Cost

Time-to-Start

Staffing Metrics

Percent of Respondents

Extremely Valuable Valuable


Study of 627 human resource professionals

New-hire data is likely to be reported more frequently than other staffing metrics

78%

88%

70%

78%

68%

41%

35%

76%

49%

28%

20%

20%

13%

9%

19%

12%

20%

22%

25%

16%

28%

26%

34%

34%

10%

8%

11%

12%

6%

6%

9%

8%

10%

27%

31%

7%

13%

34%

41%

41%

8%

3%

0% 25% 50% 75% 100%

Number of New Hires

Vacancies

Source of Hire

Number of Replacements

Time-to-Fill a Position

Recruitment Costs per Hire

Total Cost per Newly Hired Employee

Time-to-Start

Quality of New Hires

Cost of Turnover

Involuntary Separation Cost

Voluntary Separation Cost

Monthly Quarterly Semiannually Annually

Source: 2002 SHRM/EMA Staffing Metrics Survey

Copyright © 2005 Deloitte Consulting LLP. All rights reserved. For discussion purposes only. 44Source: Human Resource Institute

2003 survey of 62 companies

“How does your organization evaluate training and/or development program effectiveness?”

96.8%

54.8%

53.2%

32.3%

17.7%

100.0%

70.6%

52.9%

35.3%

23.5%

93.1%

58.6%

51.7%

41.4%

20.7%

0% 25% 50% 75% 100%

Participantreaction

Participantlearning

Observedbehavior

Organizationalresults

Return oninvestment

All respondents

Large companies

Global companies

Copyright © 2005 Deloitte Consulting LLP. All rights reserved. For discussion purposes only. 45Source: CFO Research Services

Financial executives’ responses to“To what extent do you know the return on your aggregate investments in human capital?”

Not at all14% To a minimal

extent40%

To a moderate extent30%

To a considerable

extent14%

To a great extent

2%

2002 Mercer Human Resource Consulting/CFO Research Services survey of 180 financial executives

Copyright © 2005 Deloitte Consulting LLP. All rights reserved. For discussion purposes only. 46Source: Human Capital Index Study

2001 survey of over 500 North American companies

DimensionTotal Rewards and

Accountability

Collegial, Flexible Workplace

Recruiting and RetentionExcellence

Communications Integrity

Focused HR ServiceTechnologies

Prudent Use of Resources

Watson Wyatt’s HCI study linked expected change in market value with a significant improvement* in various dimensions

16.5%

9.0%

7.9%

7.1%

6.5%

-33.9%

-40% -30% -20% -10% 0% 10% 20% 30% 40%

*Defined as a one standard deviation increase

Copyright © 2005 Deloitte Consulting LLP. All rights reserved. For discussion purposes only. 47Source: Human Resource Executive and ERC Dataplus

Some HR functions were perceived as showing a positive change in efficiency(value per dollar spent) in 2001

24%

15%

15%

15%

16%

14%

11%

16%

14%

11%

11%

6%

3%

42%

46%

44%

43%

40%

42%

43%

35%

36%

34%

34%

26%

22%

29%

32%

36%

38%

37%

34%

39%

34%

42%

48%

51%

52%

58%

5%

7%

5%

4%

7%

10%

7%

15%

8%

7%

4%

16%

17%

0% 25% 50% 75% 100%

Benefits Administration

Organizational Communication

Employee Relations

General Record-Keeping

Employee Orientation

Recruiting

Compensation Administration

HRIS

Training

Selection

Legal Issues

EAP Administration

Career Planning

Much Better Better About the Same Worse and N/A


1999 survey of 184 HR professionals

Firms expected to increase the degree to which HR is measured between 1999 and 2004

15%

67%

53%

28%

30%

4%

2%

1%

0% 25% 50% 75% 100%

1999

2004

Percent of Respondents

High Degree Moderate Degree Low Degree Not at All


1999 survey of 184 HR professionals

More firms measure the effectiveness of HR than they do the efficiency of HR

58%

57%

62%

19%

24%

18%

23%

20%

19%

0% 25% 50% 75% 100%

Overall HRDepartment

Specific HRProgram

Specific HRActivities

Percent of Respondents Measuring

Effectiveness Efficiency Both


Contents

• Overview



• HR Metrics




• EEO case volume – Internal– External

• Internal to external EEO case conversion

• Benefits revenue %

• Compensation revenue %

• Retention rate– Overall– Overall<1 yr– Overall<

3yrs– Sales force

• HIPO retention rate

• Arbitrations rate

• Total cost of HR compared to budget

• HR headcount ratio

• OSHA safety index

• Management Placements – Female– Minority

• Total # of training days– Initial– Continuation

• % Failures (Training)

• Benefits vendor operational performance

• Staffing cycle time

• Offer Acceptance rate

• # filled positions

• Aged requisitions

• LRRC call volumes

• EE service center operational performance index– Internal operations– Vendors

• Viewpoints- VZ respects ee’s of different ages, races, gender etc

• Viewpoints- Work/ personal life balance

• Viewpoints-I am given a real opportunity to improve my skills at VZ

• Benefits Vendor customer satisfaction

• Viewpoints- Total benefits program rating

• Viewpoints- EE satisfaction with pay

• LRRC- % client satisfaction

• Employee Services customer satisfaction index

• Viewpoints – VZ compared to other companies

• Female glass ceiling

• Minority glass ceiling

• UDLS % participation by business unit

• Diversity profile

• # of promotion FT & PT

• # Special recognition awards

• % Diversity recruitment

• % Promo from HIPO

• % HIPO with development plans

• Absence rate• Churn

Call Centers

DiversityWorkforce Development

Compensation / Benefits

Staffing/ benefits

Labor Relations

Customer Service

Str

ate

gic

Cu

sto

me

rO

pe

rati

on

sF

ina

nc

ial

HR Measurement Linkage Model

Verizon’s HR Metrics Map

Source: Verizon Communications Inc; Corporate Leadership Council Research


When Gerry Isom became president of CIGNA Property and Casualty (P&C) in 1993, he faced a formidable challenge: a very numbers-driven company that seemed unable to influence the direction the numbers were heading — down. During the four years before Isom came on board, the company had lost more than $1 billion, and the combined ratio was 140%. (For every $1 premium coming in, the company was paying out $1.40 in losses and expenses.) In 1993 alone, CIGNA P&C lost $275 million. It was at the bottom of the fourth quartile in the P&C industry. Isom resolved to take the company into the top quartile. His strategy for getting there? To reshape CIGNA from a generalist insurance company, willing to underwrite a risk in any sector, to a specialist company that would underwrite only when it could be assured of better-than-average results .

