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The Significance Of The HR Scorecard

Dec 5, 2007
The HR scorecard is of much import when it comes to measuring just how effective the HR department of a certain company is. This is indeed something no HR department should be without. However, it is quite difficult to quantify the aspects and functions of the HR department just to determine how effective the whole department is.

Coming up with the aspects to be quantified and included on the scorecard is just the first of many steps to take. Any ordinary person would think that the logical step to identifying these aspects would be to compile whatever quantifiable aspect he can come up with onto the scorecard.

Any HR personnel would actually wish the process were as simple as that. The correct approach would actually be to take a step back and look at the elements of the scorecard as objectively as possible. Do not just include elements that are easy to quantify because this would totally defeat the purpose of coming up with a scorecard.

However, as complicated as this first step might be, it is still far from being the simplest step. This is because it is actually more difficult to maintain the framework of the HR scorecard than coming up with a stable one.

The maintenance of the scorecard's framework actually requires constant updating. The business world is ever changing, influenced by so many aspects that, in turn, also influence the income flow of the business itself. In this step, there is the constant need to review the company's existing scorecard, to make sure the variables being measured are still relevant to the company itself as a whole. With changes being inevitable in the equation, there might be variables in the scorecard that no longer need to be measured.

Updating the scorecard here would mean weeding out these unnecessary variables out of the framework altogether. Of course, the weeded out variables would not be thrown out of the equation forever. They would just be taken out and set aside for safekeeping. Just as the need for these variables has disappeared, there just might be a need to include them in the scorecard framework sometime in the future. It is always better to have all bases covered, since HR metrics is indeed quite hard to quantify.

Another important thing to remember about the HR scorecard is that you don't really have to include all quantifiable elements into a single scorecard. The scorecard can come in multiple layers as well. In fact, the more reliable scorecards actually come in a number of layers. The typical hierarchy that you would find in an HR scorecard consists of four layers. The first layer is comprised of a relevant connection between values-based HR metrics and corporate-based metrics.

The connection would then exhibit measures that are value-based. The second layer is comprised of HR outcome measures which place much attention on business outcomes. The third layer consists of operational HR metrics that are centered on efficiencies. The fourth layer is then made up of HR analytics that has its focus on the workforce of the company itself.
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