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. 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.įor 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.Īpart 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, 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. 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.įor 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. 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. In other words, HR now was expected to align its recruitment, compensation, and employee retention strategies to the organizational strategies. What is an HR Scorecard?Ĭoncomitant to these developments was the evolution of the initiatives such as HR Scorecard which are tools to measure how well the HR function is aligned to the overall strategic goals of the organization. In other words, the HR function evolved and transformed into one where it was no longer peripheral or a support function, and instead of times when human resources are viewed as sources of sustainable strategic advantage, the role of the HR manager was to aid and enable such resources to contribute effectively and meaningfully to the organizational strategies. Note the emphasis on resources and people as the services sector relies on human capital as the key asset and hence, the HR managers were expected to contribute to strategic goals and objectives. It was only with the advent of the services sector that the role of the erstwhile personnel manager transformed into human resources management and later on, to people management and people enabling and people empowerment. Indeed, in the manufacturing era, the term used for HR functions was personnel management and industrial relations wherein the job of the personnel manager was to ensure that salaries are paid on time, mediating between the unions and the organizations, and otherwise being peripheral to the other functions such as production, operations, sales and marketing, and strategy formulation. Traditionally, Human Resources or HR was viewed as a support function whose primary role was to take care of payroll, time tracking, and disputes between the unions and the organizations. The Evolution of the HR Function through the Decades
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