When Gerry Isom became president of CIGNA Property and Casualty (P&C) in 1993, he faced a formidable challenge: a very numbers-driven company that seemed unable to influence the direction the numbers were heading — down. During the four years before Isom came on board, the company had lost more than $1 billion, and the combined ratio was 140%. (For every $1 premium coming in, the company was paying out $1.40 in losses and expenses.) In 1993 alone, CIGNA P&C lost $275 million. It was at the bottom of the fourth quartile in the P&C industry. Isom resolved to take the company into the top quartile. His strategy for getting there? To reshape CIGNA from a generalist insurance company, willing to underwrite a risk in any sector, to a specialist company that would underwrite only when it could be assured of better-than-average results .

Business SituationBusiness Situation

Starting at the top, Isom reinvigorated the executive council by bringing in four new hires to join the six members already on board. Twenty of the top performers, from the business and from the IT organization, were also brought together to create a transformation team. In addition, the position of "transformation officer" was created. Distribution management, underwriting, and claims management — the three components of P&C's value chain — were redesigned to make them more responsive to changing market conditions. These changes set the stage for the leadership team to begin focusing on the business segments that would yield profitable results. The new strategic approach to market segmentation began to show results at the end of the first year of the strategy.

Starting at the top, Isom reinvigorated the executive council by bringing in four new hires to join the six members already on board. Twenty of the top performers, from the business and from the IT organization, were also brought together to create a transformation team. In addition, the position of "transformation officer" was created. Distribution management, underwriting, and claims management — the three components of P&C's value chain — were redesigned to make them more responsive to changing market conditions. These changes set the stage for the leadership team to begin focusing on the business segments that would yield profitable results. The new strategic approach to market segmentation began to show results at the end of the first year of the strategy.

Leading Strategic Change

Leading Strategic Change

Once these changes were under way, Isom launched the Balanced Scorecard program. (A senior vice president was given full-time responsibility for keeping it on track.) As a first step, the executive team began to translate the strategic vision into specific performance objectives:•Enter markets that meet profit targets; •Build and maintain relationships with target customers and producers; and •Manage risk more effectively.

Once these changes were under way, Isom launched the Balanced Scorecard program. (A senior vice president was given full-time responsibility for keeping it on track.) As a first step, the executive team began to translate the strategic vision into specific performance objectives:•Enter markets that meet profit targets; •Build and maintain relationships with target customers and producers; and •Manage risk more effectively.

Implementing the Balanced Scorecard

Implementing the Balanced Scorecard

Each of the business units had to understand whether it had relationships with the right agents and brokers to attract the target customers it wanted to do business with. Each unit needed an appropriate set of underwriting and claims-processing capabilities to perform well in its target markets. The BSC process was used to clarify issues and achieve consensus on how to implement the strategy. During the first eighteen months, the executives and transformation team developed a strong set of measures they could all agree on. The next challenge was taking the scorecard to the rest of the organization. To accomplish this, the leadership team agreed to integrate the scorecard with the financial planning process, communicate more effectively with the rest of the organization, and link the BSC with the compensation plan to achieve organizational alignment.

Each of the business units had to understand whether it had relationships with the right agents and brokers to attract the target customers it wanted to do business with. Each unit needed an appropriate set of underwriting and claims-processing capabilities to perform well in its target markets. The BSC process was used to clarify issues and achieve consensus on how to implement the strategy. During the first eighteen months, the executives and transformation team developed a strong set of measures they could all agree on. The next challenge was taking the scorecard to the rest of the organization. To accomplish this, the leadership team agreed to integrate the scorecard with the financial planning process, communicate more effectively with the rest of the organization, and link the BSC with the compensation plan to achieve organizational alignment.

Achieving ConsensusAchieving Consensus

All business units ultimately shared a common set of strategic business objectives. Based on this shared understanding of the strategy, each of them was able to tailor scorecards to its own unique strategic realities. The business units used scorecards to tell the story of their specific strategy to everyone in their own business. They used measures to monitor progress toward meeting these objectives. The units identified the things they needed to get done to move the company into the top quartile.

All business units ultimately shared a common set of strategic business objectives. Based on this shared understanding of the strategy, each of them was able to tailor scorecards to its own unique strategic realities. The business units used scorecards to tell the story of their specific strategy to everyone in their own business. They used measures to monitor progress toward meeting these objectives. The units identified the things they needed to get done to move the company into the top quartile.

Aligning the Organization

with the Strategy

Aligning the Organization

with the Strategy

The Balanced Scorecard in Practice (1/2)

Source: “Harvard Business School Working Knowledge


The next phase in the rollout was to implement the BSC at the individual level. This was a turnaround situation, and there was considerable excitement (and some skepticism) associated with the changes that were introduced. An incentive compensation system was used to involve every employee in the BSC program and reinforce all the strategic changes.A business unit roster was used to link every employee to a specific line of business. This allowed management to communicate a specific business vision to the people who would carry it out. In addition, incentive compensation was tied to the contribution each individual made to a specific line of business. At the end of the year, each employee was awarded a number of "phantom" shares based on his or her individual performance. The value of the employees' shares was determined by the performance of the business unit they were a part of. How the business unit performed against the measures on the scorecard determined the value of a share for the business unit.

