Customer Reviews

The HR Scorecard: Linking People, Strategy, and Performance

5 star:		(12)
4 star:		(8)
3 star:		(0)
2 star:		(2)
1 star:		(1)

 

 

As a seasoned HR professional, I have spent the last decade looking for the "Holy Grail" of H.R. Metrics. My quest is not over after reading The HR Scorecard, but the book presented many helpful concepts and tools that we can use to measure the effectiveness of HR as a function, to measure R.O.I. on talent and talent initiatives, to measure the impact of HR on organizational performance, and as a basis for business case development of our deliverables.

Three well respected thought leaders in the HR field have conducted extensive research of more than 2500 companies to uncover a model for implementing HR strategy and measuring results. If fully employed HR will deliver results linked to higher functional and organizational performance.

To transform the structure of HR into a strategic function, HR leaders must:

1. Clearly define the business strategy.
2. Build a business case for HR as a strategic asset.
3. Create a strategy map (with leading and lagging indicators, and tangibles and intangibles.)
4. Identify HR Deliverables within the strategy map.
5. Align the HR architecture with HR deliverables.
6. Design the strategic measurement System.
7. Implement management by measurement.

The concepts in this book are useful but may not be practical for all HR leaders. This book is for organizations that have the resources to implement an in-depth system of measuring their HR performance. It is not a way to create a simple snapshot to be included in business reviews. While the authors suggest using no more than 25 measures so as not to create a burdensome systems, many of the examples in the book are quite complex and can by used only by the largest of organizations. It is also difficult to pick just a few efficiency measures and performance drivers from the comprehesive list prepared by the authors.

Real life examples of scorecards are shown from organizations such as Verizon/GTE, General Mills, and General Electric. While these examples can help any size HR department think through how to measure the performance of their function, I would like to see a smaller organization profiled with more simple measures.

This book should be in the library of all serious HR practitioners. It is well written, well researched, and well presented. If the tools and concepts are implemented, the HR function can rise to a new level. For those in smaller organizations, a few HR efficiency measures can be gleaned to build a simpler scorecard based on the key HR deliverables for the enterprise.

No fluff here! This book outlines, then defines a paradigm for effective HR functioning within a changing organization. The authors suggest and document that increased measurement of key data will lead to enhanced value to the organization and its customers. Yesterday's model of HR tasks is no longer enough. This book can guide the experienced human resource professional into a new role in strategic implementation.

I'm a career counselor, not a human resources professional. I hear plenty of stories of burn-out and disillusionment in the field, probably because the tasks and obligations of the HR field have changed as drastically as any. This book can provide a re-education to those who wonder what is going on, and why yesterday's solutions just don't work.

I would have welcomed a personal-type note to the individuals caught up in transitions. The authors have provided information, but have not offered encouragement. It would have been a definite plus to this impressive publications.

If you're in HR and need to establish measures for the value you add, this book contains a huge array of options for measurement. As a resource for "brainstorming" it's unparalleled.

Where the book breaks down is focus. As Jerry McAdams says, measure many things but reward a few. If HR were honestly to establish and maintain 100 measurements, how could even an airline pilot monitor that many gauges on the the dashboard?

It would have been much better if the authors had said, "These are the half-dozen key, even 'universal' measures of HR value-added." As it is, the reader has to wade through the enormous number of options furnished and hope that they've gotten it right.

Worse yet: with all these measures, HR takes "the easy way out" and suboptimizes, picking only those measures which make HR look good. If measures of self-aggrandizement is all we've accomplished, we've not helped our businesses at all.

I've had a lot of experience with the Balanced Scorecard and was thus very interested to read Becker, Huselid, and Ulrich's take on the subject and how performance measures can be successfully applied to the HR arena. The book is very well laid out, thoughts are presented in a logical fashion, and the advice is nearly immediately applicable. Not only do the authors guide you through the steps necessary to apply the Scorecard to HR but they provide invaluable insights on what is necessary for the HR organization of today to become true "strategic business partners." The HR competencies they put forth will be critical for future HR leaders. I was also pleasantly surprised at the amount of what I might term supplemental information contained in the book. For example, in chapter 8 they provide great insights into what it takes to successfully implement a major change project. In another section of the book they discuss the principles of good measurement - that will help organizations adopting a Scorecard in any area of their business.

