HR SCORECARD

Presented By

ADEEL TARIQ

MOBASHIR ALI

SEQUENCE Introduction Tangible Vs Intangible Assets Tracking HR Effectiveness Effective HR Measures Balanced Scorecard HR Deliverables Lagging Indicators Leading Indicators HR Scorecard Creating HR Scorecard HR Dashboard Conclusion

INTRODUCTIONNew economic paradigm characterized by Speed,

innovation, quality and customer satisfactionEssence of competitive advantage shifted from

tangible to intangible assetsFocus on human capital and its effective alignment

with overall organizational strategyHR Scorecard measurement/ evaluation system for

redefining the role of HR as a strategic partnerBased on Balanced scorecard developed by Kaplan

and NortonHR transformed from administrative to strategic roleChallenge for managers to make HR a strategic

assetHR scorecard is a lever that enables managers to do

so

TANGIBLE VS INTANGIBLE ASSETS

WHY TRACK HR EFFECTIVENESS? To Guide Decision Making

It helps HR staff in how best to manage the HR system to support the company.

To Evaluate Program/Department Effectiveness

It constitutes a “report card” to guide improvement efforts.

EFFECTIVE HR MEASURES Identify a clear, consistent, and compelling

connection between the company’s strategy and the work of each employee.

Focus on the critical few measures that have the greatest impact on the company’s bottom line.

Document the effects of HR on company performance in credible ways that

employees, line supervisors, and managers can understand.

BALANCED SCORECARD

Kaplan and Norton model (1996)Customer perspective

Corrective activityDevelopmental activityBalancing compliance

with added value

BalancedScorecard

Financial MeasuresKey performance ratios

Financial healthBalancing leading with

trailing indicatorsLearning and growth

People measuresKnowledge measures

Balancing soft andhard indicators

Business ProcessesDrumbeat

Time, cost, qualityBalancing inputs

and outputs

HR Function

Fits Here as

HR Deliverables

HR DELIVERABLES HR Performance Drivers

Determines the results Unique to the firm Identification and direct integration into

performance criteria e.g employee productivity

HR Enablers

Reinforce the core performance drivers Strategy implementation impossible

without properly aligned enablers For employee productivity enabler could be

training

LAGGING INDICATORS Lagging indicators are outcome measures

that help you gauge your HR progress by examining the final end result or outcomes of your collective efforts.

Use of the “lagging” term reflects the delay or gap between your actions and a change in the final end result.Non-HR Example

Economy — GNP growth, national debt, unemployment rate, etc.

HR Examples Employee retention. Employee performance. Employee productivity.

LEADING INDICATORS Leading indicators are process measures that help

you gauge incremental progress you are making toward key HR outcome (lagging) measures.

Since leading indicators measure the results from your processes, there is less of a delay between your actions and a change in the system.

They are the performance drivers — the key factors that enable the overall end result (outcome) you want to achieve.

Non-HR ExamplesEconomy — capital equipment

purchases, layoffs, stock market value, public confidence, exchange rates, etc.

HR ExamplesA reduction in absenteeism in key

positions.% increase in internal people

expressing interest in position

HR SCORECARD• Measures effectiveness and efficiency of HR functions in producing the employees behaviors required to achieve organizational strategic aims

Focuses on leading indicators

Identifies the differences between HR doables and HR deliverables

Demonstrates HR’s contribution to strategy implementation and to the company’s bottom line

Helps HR managers focus on and manage their strategic responsibilities

Encourages HR flexibility and change.

CREATING HR SCORECARD

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Outline value chain activities

Define the business strategy

Outline a strategy map

Identify strategically required outcomes

Identify required workforce competencies and behaviors

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Create HR Scorecard

Identify required HR policies and activities

Choose HR Scorecard measures

Summarize Scorecard measures on digital dashboard

Monitor, predict, evaluate

The 10-Step HR Scorecard Process

OUT LINE VALUE CHAIN AND STRATEGY MAP

Value chain analysis A tool for identifying, isolating, visualizing,

and analyzing the firm’s most important activities and strategic costs

Identifying the primary and crucial activities that create value for customers and the related support activities

Strategy Map A diagram that summarizes the chain of major inter

related activities that contributes to a company's success

STRATEGY MAP

IDENTIFYING WORK FORCE REQUIREMENTS AND STRATEGIC OUTCOMES

IDENTIFYING COMPETENCIES, SYSTEMS, PRACTICES

HR SystemsAlignment with StrategyInternal HR Alignment

Matching HR Strategy to Company Culture

HR Strategic Focus

HR CompetenciesOperational Efficiency

High Performance Work SysEmployee RelationsStrategy Execution

HR PracticesRecruitment & Selection

Employee OrientationPerformance MeasurementTraining & Development

HR DeliverablesHigh Employee SatisfactionHigh Customer SatisfactionLow Key Staff Turnover

Knowledge Growth

CREATE HR SCORECARD

NOT CLEAR WHAT TO ADD HERE

NEED YOUR INPUT

HR SCORECARD MEASURES Review existing measures and identify their

strengths and weaknesses

Identify corporate goals and HR’s contribution toward these goals

Create a customer diagram and list of results HR produces to support the organization

Define measures for each result

Define levels of goals for each measure

Define two tracking reports to communicate actual vs. planned performance.

HR DASHBOARD“A picture is worth a thousand words” sums up

the purpose of HR Dashboard.

An HR Dashboard presents the manager, via a PC desktop screen containing graphs and charts , with a bird’s eye view of how the HR management function is doing

Summarizes how core measures from HR scorecard are doing

SUMMARIZING MEASURES ON DASHBOARD

QWL Score

Core Values

Overall Job Satisfaction

CONCLUSIONHR Scorecard Enables Managers to

Understand how to Align HR Strategy with Overall Business Objectives

Tracking and Performance Evaluation Of Business Strategies

HR Scorecard a Tool to Ensure Continued Learning and Change Management

THANKS