The next phase in the rollout was to implement the BSC at the individual level. This was a turnaround situation, and there was considerable excitement (and some skepticism) associated with the changes that were introduced. An incentive compensation system was used to involve every employee in the BSC program and reinforce all the strategic changes.A business unit roster was used to link every employee to a specific line of business. This allowed management to communicate a specific business vision to the people who would carry it out. In addition, incentive compensation was tied to the contribution each individual made to a specific line of business. At the end of the year, each employee was awarded a number of "phantom" shares based on his or her individual performance. The value of the employees' shares was determined by the performance of the business unit they were a part of. How the business unit performed against the measures on the scorecard determined the value of a share for the business unit.

Making Strategy

Everyone's Job

Making Strategy

Everyone's Job

CIGNA P&C built a monitoring system that provides a simple summary using red, yellow, and green indicators. When the indicators are green, the business is moving in the desired direction. Yellow indicates cause for concern. Red means something is not right and requires further examination. For example, red might indicate a single large loss or a number of smaller losses in a particular market. In either case, an alert is sounded, and attention is drawn to discover the root cause of the situation. This reporting system has eliminated much confusion, and useful information is now readily available. Solutions can be developed more quickly.

CIGNA P&C built a monitoring system that provides a simple summary using red, yellow, and green indicators. When the indicators are green, the business is moving in the desired direction. Yellow indicates cause for concern. Red means something is not right and requires further examination. For example, red might indicate a single large loss or a number of smaller losses in a particular market. In either case, an alert is sounded, and attention is drawn to discover the root cause of the situation. This reporting system has eliminated much confusion, and useful information is now readily available. Solutions can be developed more quickly.

Building a Strategic Feedback System

Building a Strategic Feedback System

At the start of this transformation effort, the finance department had control over much of the information considered to be "important." As a result of the BSC, there has been a significant transfer of management authority from finance to other business managers. For a numbers-driven organization, this has been a significant shift. Today, scorecard information is available to everyone in the organization. Everyone knows what the strategies are, what the objectives are, what the measures are, and how they are doing. The BSC management system makes it possible for people everywhere in the organization to provide feedback (observations, comments, and suggestions) to those responsible for specific measures.The front line has become a source of insight into how well the strategy is being executed. The ongoing challenge is to shorten the time it takes to organize a meaningful response to market changes. Putting the strategy on everyone's desktop, and inviting dialogue throughout the organization, helps to move knowledge around the organization faster. It increases the ability to use knowledge, make decisions, and execute the strategy.

At the start of this transformation effort, the finance department had control over much of the information considered to be "important." As a result of the BSC, there has been a significant transfer of management authority from finance to other business managers. For a numbers-driven organization, this has been a significant shift. Today, scorecard information is available to everyone in the organization. Everyone knows what the strategies are, what the objectives are, what the measures are, and how they are doing. The BSC management system makes it possible for people everywhere in the organization to provide feedback (observations, comments, and suggestions) to those responsible for specific measures.The front line has become a source of insight into how well the strategy is being executed. The ongoing challenge is to shorten the time it takes to organize a meaningful response to market changes. Putting the strategy on everyone's desktop, and inviting dialogue throughout the organization, helps to move knowledge around the organization faster. It increases the ability to use knowledge, make decisions, and execute the strategy.

Culture Shift into High GearCulture Shift

into High Gear

Within one year, Isom's team had eliminated the losses. Within two years, they were beginning to show a profit. After six years of using the BSC, CIGNA P&C joined the top quartile of its industry. Its financial performance went from a loss of $275 million in 1993 to more than $100 million in profits five years later. Gerry Isom saw his vision translated into reality.

Within one year, Isom's team had eliminated the losses. Within two years, they were beginning to show a profit. After six years of using the BSC, CIGNA P&C joined the top quartile of its industry. Its financial performance went from a loss of $275 million in 1993 to more than $100 million in profits five years later. Gerry Isom saw his vision translated into reality.

The Bottom Line

The Bottom Line

The Balanced Scorecard in Practice (2/2)

Source: “Harvard Business School Working Knowledge


The HR Balanced Scorecard Approach at TATA Engineering

Financial: Improving the returns on the Human Capital employed

Customer : Developing Human Resource to meet Internal and External Customer Expectations

Internal Processes: Continuously evolving HR processes in order to meet the stakeholders expectation & contribute to the Business objectives

Learning & Growth: Equip the HR team to deliver as planned

HR role on the four perspectives is addressed as

Outcomes: The intent is to ensure that HR would deliver on clear and quantifiable measures and thus lead by being a role model. An attempt has been made to quantify HR by specifying the expected outcome and defining the corresponding quantifiable measure for it.

The Corporate HR Scorecard defines overall strategic priorities and context which will guide the HR activities The Corporate HR BSC drawn up is consistent with the Business Unit strategic agenda on the four perspectives.

Quantifiable and objective measures are identified for all HR activities, on which targets are taken. For these measures, a strategic initiative plan is drawn up to spell out the specific action plan, the process owner and milestones indicating completion of a phase. Resource and Budget allocations are then deployed to bridge the gap between the current performance and the target.

Tata Engineering’s Views on Balanced Score Card: An HR practitioner’s perspective of Balanced Scorecard is that of a tool that integrates the HR activities with the Business perspectives leading to the achievement of the end-objectives. A comprehensive HR Balanced Scorecard to help HR practitioners to deliver visible and measurable HR contribution to the Business. It will also help in bringing about changes in the workplace by fostering a climate of innovation and intrapreneurship.It will lead to a smooth transition of HR into the 21st century by building a strong and credible HR system and is a proactive step towards Human Resource Capital Management.

The Initiative: At Tata Engineering, the Balanced Scorecard initiative was undertaken at the Business Unit level and a comprehensive roadmap was drawn up addressing the four perspectives: Financial, Customer, Business Processes and Learning & Growth. The Balanced Scorecard initiative also integrates the TBEM process of internal assessment, which has been institutionalized to nurture an environment of high performance and organization wide learning and sharing.

