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Understanding HR Scorecards in Organizations

HR scorecards are tools that measure how well the HR function aligns with an organization's strategic goals. They provide metrics on the costs and benefits of HR processes like recruitment, training, and retention. This allows organizational leaders to evaluate whether HR activities are delivering value and achieving business objectives. Specifically, scorecards track costs against outcomes like employee performance or customer satisfaction to assess the return on investment of HR initiatives. By quantifying the impact of HR, scorecards help ensure the function supports broader strategic aims rather than operating as an isolated silo.

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Khizer Humayun
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76 views2 pages

Understanding HR Scorecards in Organizations

HR scorecards are tools that measure how well the HR function aligns with an organization's strategic goals. They provide metrics on the costs and benefits of HR processes like recruitment, training, and retention. This allows organizational leaders to evaluate whether HR activities are delivering value and achieving business objectives. Specifically, scorecards track costs against outcomes like employee performance or customer satisfaction to assess the return on investment of HR initiatives. By quantifying the impact of HR, scorecards help ensure the function supports broader strategic aims rather than operating as an isolated silo.

Uploaded by

Khizer Humayun
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Khizar Humayun

BS Social Sciences
5th Semester
HRM Assignment

HR Scorecard are tools to measure how well the HR function is aligned to the
overall strategic goals of the organization.
In other words, HR now was expected to align its recruitment, compensation, and
employee retention strategies to the organizational strategies.
What this means is that in contemporary organizations, the HR managers have a
“seat at the leadership table” or to put it simply, they have to be aligned with the
larger organizational strategies.
Towards this end, the HR Scorecard works by providing decision-makers with data
and inputs about how much the employee recruitment and retention processes cost
and what are the benefits of the same.
For much of the 20th century, it was commonly understood that these costs are part
of the overall organizational costs and there was no way to measure the benefits of
such expenses in “tangible” ways.
In other words, what this means is that an HR Scorecard provides the
organizational leaders with metrics and data in tangible terms about the payoffs
and the benefits from HR processes and activities.
How the HR Scorecard Works
How the HR Scorecard works is that by drawing up the budget for the HR
function, key cost items and overheads are identified and once done so, then such
costs are translated into how much benefit that they are bringing to the overall
organization.
For instance, if high potential and highly talented employees are hired, the costs of
hiring and retention are then measured and stacked against the likely benefits that
such activities bring to the organization.
Apart from this, the real usefulness of HR Scorecards is that it gathers metrics
about activities and processes such as training and then identifies the likely
benefits in terms of result oriented and metric-based training outcomes.
In other words, “by keeping score” of which training cost how much and how
useful or relevant it was in addition to how much benefit that such training meant
to the attendees, the HR Scorecard provides the leadership and the HR managers
with measures and metrics on the “value” that is being created to the organization.
Thus, HR scorecards are indeed useful and relevant in contemporary organizations
that take human resources seriously.
What are the Benefits of HR Scorecards?
The key benefit or the relevance of tools such as HR Scorecards is that it aligns the
broader organizational strategies with the HR strategies and the convergence of
organizational goals with the HR goals brings the HR function in line and tune
with the overall organizational ecosystem.
For instance, how this works in the real world is that if an organization identifies
superlative customer service as a strategic goal, the HR scorecard helps in
measuring the benefits of initiatives such as training the customer service
representatives and the associated staff costs involved in hiring and retaining such
key personnel.
At the end of the year, the benefits of the initiatives as measured by customer
feedback surveys are tallied to the costs of the initiatives so that organizational
decision makers and more importantly, the HR Managers have an idea about the
effectiveness and efficacy of their hiring and retention strategies and their
usefulness and relevance to the broader organizational goals and objectives.
In other words, the HR function is no longer a “silo” that stands apart in “splendid
isolation” and is instead, aligned with the overall organizational ecosystem of goals
and objectives.

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