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HR Scorecard.pptx
- 1. 1 visit: www.exploreHR.org HR ScoreCard By Dr. Bhagawan Chandra Sinha
- 2. 2 visit: www.exploreHR.org 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
- 3. 3 visit: www.exploreHR.org 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.
- 4. 4 visit: www.exploreHR.org Five stepsto create an HR scorecard Create HR strategy map Identify HR deliverables Develop HR policies, processes, and practices Align HR systems Create HR efficiencies
- 5. 5 visit: www.exploreHR.org Create anHR 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?
- 6. 6 visit: www.exploreHR.org Drive Longterm 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
- 7. 7 visit: www.exploreHR.org Financial- Drive Longterm 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
- 8. 8 visit: www.exploreHR.org Internal customers HRScorecard Strategic Objectives Key Performance Indicators • 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
- 9. 9 visit: www.exploreHR.org Internal Business/process-HR Scorecard Strategic Objectives Key Performance Indicators 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
- 10. 10 visit: www.exploreHR.org Internal Business/process- HRScorecard Strategic Objectives Key Performance Indicators 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
- 11. 11 visit: www.exploreHR.org Learning &Innovation- HR Scorecard Strategic Objectives Key Performance Indicators 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
- 12. 12 visit: www.exploreHR.org 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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- 14. 14 visit: www.exploreHR.org Template :KPI Table for HR Manager
- 15. 15 visit: www.exploreHR.org Template :KPI Table for HR Manager Key result areas are the main goals that HR manager needs to accomplish. In this sample, we have four key result areas.
- 16. 16 visit: www.exploreHR.org Template :KPI Table for HR Manager • 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.
- 17. 17 visit: www.exploreHR.org Template :KPI Table for HR Manager Weight of each KPI should be defined. Weight of KPI is determined based on the scale of priority. Total weight should be 100.
- 18. 18 visit: www.exploreHR.org Template :KPI Table for HR Manager Targets are defined based on historical data and future expectations. Targets can be percentage, number, or score – depending on the type of KPIs.
- 19. 19 visit: www.exploreHR.org Template :KPI Table for HR Manager Actual is the actual results. Or target achievements. We should develop reporting system to capture these results.
- 20. 20 visit: www.exploreHR.org 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
- 21. 21 visit: www.exploreHR.org 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.
- 22. 22 visit: www.exploreHR.org Align HRsystems • 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.
- 23. 23 visit: www.exploreHR.org Create HRefficiencies • 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.
- 24. 24 visit: www.exploreHR.org Create HRefficiencies • 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.