Source: www.humanlinks.com/manres/articles/balanced_scorecard.htm


Retail giant Marks & Spencer has linked its staff satisfaction survey to the company's sales performance to measure HR's output as part of its balanced scorecard. The store is able to relate responses to certain questions in the twice-yearly questionnaire to improvements in sales per square foot.

Retail giant Marks & Spencer has linked its staff satisfaction survey to the company's sales performance to measure HR's output as part of its balanced scorecard. The store is able to relate responses to certain questions in the twice-yearly questionnaire to improvements in sales per square foot.

Marks and Spencer’S Scorecard

Marks and Spencer’S Scorecard

• According to Marcus Powell, head of HR strategy and change, a 1 per cent increase in the 'clarity about own contribution to meet customer needs' question equates to a 5.1 per cent increase in sales per square foot. A 1 per cent increase in employee satisfaction on the 'praise for performance' question translates to a 2.9 per cent jump in sales per square foot.

• Powell said the link between employee satisfaction and sales performance is an important part of the company's balanced scorecard. According to Powell the scorecard has helped move HR to the top of the business agenda and played a major part in the company's improved UK performance over the past year. HR had very short-term goals of helping the business stabilize. The company had always been known for treating its staff well and we want to get back to that and become the standard against which all other [HR departments] are measured.

• According to Marcus Powell, head of HR strategy and change, a 1 per cent increase in the 'clarity about own contribution to meet customer needs' question equates to a 5.1 per cent increase in sales per square foot. A 1 per cent increase in employee satisfaction on the 'praise for performance' question translates to a 2.9 per cent jump in sales per square foot.

• Powell said the link between employee satisfaction and sales performance is an important part of the company's balanced scorecard. According to Powell the scorecard has helped move HR to the top of the business agenda and played a major part in the company's improved UK performance over the past year. HR had very short-term goals of helping the business stabilize. The company had always been known for treating its staff well and we want to get back to that and become the standard against which all other [HR departments] are measured.

The Bottom Line

The Bottom Line

The move is part of the organization’s restructuring of HR, which is designed to encourage and reward commitment. HR's role now is to support the line providing leadership to their people and helps the business deliver better results and Balanced Scorecard at Marks & Spencer is doing the same or even more.

The move is part of the organization’s restructuring of HR, which is designed to encourage and reward commitment. HR's role now is to support the line providing leadership to their people and helps the business deliver better results and Balanced Scorecard at Marks & Spencer is doing the same or even more.

New Role of HR

New Role of HR

Marks and Spencer Scorecard takes HR to the top of the agenda

Source: www.personneltoday.com


Measuring Human Capital: Selected Case Studies

AirBus is an example of how a distinct set of metrics can help an alliance evolve into a successful business. The European commercial aircraft manufacturer was created as a consortium of government-controlled firms in England, France, Germany and Spain. Partners established a clear set of metrics, as well as a common language. Metrics included establishing ways to track the status of product development, schedules, quality control, operating efficiency, customer satisfaction, new technology, maintenance and training. In 2001, three decades after its inception as an alliance, AirBus evolved into a single integrated company and has been applauded for "changing the face of the commercial aviation industry."

Measuring the financial performance of the recruitment function is important to many organizations.

• GTE Directories aligns its HR practices to corporate strategy by tracking its turnover-to-hire ratio. When the firm pursues a growth strategy, it seeks a turnover-to-hire ratio of less than one; if it is operating in an employment reduction market, it seeks a turnover-to-hire ratio of greater than one.

• Merix measures both days-to-fill and cost-per-hire to monitor the efficiency of its recruitment process. The goals for the measures are determined during planning sessions. The cost-per-hire metrics permit more accurate budgeting. In addition, Merix tracks OSHA accident rates, lost-time measures and employee satisfaction survey results to project employee turnover. The turnover and cost-per-hire measures combine to provide projections for the next year's hiring expenses.

In 2001, Prudential reported that it had undertaken an HR strategic measurement program, driven by a need to understand its human capital just as clearly as its marketplace and customer base. Michael W. Tindall, vice president of strategic measures, presented Prudential's program at HRI's 29th Annual Issue Management Conference in February 2001. The 125-year-old financial products and services company with 60,000 employees in 20 countries uses a data warehouse and an HR dashboard as its backbone. The data warehouse provides a central repository for all human resources strategic data and is continually fed by the organization's human resource management transactional system and by files from opinion surveys.

The core implementation team consists of a mix of systems and HR people with the business acumen to understand metrics. Senior executive champions provide project oversight. The HR dashboard design process began with a lengthy analysis of the business partner/client's business requirements, organizational structure, and physical/cultural environment. This analysis included looking at how the client measures things and considering which technological tools would best suit its needs.

Prudential's internal HR dashboard begins with a PeopleSoft EPM/Business Objects-based system. Balanced scorecard perspectives were defined by profit centers and business groups. The dashboard provides key performance contract HR metrics and drill-down capability to the employee level. It has proven to be a viable tool for HR generalists and line managers trying to manage their human capital.

Source: Human Resource Institute


Contents

• Overview



• HR Metrics




Guidelines for Discussion and Grading of Key HR Metrics

• A Group Exercise

• The success of this workshop is built on your input and unique knowledge of your company’s goals and needs. Accordingly, your open participation is strongly encouraged.

• Driven by Strategy

• The value in the exercise results from the selection of the metrics most closely aligned with your company-specific corporate and HR strategy, therefore we ask that you bear it in mind and refer to it often.

• Focused on Ideals

• Recognizing that some of what you will encounter in this exercise will be aspirational, we ask you to provide your input assuming no technological or informational limitations.

• Ongoing Work-in-Progress

• The decisions arrived at and metrics selected today are not set in stone. As your company’s strategic goals and business environment change, you will be able to adjust your Key Performance Indicators to mirror those changes.