The main idea of the book is that HR strategy has to be matched to business strategy. This has been a view that HR people, dissatisfied with their traditional 'support' role have been hankering for. In this book Ulrich and company actually give them a tool to manage HR as a strategic asset, demonstrate HR's contribution to the bottom line, and to create and measure the degree of alignment between both the strategies.

So in a way the book is a very narrow sense of aligning HR to business results...but does not look at the things Ulrich himself has spoken of in depth earlier like "HR as the employee champion" and the conscience keeper of the organisation, where the 'performance measures' are much more softer and fuzzier in any great detail.

I recently re-read this book and have even higher regard for it now than I did I when I first read it soon after it was published in 2001. Becker and Huselid later co-authored The Workforce Scorecard with Richard W. Beatty. With rigor and eloquence, they examine three separate but related challenges: Perspective (with an emphasis on differentiation), Metrics (and their relationship to strategy execution), and Execution (which holds senior executives and line managers accountable for workforce success). They suggest that all organizations which successfully meet these three challenges (i.e. those which "do it right") have these six characteristics in common:

1. HR professionals spend less time on employee performance than they did five years ago

2. The relationship between workforce success and strategy implementation defines the ROI of new HR initiatives.

3. Creating a shared mind-set is not taken for granted.

4. The HR function has a staffing structure that effectively balances the tension between being a strategic partner and delivering efficient and effective HR services.

5. Strategic workforce measures are "owned" and coordinated by a single individual or task force.

6. Senior executives, line managers, and HR professionals consider the results of the measurement system worth the implementation effort.

Although it may seem to some who read this brief commentary that will be of substantial value only to large organizations, I hasten to reassure them that, after appropriate modifications, what Huselid, Becker, and Beatty recommend in The Workforce Scorecard can help any organization (regardless of size or nature) to improve the quality of their strategy execution by developing the right perspective on the contributions of its workforce to its success, and, by developing the right execution strategy to ensure that its managers are ready, willing, and able to use workforce metrics to drive business success.

It is important to keep these points in mind when reading The HR Scorecard and I strongly recommend that, if possible, The Workforce Scorecard be read in combination with it, preferably but not necessarily afterward.

Robert Kaplan and David Norton wrote three articles for Harvard Business Review ("The Balanced Scorecard," "Putting the Scorecard to Work," and "Using the Balanced Scorecard as a Strategic Management System") which led to a series of books in which their insights were developed in even greater depth. According to Norton who wrote the introduction to The HR Scorecard, in the New Economy, human capital is the foundation of value creation and that up to 85% of an organization's value is based on intangible assets. "This presents an interesting dilemma: The asset which is most important is the least understood, least prone to measurement, and, hence least susceptible to management." He goes on to commend the co-authors of The HR Scorecard for three specific contributions: their development of causal models which illustrate the relationship of HR value drivers with business outcomes and thereby take the Balanced Scorecard to the next level of sophistication; their research on the drivers of high-performance organizations to provide a framework to decision-makers with which to formulate and implement strategies for human capital growth; and finally, their insights into the competencies required by HR professionals, competencies which can enabler an organization to deliver on the promise of its measurement system.

In essence, the co-authors of The HR Scorecard identify and explain linkages - indeed the interdependence -- between and among people, strategy, and performance. Only by understanding these linkages and their independence can decision-makers in any organization (regardless of size or nature) accurately measure the nature, value, and impact of human capital on the bottom line.

Moreover, decision-makers can then make much more accurate measurement of each individual in terms of the value she or he adds to the organization and, more importantly, to those on whom that organization depends for revenue. Customers who purchase products, of course, and clients who purchase services but also members who purchase members and benefactors to contribute donations.

