Creating your HR scorecard the right way
What are HR KPIs?
Key performance indicators used by HR managers and most professionals in HR departments include variety of metrics and examples. They range from typical or standard HR KPIs like employee retention and recruiting cost to more cross functional metrics which not only indicate the HR performance but also the overall business organization performance like indicators related to overall business knowledge management, career development, education, training and talent management.
The point is that a solid and effective HR dashboard should include both the traditional metrics for human resources and strategic and tactical cross functional metrics. This ensures that your HR scorecard fits into the overall strategy set by your company.
The balanced scorecard is a good example and can be used for brainstorming the ideal HR KPIs and HR metrics for your organization.
The balanced scorecard can be used first to define the business strategy and link the financial and non financial metrics (including human resource metrics) and it also can be useful to get ideas for bon traditional HR metrics which are cross functional and directly linked not only to the bottom of the scorecard (learning and growth) but also to the other three perspectives.
For example, ask yourself what HR metrics are relevant to the financial performance of the company, what HR metrics and KPIs have direct impact on the business processes and productivity and the customer perspective like linking employee skills and satisfaction to customer value and customer satisfaction index (in this example periodic customer surveys and employee surveys can be used for benchmarks and monitoring the trend).
The number one priority should always be to consider the strategic perspective because this gives you the direction for your focus. Many tactical HR measures can be easily added at any time.
Typically the strategic point of view targets the dimension of the performance associated with main strategic HR objectives. For example, the company strategy needed significant company shift initiatives since the company experienced important restructuring. Within this framework, the business change direction ability is a important ingredient in the failure or success of performance.
Consequently, gauging the capability of the company to handle transformation efficiently may be the primary way of measuring the efficiency of HR and is an important tactical factor.
Operational viewpoint — the functional responsibilities where HR should succeed. This particular part of the HR KPI scorecard offers solutions to issues concerning the performance in managing HR which are essential to the business.
Monetary View — this particular point of view attempts to get suggestions associated with typically the financial metrics that will show exactly how people as well as HR create benefit for the business.
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