Grading Scale

• A” Very Interesting to Track; Could be a KPI

• “C” Somewhat Interesting toTrack; Unlikely to be a KPI

• “F” Not Interesting to Track

Source: Closing the Strategy-Execution Gap in HR, Corporate Leadership Council


Demographic Profile Metrics

Metric

Segmentation Options Description/Formula Grade (A,C,F)

Staffing Rate

Staffing Ratio

Span of Control

Managerial Staffing Ratio

Managerial andProfessional Versus Non-M&P Staffi ng Ratio

• Function, location, age, gender, ethnicity, employment type, occupational group, tenure, compensation band, etc.

• Function, location, age, gender, ethnicity, employment type, occupational group, tenure, compensation band, etc.

• Function, location, line of business



• Full-time equivalent employees in the specifi ed category as a percentage of total full-time equivalent employees: Headcount Option / Headcount * 100

• Number of full-time equivalent employees in the specifi ed category for every one full-time equivalent employee out of the specifi ed category. Headcount Option / (Headcount – Headcount Option)

• Number of full-time equivalent clerical, op er a tive and professional employees for every one full-time equivalent managerial employee: (FTE.Clerical + FTE.Operative + FTE.Professional) / FTE.Managerial

• Number of full-time equivalent employees for every one full-time equivalent managerial employee: FTE / FTE.Managerial

• Number of full-time equivalent clerical and operative employees for every one full-time equivalent managerial or professional employee:(FTE.Clerical + FTE.Operative) / (FTE.Managerial + FTE.Professional)

_

_

_

_

_



Workforce Productivity Metrics

Metric


Operating Revenue per FTE

Managerial Staffing Ratio







• Average operating revenue generated per full-time equivalent employee: Operating Revenue / FTE

• Average operating expense incurred per full-time equivalent employee: Operating Expense / FTE

• Average operating profi t (before tax, interest and depreciation) returned per full-time equivalent employee: (Operating Revenue – Operating Expense) / FTE

• Total expenses for selected option as a percentage of operating revenue: Compensation Expense. Option / Operating Revenue * 100

• Total expenses for selected option as a percentage of operating expense: Compensation Expense. Option / Operating Expense * 100

_

_

_

_

_

Financial Measures

Operating Expense per FTE

Operating Profit per FTE


• Function, location, line of business • Number of (dollars, euro, pounds) of operating profit returned for every (dollar, euro, pound) invested in employee compensation plus benefits: (Operating Revenue – Operating Expense) / Total Compensation

_




Metric


Human Investment Ratio

New Products & ServicesRevenue per FTE

• Location, line of business

• None

• None

• Location, line of business

• Number of (dollars, euro, pounds) of operating profit returned inflated by employee compensation) for every (dollar, euro, pound) invested in employee compensation plus benefits: Operating Revenue – (Operating Expense – Total Compensation)] / Total Compensation

• Corporate operating expense as a percentage of total operating expense: Operating Expense. Corporate / Operating Expense * 100

• Research and development expense as a percentage of total operating expense: Expense.R&D / Operating Expense

• Average new products and services operating revenue per full-time equivalent employee: Operating Revenue. New Products & Services / FTE

_

_

_

_

Financial Measures

Corporate Expense

Ratio

R&D Expense Ratio

Market Capitalization per FTE

• None • Market capitalization per full-time equivalent: Market Capitalization / FTE

_




Metric


Employee Ownership Rate

• None • Full-time equivalent employees who own company stock as a percentage of total full-time equivalent employees: FTE.Own Company Stock / FTE * 100

_

Employee StockOwnership Percentage

• None • Percentage of company stock owned by employees: Shares owned by employees / shares outstanding

_

Termination Value(Cost of Turnover)

• Total, employee-initiated, organization-initiate

• The average cost of terminations per full-time equivalent employee: (Terminations * Total Compensation) / FTE

_


• Average cost of sick leave per full-time equivalent employee:[(Unscheduled Absence.Sick Leave / Workdays) * Compensation] / FTE

_

(Dollar, euro, pound) Value of Disability per FTE


• Average cost of disability leave per full-time equivalent employee: [(Workdays lost for Disability / Workdays) * Compensation] / FTE

_

Financial Measures

Workforce Costs

(Dollar, euro, pound) Value of Sick Leave per FTE




Metric


Employee Satisfaction • Function, location, age, gender, ethnicity, occupational group, tenure, compensation band, performance rating, etc.

• A relative measure of the level of employee satisfaction:<Survey>

_

Employee Satisfaction



_



_

Employees at RiskFactor

• High potentials, high performers, key skills, occupational group, function


_




Metric


Customer-FacingEmployee Staffing Rate

• None • Full-time equivalent employees in customer-facing roles as a percentage of all full-time equivalent employees: FTEs.Customer-Facing / FTEs

_

Customer Contact

Customer-Facing TimeRatio

• Function, location, age, gender, ethnicity, occupational group, tenure, compensation band, performance rating, etc.

• Number of workdays devoted to customer-facing activities as a percentage of total workdays: Workdays.Customer-Facing / Workday

_

Revenue-GeneratingEmployee Staffing Rate

• Function, location, age, gender, ethnicity, occupational group, tenure, compensation band, performance rating, etc.

• Full-time equivalent employees in revenue-generating roles as a percentage of all full-time equivalent employees: FTEs.Revenue-Generating / FTEs

_



Workforce Availability Metrics

Metric


Attendance Rate• Function, line of business, location,

occupational group, employment status, employment type

• Average number of attendance days as a percentage of the total days available for work: Attendance / Workdays * 100

_

Attendance

Average Work Week • Function, line of business, location, occupational group, employment status, employment type

• Average number of hours worked per week per employee: (Hours Worked / Number of Weeks) / Headcount

_

Absence_

Unscheduled Absence Rate

• Function, line of business, location, occupational group, employment status, employment type

• Average number of unscheduled absence days as a percentage of total days available for work: Unscheduled Absence / Workdays * 100

_

Unscheduled Absenceper FTE


• Average number of unscheduled absence days per full-time equivalent employee: Unscheduled Absence / FTEs

_

Unscheduled AbsenceBreakdown


• Percentage of unscheduled absences due to sick leave, worker’s compensation, family leave, industrial dispute or other: Unscheduled Absence.[Type] / Unscheduled Absences

_



Workforce Mobility Metrics

Metric


Net Hire Ratio• Location, function, line of business,

ethnicity, gender, occupational group, employment type, etc.

