Constructing The HR Scorecard

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4 Dimensions

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1
Lead indicators

The High-Performance Work System

HR System Alignment HR Efficiency (policy implementation)
Lag indicators

2 3

HR Deliverables (employee behavior)

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Examples of HPWS Measures

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How many exceptional candidates do we recruit for each job opening? What % of the workforce is regularly accessed via formal performance appraisal? What proportion of merit pay is determined by formal PA?

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HR system Alignment

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Strategy implementation model specifies needed competencies and employee behavior model.
HR system could be geared towards these competencies and behavior.

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return

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Increase sales by 10%

Increase in no of sales people or make the existing workforce more competent

Recruitment or Training

HR efficiency

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Efficiency Metrics
Core efficiency
no direct contribution to firms strategic implementation
(not directly influencing HR deliverables)

Strategic Efficiency Measures

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HR scorecard
Focuses on leading indicators

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Distinguishes between HR doables and deliverables Encourages flexibility and change

Enables to control cost and value Helps HR managers to effectively manage their strategic responsibilities
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Cost Benefit Analyses

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Attributes
Strategic importance Financial significance

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Widespread impact
Focus on key issue, problem, or decision facing line managers

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Determining ROI
Identifying Costs Identifying Benefits Calculating ROI

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Cost Benefit Analysis A Hierarchy of Approaches

LEVEL
1 2
Benefit Cost Calculation Estimates estimates

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Freque ncy Never

Intuition

Intuition

None

Intuition

Good

Payback, Breakeven NPV

Irregular

Good

Good

regular

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