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Jon Ingham
Introduction
The HR Scorecard can provide a very useful framework for measuring HR. It can also seriously confuse HR strategy development, and communication of this strategy with business stakeholders. The difference between these two results comes down largely to the perspectives that are chosen to form the scorecard. This presentation explains why the HR scorecards four perspectives need to be: Input, Activity, Outcome and Business Impact if the scorecard is going to become a valuable management tool.
Customer
Measures how well the organisation is managing risk and protecting its assets Measures the efficiency and effectiveness of the service capability provided by the organisation
Financial
TARGET
35% 85% 90% 9
FINANCIAL MEASURE
1. INCOME PER EMPLOYEE 2. % OF ALLOCATED COST FOR WHICH THERE IS A SERVICE LEVEL AGREEMENT IN PLACE 3. % NON DEAL BASED COSTS 4. VALUE OF PIPELINE 5. % OF REVENUE FROM TARGET INDUSTRY SECTORS
MEASURE
1. NUMBER OF TRANSACTIONS WITH MULTIPRODUCT SOLUTIONS /COMPONENTS FROM OTHER LINES OF BUSINESS 2. % OF JOINT ORIGINATIONS 3. % OF DEALS MEETING QUALITY STANDARDS 4. % OF DEALS WHERE QUALITY REVIEW PROCESS HAS BEEN CARRIED
TARGET
50 55% 90% 95%
PEOPLE MEASURE
1. % OF STAFF WITH BROAD SECTOR EXPERIENCE
TARGET
50% 12% 85% 100% 85%
2. STAFF TURNOVER RATE 3. %OF STAFF WHO ARE MOTIVATED AND COMMITTED TO THE DIRECTORATE 4. % OF STAFF WHO HAVE A PERSONAL DEVELOPMENT PLAN 5. % OF STAFF WHO BELIEVE THAT THEIR COLLEAGUES LIVE THE VALUES OF THE BANK
Perhaps increasing market share will or maybe enhancing new product result in increased profits, thus development will directly increase both providing funds for increasing new profits and market share ... product development ...
or does increasing profits allow us to buy market share by stepping up advertising and new product development?
Customer
Partner Effectively with Customer to Fulfil Demand Enhance Portfolio of Goods & Services ahead of Competitors
Internal processes
People
Some Organisations put all their HR Objectives / Measures in Learning & Growth
Customer
Financial
And just doing this can be useful as it integrates HR into the Business
Source: Tesco
HR effectiveness HR efficiency
Financial
Customer
Strategic Skills
Leadership
Culture
Alignment
Learning
Leadership Development
Culture
HR Systems
HR Climate
The problem is that the categories, which were intended to be used to describe how all of the elements of firm success contribute to the bottom line, dont work well when we are interested in highlighting the contribution of the workforce.
Source: Becker and Huselid
To get round the problem, Becker and Huselid suggest another HR Scorecard
HR Delivery
HR Efficiency
HR System Alignment
HPWS
Workforce Success
Workforce Competence
HR consultant Paul Kearns says the Scorecard risks inflicting a complicated solution on a relatively simple problem. He writes off the case study material as unintelligible to anyone without a degree in astro-HR and, ultimately, unconvincing. It is academics going berserk trying to analyse things to the nth degree, he says.
Or more simply
Outcomes vs Activities
I wanted to define the roles of HR as outcomes HCM Activities more than activities. I saw a lot of work in HR focused on activities (number of hours of training a leader receives; whether a firm is using 360 degree feedback; if it implements performance based pay or competence based hiring). I wanted to shift the focus to outcomes of the activities.
Outcomes vs Activities
The outcomes or targets of HR work: HCM Activities Individual ability Competence Commitment Contribution
Outcomes vs Activities
Measuring the value of such intangible assets is the holy grail of accounting If managers could find a way to estimate the value of their intangible assets, they could measure and manage their companys competitive position much more easily and accurately.
The HR / HCM Strategy Map and Business Strategy are the same thing!
HCM Value Chain
Business strategy map
Business process
Customer
Financial
Input
Activity
Outcome
Business impact
Kirkpatrick
Results
Outcome
Activity
Performance
Reaction Learning
Input
Output
Activity Impact
Input
strategic-hcm