• Number of external hires for every one terminated employee: Hires.External / Terminations

_

Recruitment

Employee Growth Rate • Location, function, line of business, ethnicity, gender, occupational group, employment type, etc.

• Number of hires into new positions for every one employee: Hires.New Positions / Headcount

_

External Hire Rate • Location, function, line of business, occupational group, employment type, job level

• External hires as a percentage of total hires: Hires.External / Hires * 100

_

External Rehire Rate • Location, function, line of business, occupational group, employment type, job level

• External rehires as a percentage of total external hires: Recruits.External.Rehire / Hires.External * 100

_

• Location, function, line of business, ethnicity, gender, occupational group, employment type

• Number of internal hires for every one external hire: Hires.Internal / Hires.External (Permanent)

_Recruitment Source Ratio




Metric


• Location, function, line of business, occupational group, employment type, job level

• Internal hires as a percentage of total headcount: Hires.Internal / Headcount * 100

_

Internal Movement

Internal Hire Rate • Location, function, line of business, occupational group, employment type, job level

• Internal hires as a percentage of total hires: Hires.Internal / Hires * 100

_

Upward Mobility • Location, function, line of business, ethnicity, gender, occupational group, employment type

• Promotions as a percentage of total movements: Promotions / Movements * 100

_

Lateral Mobility • Location, function, line of business, ethnicity, gender, occupational group, employment type

• Lateral movements as a percentage of total movements: Movements.Lateral / Movements * 100

_


• Demotions as a percentage of total movements: Movements.Demotions / Movements * 100

_Downward Mobility

Internal Movement Rate


• Movements between organizational units as a percentage of total movements: Movements.Between Org Units / Movements * 100

_Cross Business Unit Mobility




Metric



• Movements between functions as a percentage of total movements: Movements.Between Functions / Movements * 100

_

Career Path Ratio • Location, function, line of business, ethnicity, gender, occupational group, employment type

• Movements between functions as a percentage of total movements: Movements.Between Functions / Movements * 100

_

Promotions Rate • Location, function, line of business, ethnicity, gender, occupational group, employment type, gender, occupational group, employment type

• Number of employees internally promoted for every one employee internally transferred: Promotions / Transfers

_

Promotion Speed Ratio • Location, function, line of business, ethnicity, gender, occupational group, employment type

• Average number of years in a position prior to promotion: Position Tenure Prior to Promotion / Promotions

_

• Employee-initiated, organization-initiated, tenure, performance rating, high potential, high performer, occupational group, gender, ethnicity, age

• Terminations as a percentage of total employees: Terminations / Headcount * 100

_Termination Rate

Cross Functional Mobility

• Employee-initiated, organization-initiated, tenure, performance rating, high potential, high performer, occupational group, gender, ethnicity, age

• Percentage of terminations resulting from an employee-initiated action, an organization-initiated action, a transfer or expiration of a contract: Terminations.Reason / Terminations

_Termination ReasonBreakdown

Labor Turnover




Metric


• Location, line of business, function • Employees with two or more managers in a one-year period: Employees With Two or More Managers in a One-Year Period / Headcount

_

Career Path Ratio • Location, line of business, function • Number of employees returning from maternity leave for every resignation while on maternity leave: Maternity Returns / Maternity Resignations

_

Management Stability



Performance and Workforce Development Metrics

Metric


• Function, location, line of business, job level

• A relative measure of the quality of the managerial successor pool: <To Be Established>

_

Successor Pool Coverage


• Percentage of managerial positions with identifi ed successors: Managerial Positions.Successors / Managerial Positions * 100

_

IDP Prevalence Rate • Function, location, line of business job level

• Employees with an individual development plan as a percentage of total employees: Headcount.IDPs / Headcount * 100

_

• Function, location, line of business job level

• Relative measure of performance against individual development plans: <To Be Established>

_

• Function, location, line of business job level

• Relative measure of achievement against individual development plans: Headcount.IDP Goals Met / Headcount.IDPs

_IDP Achievement Ratio

Managerial Bench Strength


• Relative measure of gap between current and required skills for position: <To Be Established>

_Gap Between Current andRequired Workforce Skills

Development

Progress Against IDP Goals


• Return on investment realized from non-training (informal) development opportunities: <To Be Established>

_ROI on (Non-Training) DevelopmentInvestment




Metric


• N/A • Relative measure of individual managers’ track record in developing employees: <To Be Established>

_

Performance Appraisal Penetration

• Function, location, line of business • Employees whose performance is appraised as a percentage of total employees: Headcount.Performance Appraisals / Headcount * 100

_

Employee “Turnarounds”

• Function, location, line of business • Number of employees who turnaround their performance as a percentage of the total number of employees under review: <To Be Established>

_

• Function, location, line of business • Average number of employees downgraded during the most recent performance review: <To Be Established>

_

• Function, location, line of business • Relative measure of performance for employees in their first year of tenure: <To Be Established>

_New Hire Performance

Individual Managers’ Track Records forEmployee Development


• Relative measure of performance in leadership and managerial positions: <To Be Established>

_Management Performance

Development

Employee “Downgrades”

Performance




Metric


• Function, location, line of business • Percentage of critical jobs/roles occupied by below average performers: Headcount.Critical Role.Below Average / Headcount.Critical Role

_

Performance-Based Pay Prevalence

• Function, location, line of business • Relative measure of the prevalence of performance based pay: Employees.Pay is Performance Contingent / Employees * 100

_

• To Be Established • Percentage of total employees with performance ratings that received a given rating: <To Be Established>

_

Percentage of “Critical” Jobs/RolesOccupied by Below AveragePerformers

Development

Performance Rating Distribution

Performance



Workforce and Compensation Benefits Metrics

Metric


• Function, location, line of business, occupational group, tenure, performance rating, gender, ethnicity

