HR Scorecard.pptx

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visit: www.exploreHR.org
HR Score Card
By
Dr. Bhagawan Chandra Sinha

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HR Scorecard
• HR scorecard is a performance measurement tool of
strategic role of HR function or HR leaders of the
organization.
• One of the key problems that HR has been facing in the
past decades is the perception that HR doesn’t add
strategic value to the organization.
• Indeed, head of HR function do not get a seat in the
board table in some organizations.
• The HR scorecard is a strategic HR measurement system
that helps to measure, manage, and improve the strategic
role of the HR department

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HR Scorecard
• The HR scorecard is meant to measure leading
HR indicators of business performance.
• Leading indicators are measurements that
predict future business growth and are called
HR deliverables.
• They are also known as HR Metrics, and more
specifically HR KPIs, as they are metrics that
are linked to the business strategy.

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Five steps to create an HR scorecard
Create HR strategy map
Identify HR deliverables
Develop HR policies, processes, and
practices
Align HR systems
Create HR efficiencies

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Create an HR Strategy Map
• To identify how HR can connect to this business
outcome, one can create a strategy map.
• The strategy map helps to identify how HR is
driving business outcomes.
• The question is- what HR practices drive the
strategic goals of the company?

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Drive Long term
Shareholder Value
Enhance ROI of HR Strategic
Initiatives
Develop Internal HR
Capabilities
Develop Strategic
Employee
Competencies
Deploy HRIS System
HR Strategy Map
Financial
Internal
Customers
HR Internal
Process
Learning
Create Positive Work
Environment
Enhance “Internal
Customer” (Employee)
Satisfaction
Enhance Employee
Productivity
Apply Excellent
Recruitment
Process
Optimize
Performance
Management System
Implement Best
Talent Management
Practices

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Financial-
Drive Long term
Shareholder Value
HR Scorecard
Strategic Objectives Key Performance Indicators
• Shareholder value
• Shareholder value growth
• ROI of HR Strategic Programs
and Initiatives
Enhance ROI of HR
Strategic Initiatives
Enhance Employee
Productivity
• Profit per Employee
• Revenue per Employee

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Internal customers
HR Scorecard
• Ranking in “Best Place to Work Annual
Survey” (conducted by Fortune
Magazine)
• % of Employee Turn Over
• Employee Satisfaction Index
Create Positive
Work Environment
Enhance “Internal
Customer” (Employee)
Satisfaction

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Internal Business/process- HR Scorecard
Develop Strategic
Competencies
Apply Excellent
Recruitment Process
• Average lead time to recruit employees
• Recruiting cost per employee
• Performance of new recruits during the
first two years of employment
• Average lead time to develop strategic
competencies
• Average lead time to close strategic
competencies gap
• % Of strategic competencies available
within the organization

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Internal Business/process-
HR Scorecard
Optimize Performance
Management System
Implement Best Talent
Management Practices
• Number of qualified talents per
strategic positions
• Progress of talent development plan
(actual vs. Plan)
• % of senior managers who have been
promoted internally
• Average competency assessment
scores
• Number of performance feedback
session conducted per year

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Learning & Innovation-
HR Scorecard
Develop Internal HR
Capabilities
Deploy HRIS System
• % of HR executives who develop
individual development plan
• % of HR executives who fully execute
their individual development plan
• Progress of HR Portal
Implementation (actual vs. plan)
• Accuracy Level of HR Database

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HR Deliverables
• To measure strategic outcome, HR
deliverables or KPIs are created.
• For example, the lead time is measured as
the ‘time to hire in days’, which is currently
38, but has to be decreased to 25, a 34%
improvement hiring days.
• Using this strategy map and HR scorecard,
the company now capable of identifying
leading measurements for business success

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Template
“Performance
Scorecard
Table” for HR
Manager

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Template : KPI Table for HR Manager

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Key result areas are the
main goals that HR
manager needs to
accomplish. In this sample,
we have four key result
areas.

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• Key performance
indicators are
measurable indicators
used to evaluate your
performance level
• Every Key Result Areas
must have at least one
KPI.
• Total number of KPIs
shoud be 8 – 10 items.

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Weight of each KPI
should be defined.
Weight of KPI is
determined based
on the scale of
priority. Total weight
should be 100.

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Targets are
defined based
on historical
data and
future
expectations.
Targets can
be
percentage,
number, or
score –
depending on
the type of
KPIs.

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Actual is the actual
results. Or target
achievements.
We should develop
reporting system to
capture these results.

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HR Policies, Processes & Practices
• Policies: A strong employer branding policy will help in
building a strong reputation that will help in becoming a top
employer
• Processes: Key to decreasing lead time will be an
optimization between how recruiters and managers
communicate.
• Often, managers take a long time to review resumes and
plan interviews with candidates and changing these slow
processes into workflows that guarantee next-day action, can
decrease the time to hire with days, sometimes weeks.
• This is one of the many processes that can be implemented
to enable better performance on the HR deliverables.
• The candidate experience will be vital to attracting top
candidates and in ensuring a good rating in the top

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HR Policies, Processes & Practices
• Practices: There are few practices that help HR
achieve the deliverables.
• The idea here is that HR should create a
number of High-Performance Work Systems
(HPWS).
• An HPWS is a group of separate but
interconnected HR practices designed to
enhance effectiveness.
• Electronic human resource management ( e-
HRM) is tool that can be an effective tool or
practice.

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Align HR systems
• It is about aligning the different HR practices to
create synergy.
• For example, the employee branding efforts should
focus on the type of workers that the employer is
actually looking for.
• In addition, decreasing lead time by rushing through
the process may lead to a lower quality of hire,
resulting in a mismatch between what HR is doing,
and some of the goals it tries to achieve.
• All policies, process and procedure should align with
principal HR strategy.

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Create HR efficiencies
• Efficiency is hallmark of success of business or a business
function.
• Traditionally, HR has focused a lot on creating
efficiencies.
• It can reduce cost or increase productivity to increase
bottom line of business.
• Continuous training and feedback can enhance HR
efficiencies.
• When it comes to creating an HR scorecard, some
efficiencies have to be thrown out of the window.
• The simple reason here is that to get, for example, a higher
quality of hire, your cost to hire someone might go up.

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Create HR efficiencies
• The simple reason here is that to get, for example,
a higher quality of hire, your cost to hire someone
might go up.
• In our example, the quality of hire is a strategic
HR measurement.
• Investing money into increasing the quality of hire
is well worth it.
• This justifies investments in assessments, employer
branding projects, and other HR initiatives that
boost the main HR deliverables.

HR Scorecard.pptx

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