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THE CASE FOR HR MEASUREMENT 1. Performance measurement has become a critical issue for human resource (HR) professionals, and is set to further grow in importance. This is the result of HR departments increasingly being asked to demonstrate the value they deliver to the organizations they serve. 2. Increasing numbers of HR functions are implementing 'balanced' performance measurement frameworks, most notably the balanced scorecard, as a way to monitor and communicate the value they deliver business-wide. 3. This introduction to the HR Scorecard will show that the HR function is under ever-increasing pressure to demonstrate the value it provides organization-wide. This 'value' has both an 'efÞciency' component (eg, the cost of HR services) and an effectiveness component (eg, the effect on performance of HR programmes and practices). 4. Research from a leading HR consultancy Þnds that improvement in certain HR practices correlates with a signiÞcant rise in the market value of the organization. This section argues that by it is people that deliver business success, not business strategies. Therefore managing human capital has become a key focus for organizations. 5. Linked to the above, we will explain that the management of human capital provides HR professionals with an opportunity to add signiÞcant value to their organizations. However, HR leaders are not necessarily accepting the challenge. 6. A value-adding HR function has Þve key elements, each of which should ideally be captured within an HR Scorecard: - being business-focused - providing proactive HR solutions - ensuring employees are 'engaged' in the delivery of business strategies - being operationally excellent - becoming Þnancially aware. 7. A case study on the Denmark-headquartered plastics manufacturer Borealis shows best practice in creating an HR Scorecard that aligns HR performance with the strategic goals of the organization. If you are a subscriber, click here to read the full briefing. Click here to find out how to subscribe. |