• Average total compensation per full-time equivalent employee: Total Compensation / FTE

_


• Average direct compensation per full-time equivalent employee: Direct Compensation / FTE

_


• Direct compensation by type (base, overtime, bonus, incentives, etc.) as a percentage of total: Direct Compensation. Type] / Direct Compensation * 100

_

Total Compensation perFTE

Compensation

Compensation Breakdown

Direct Compensation perFTE


• Average (dollars, euro, pounds) of direct compensation paid to top performers for every (dollar, euro, pound) paid to mid or low performers: Direct Compensation. Top Performers / (Direct Compensation. Mid Performers + Direct Compensation. Low Performers)

_Overtime Rate

• Function, location, line of business, occupational group

• A relative measure of the level of competitiveness of compensation packages: <To Be Established>

_Performance-Based PayDifferentials


• Average number of (dollars, euro, pounds) of total compensation paid or equivalent (dollar, euro, pound) of market compensation: Total Compensation / Market Compensation

_CompensationCompetitiveness Factor




Metric



• A relative measure of the level of employee satisfaction as it relates to compensation packages: <To Be Established>

_


• Average benefits expense per full-time equivalent employee: Benefits Expense / FTE

_


• Benefits expense as a percentage of total compensation: Benefits Expense / Total Compensation * 100

_

Employee Satisfaction withCompensation Packages

Benefits Compensation Factor

Benefits Expense per FTE


• Benefits expense by type as a percentage of total benefits: Benefits Expense. [Type] / Benefits Expense * 100

_Benefits Expense Type Breakdown(Benefit Expense Rate)


• A relative measure of the level of competitiveness of benefits packages: <To Be Established>

_BenefitsCompetitiveness


• A relative measure of the level of employee satisfaction as it relates to benefits packages: <To Be Established>

_Employee Satisfactionwith Benefits Packages

Benefits




Metric


• Line of business, job level, occupational group

• A relative measure of the level of employee satisfaction as it relates to compensation packages: <To Be Established>

_


• Average benefits expense per full-time equivalent employee: Benefits Expense / FTE

_


• Benefits expense as a percentage of total compensation: Benefits Expense / Total Compensation * 100

_

Average Vacation Utilized

Benefits Compensation Factor

Benefits Expense per FTE


• Benefits expense by type as a percentage of total benefits: Benefits Expense.[Type] / Benefits Expense * 100

_Benefits Expense Type Breakdown(Benefit Expense Rate)


• A relative measure of the level of competitiveness of benefits packages: <To Be Established>

_BenefitsCompetitiveness


• A relative measure of the level of employee satisfaction as it relates to benefits packages: <To Be Established>

_Employee Satisfactionwith Benefits Packages

• Line of business, job level, occupational group

• Vacation time utilized as a percentage of total vacation time entitlement: Vacation Utilized / Vacation Available * 100

_Average Vacation Utilized




Metric


• Line of business, location, function • Percentage of total employees participating in collective bargaining agreements: Employees Belonging to Unions / Total Headcount

_

• Line of business, location, function • The average number of grievances per employee: Grievances / Headcount

_

Organized Labor Rate

Grievance Factor



HR Operational Profile Metrics

Metric


• Location, line of business • Number of full-time equivalent employees for every one human resources full-time equivalent employee: FTE / HR FTE

_

• Location, line of business • Human resources full-time equivalent employees as a percentage of total full-time equivalent employees: HR FTE / FTE * 100

_

• Location, line of business • Percentage of human resources FTEs in the areas of recruiting, training, payroll, compensation & benefits, and health and safety as a percentage of all HR FTEs: HR FTE [Function] / HR FTE * 100

_

HR Staffing Ratio

HR Staffing Breakdown

HR Staffing Rate

• Location, line of business • Number of human resources clerical and operative full-time equivalent employees for every one human resource managerial and professional full-time equivalent employee: HR FTE. Clerical & Operative / HR FTE. Managerial & Professional

_HR Staffing Mix Ratio

• Location, line of business, tenure, performance rating, gender, ethnicity

• Measure of upward mobility with the HR function: HR Promotions / HR Headcount * 100

_HR Promotions Rate

Staffing




Metric


• Location, line of business, tenure, performance rating, gender, ethnicity

• Measure of total movements within the HR function: (HR Promotions + HR Lateral Moves) / HR Headcount * 100

_

• Location, line of business • Human resources expense as a percentage of total operating expense: HR Expense / Operating Expense * 100

_

• Location, line of business • Average human resources expense per full-time equivalent: HR Expense / FTE

_

HR Mobility Rate

HR Expense per FTE

HR Operating Expense Rate

• Location, line of business • Human resources expense by type as a percentage of total human resources expense: HR Expense.[Type] / HR Expense * 100

_HR Expense Type Breakdown

• N/A • HR transactions available via self-service as a percentage of the total number of HR transactions: HR Transactions Available via Self-Service / Number of HR Transactions * 100

_Employee Self-Service Availability Rate

Financial

Employee Self Service

• N/A • HR transactions conducted via self-service as a percentage of the total number of HR transactions: HR Transactions Conducted via Self-Service / Number of HR Transactions * 100

_Employee Self-Service Penetration Rate




Metric


_

• Location, line of business • HR customers satisfied as a percentage of total HR customers: HR Customers.Satisfied / HR Customers * 100

_

• N/A • Relative measure of the productivity of individual human resources employees:<To Be Estab lished>

_Productivity of Individual HR Employees

HR Customer Satisfaction Rate

• N/A • Relative measure of the return on investment generated by the human resources function: <To Be Established>

_Aggregate ROI of HR Function

• None • Payroll expense as a percentage of total operating expense: Payroll Expense / Operating Expense * 100

_Payroll Expense Rate

Performance

Financial

• None • Average payroll expense per pay processed: Payroll Expense / Pays Processed