Here are two other substantial benefits of establishing and then maintaining a HR scorecard:

1. It can guide and inform hiring decisions which ensure that an organization increases its human capital with those to add new value

2. It can also guide and inform decisions concerning the allocation of tangible resources, especially when there are unexpected major developments (either threatening or promising) in the given organization's competitive marketplace.

When concluding their brilliant volume, the authors observe that while much of the work of an HR scorecard is technical, the delivery of the Scorecard is personal. "It requires that HR professionals design to make a difference, align their work to business strategy, apply the science of research to the art of HR, and commit to learning from constant experimentation. When you create the HR Scorecard, using the approach we describe, you are actually [begin italics] linking HR to firm performance [end italics]. But you will also develop a new perspective on your HR function, practices, and professional development. In measurement terms, the benefits will far outweigh the costs."

I presume to add two concluding suggestions of my own. First, that HR professionals use the Scorecard initially to measure their own performance so they can determine how, as individual executives, they can add greater value to their organization. Next, that all others in senior management also read this book as well as The Workplace Scorecard to increase their own understanding of (a) how and why to link people, strategy, and performance enterprise-wide and (b) how to manage human capital much more effectively (also enterprise-wide) when executing strategy.

Huslid and Becker have been working on a strategic approach to measuring the effects of human resources policies on financial performance for 10 years. This is the result of their work. It is a worthy companion to The ROI of Human Capital by Fitz-enz, clearly the seminal writer in this field.

The greatest strength of this book is it's focus on making the business case for investing in human capital, and tying all HR activities to organizational strategy. It does a solid job of laying out a framework for implementing the HR Scorecard, which is made up of 4 components: "HR Deliverables", "High Performance Work System", "HR System Alignment" and "HR Efficiency".

However, I found the writing awfully muddy, at times unclear, and often confusing. The book throws out definition after definition, and it's hard to tell where one ends and another begins. At times, the authors seem confused themselves, and there aren't clear distinctions between some definitions. It seems like they're just assigning definitions for the sake of assigning them. In addition, much of what they write is intuitive, and doesn't necessitate the lengthy and confusing descriptions.

In short, I didn't enjoy reading the book, and as a result, I didn't get very much out of it.

The issue is to have an HR scorecard for the business. The book was disappointing since it continues with the theory that originated with "Balanced Scorecard". It should have focussed on the actual challenges and created a robust framework.

The book missed the point and an oppurtunity. It might be interesting read but no practical value.

The book has built on the key philosophy underlying the earlier book, The HR Scorecard: Linking People, Strategy, and Performance by Brian Becker, Mark Huselid, and Dave Ulrich, which was written with a view to align human resource activities with business strategy. The present book is a follow up of that one. In nutshell, it seeks to introduce a metric system that deals with behaviours, competencies and mindsets and culture necessary for workforce success, as also the way it influences the organizational performance.

The book helps differentiate workforce into various categories which necessitates reliable standards and measures. Developing these will help employees know as to what is expected of them.

The book is undoubtedly a fine contribution towards improving the effectiveness of operations and other managers; it will provide them potent ideas for better delivery of results. It even has the potential of raising the stature of the discipline of strategic HRM. It is well known that HR is presently in an hour of crisis as it has been subjected to tremendous pressure for outsourcing of its activities. The book's hallmark lies in its practical utility to managers. It offers specific guidelines for ensuring that effective measures are identified, accepted and used. The HR managers are bound to give regards for the metrics that have been suggested in this book. It will become one of the widely-read, used and referenced books in the time to come. The book is free from any jargon; yet its conceptualization is powerful. The central line of reasoning flows very well throughout the text. The illustrations and tables are extremely interesting. The book should be an essential reading for line as well as HR managers as they are jointly responsible for executing strategy. All those who are striving to build high-performance organizations must read this book.

Debi S. Saini
MDI, Gurgaon, India