_Payroll Expense per Pay

• None • Number of errors as a percentage of pays: Number of Errors / Number of Pays * 100

_Payroll Error Rate

Error Rate



Staffing Function Metrics

Metric


• Location, line of business • Recruitment expense as a percentage of HR expense: Recruitment Expense / HR Expense

_

• N/A • Recruitment expense by type (Travel, Advertising, Compensation, Other) as a percentage of total recruitment expense: Recruitment Expense.[Type] / Recruitment Expense * 100

_Recruitment Expense Breakdown

Recruitment Cost Rate

• N/A • Average recruitment expense per hire: Recruitment Expense / Hires

_Recruitment Cost per Hire

• None • Relative measure of costs per hire by various permutations: <To Be Established>

_Cost per Hire Permutations

Investment

• Location, line of business, job level, occupational group

• Number of hires receiving a sign-on bonus as a percentage of total hires: Hire.Receiving Sign-On Bonus / Hires

_Percentage of Hires ReceivingSign-On Bonus


• Average sign-on bonus per employee receiving a sign-on bonus: Expense.Sign-On Bonus / Hire.Receiving Sign-On Bonus

_Sign-On Bonus per Employee


• Average sign-on bonus per employee receiving a sign-on bonus: Expense.Sign-On Bonus / Hire.Receiving Sign-On Bonus

_Sign-On Bonus per Employee




Metric



• Retention of employees receiving a sign-on bonus:<To Be Established>

_


• Measures how closely talent is delivered by the required date: Total Days (+ or –)Deviated from Needed-By Date / Hires

_On-Time Talent Delivery

Retention After Sign-On Bonus

• N/A • Average calendar days to start an employee in a vacant position: Days to Start / Hires

_Time to Start

• Location, line of business, function, occupational group

• Average calendar days to fi ll a vacant position: Days to Fill / Hires

_Time to Fill


• Average days from requisition being raised to when it is posted: Days from Requisition to Posting / Requisitions

_Requisition Response


• Percentage of applicants that are converted to a new hire: Applicants / Hires * 100

_Applicant Conversion Rate


• Number of interviews required to generate a new hire: Interviews / Hires * 100

_Interview Conversion Rate

Effectiveness Productivity


• Average calendar days to fi ll a vacant position with an internal hire: Time to Fill.Internal / Hires.Internal

Internal Time-to-Fill Ratio




Metric



• Referrals hired as a percentage of total referrals: Referrals Hired / Referrals * 100

_


• Offers accepted as a percentage of offers extended: Acceptances / Offers

_Offer Acceptance Ratio

Referral Conversion Rate


• External acceptances as a percentage of external offers: Acceptances.External / Offers.External * 100

_External Acceptance Rate


• Positions filled with the top choice candidate as a percentage of new hires: Top Candidate Hires / Hires * 100

_Top Candidate Acceptance Rate

• None • Relative measure of line managers’ satisfaction with new hires:<To Be Established>

_Line Manager Satisfactionwith New Hires

• None • Relative measure of the level of satisfaction of line managers with the recruiting process: <To Be Established>

_Line Manager Satisfaction with Recruiting

• None • The average number of new hires that turn over within a given time frame (e.g., 6 months, 12 months): New Hires.Early Departure / New Hires

_New Hire Failure Factor

Effectiveness Quality




Metric



• A relative measure of the recognition among potential recruits of the organization as a desirable place to work: <To Be Established>

_Employment Brand Strength



Staffing Training Function

Metric



• Referrals hired as a percentage of total referrals: Referrals Hired / Referrals * 100

_


• Offers accepted as a percentage of offers extended: Acceptances / Offers

_Training Expense as a Percentageof Operating Expense

Training Expense Rate


• External acceptances as a percentage of external offers: Acceptances.External / Offers.External * 100

_Training Investment per Employee


• Positions filled with the top choice candidate as a percentage of new hires: Top Candidate Hires / Hires * 100

_Training Days per Employee

• None • Relative measure of line managers’ satisfaction with new hires:<To Be Established>

_Training Cost Factor

• None • Percentage of fully trained employees: Employees Completing All Courses for Position / Total Employees to Be Trained

_Training Penetration Rate

• None • Quality of delivered training content: <To Be Established>

_Quality of Delivered Training Content

Investment

Effectiveness




Metric


• None • ROI of training: <To Be Established>

_ROI of Training

Investment




Metric


• None • Health and safety expense per full-time equivalent employee: H&S Expense / FTE

_

• None • Workers compensation premium expense per full time equivalent employee: Workers Compensation Premium / FTE

_H&S Premium per FTE

H&S Expense per FTE

• None • Health and safety expense by type (preventive, rehabilitation, compensation, other) as a percentage of total H&S expense: H&S Expense [Type] / H&S Expense

_H&S Expense Breakdown

• None • Health and safety incidents (lost time, deaths, injuries and diseases) for every 100 full-time equivalent employees: (H&S Incidents / FTE) * 100

_H&S Incidents per 100 FTEs

• None • Health and safety incidents (lost time, deaths, injuries and diseases) for every one million hours worked: (H&S Incidents / H&S Hours Worked) * 1,000,000

_H&S Incidents per One Million Workhours

• None • Health and safety incidents by type as a percentage of total health and safety incidents: H&S Incidents.[Type] / H&S Incidents * 100

_H&S Incident Type Breakdown

Investment

Incidents




Metric


• None • Average working days lost per health and safety incident: Working Days Lost / H&S Incidents

_Average Time Lost per H&S Incident

• None • Average number of incidents per site: H&S Incidents / Total Number of Sites

_H&S Incidents per Site

• None • Health and safety incidents that did not result in any lost time for every 100 full-time equivalent employees: H&S Incidents. No Working Days Lost / FTEs * 100

_H&S Incidents with No Time Lostper 100 FTEs

• None • Health and safety incidents that resulted in an extended absences from work as a percentage of total health and safety incidents: H&S Incidents. Greater Than 60 Days Lost / H&S Incidents * 100

_H&S Incident Severity Rate


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