This document discusses linking HR metrics to business outcomes through an HR scorecard. It outlines assessing HR's competencies, practices, and systems and how they contribute to workforce success and ultimately organizational success. HR competencies include administrative expertise, employee advocacy, strategy execution, and change management. Practices like communication, work design, selection and development are also assessed. The HR systems are evaluated based on alignment with strategy, integration across practices, and differentiation of the workforce. Workforce mindset, technical skills, and behaviors are delivered through the HR function and feed into business metrics like customer success, process success, and financial success.

1. NEW HR METRICS: Scoring on the
New Business Scorecard

2. • Introduction
• From Business Scorecard to HR Scorecard
• Assessing HR’s Competencies
• Assessing HR’s Practices
• Assessing HR’s Systems
• Linking to the Business Scorecard
TABLE OF CONTENTS

3. INTRODUCTION
• An economic shift (agrarian, manufacturing
services information), role of HR has changed to
influencing workforce mindset, competencies,
and behavior from administrative and
transactional.
• Early on HR professionals were a refuge for line
managers who were “too nice to terminate”.
• This reading establishes a strategic link between
the HR Scorecard and the Business Scorecard.

4. According to an Ernst and Young survey intangibles like:
Strategy Execution; Managerial Credibility; Retaining Talent;
Management Experience and Compensation Management-
explain the variance in the market value of firms.
Another major research study has shown that firms with
sophisticated HR systems have significant financial growth.
This reading explores the measurement of workforce, the HR
function, the firm’s leadership wrt their impact on the
workforce and ultimately upon the firm’s strategic success

5. TRADITIONAL BUSINESS SCORECARD
Strategy
Operational
Excellence
Product Leadership
Customer Intimacy
Financial
Success
Customer
Success
Business
Process
Success
Workforce
Success

6. HR DELIVERABLES
Workforce Mindset
Technical Knowledge
Workforce Behaviour
HR COMPETENCIES
Administrative Expertise
Employee Advocacy
Strategy Execution
Change Agency

7. HR PRACTICES
Communication
Work Design
Selection
Development
Measurement
Rewards
HR SYSTEMS
Alignment
Integration
Differentiation

8. ASSESSING HR COMPETENCIES
• The HR function can be conceived as having
process and focus on administrative efficiency.
• HR’s employee advocacy role with focus on
serving the workforce, growth and retention of
critical workforce.
• HR align’s HR strategy with the firms strategy.
• The focus of the HR function should correlate
with the firms lifecycle and strategic choice.

9. Competencies of the HR workforce are their strengths
and weakness in the specific areas of expected HR
performance.
1. Administration Expertise:- HR function can be
conceived as having a process and tactical focus in
administrative efficiency in delivery of HR transactions.
2. Employee Advocacy/ Relations:- Its an operational
focus on serving the workforce and also the growth and
retention of critical components of workforce.
3. Strategy Execution:- HR better enables the firm to
execute its strategy by aligning Business practices with
business strategy.
4. Change Agency/Workforce:- HR should not focus on
only one area or role but also keep a tap on cultural change
and help the workforce to adapt to the coming changes

10. FOR INSTANCE
• A firm pursuing an operational excellence strategy
would want an HR function concerned with
administrative efficiency.
• A firm moving from product leadership to
operational excellence strategy would require
significant HR competencies in cultural change as
well as in strategy execution.
• Firms pursuing a product or service leadership
strategy would most likely want HR focused on
populating the firm with the very best R&D or
technical in order to distinguish itself from its
competitors.

11. ASSESSING HR PRACTICES
• Can be assessed against the performance of
other firms.
• Collect best practice data available through
secondary or primary research.
• Big firms can develop scorecards to evaluate HR
performance of one business unit against the
other.
• Enhancing one procedure or practice should not
be done at the cost of diminishing the efficacy of
the others.

12. ASSESSING HR SYSTEMS
• Three ways of assessing HR Systems:
▫ Alignment
 Operational Excellence
 Product Leadership
 Customer Intimacy
▫ Integration
▫ Differentiation
Significant cultural difference required of the
primary workforce that deliver firms value
proposition.

13. • Firms following a Operational Excellence Strategy
needs work force:
▫ Identifies with business processes
▫ Is trainable
▫ Can learn rapidly
▫ Willingly follows the action plan
▫ Is short term focused
▫ Seeks to avoid waste and minimise cost
▫ Driven by incremental improvement.
• Federal Express, Nucor, Walmart, McDonalds and
other fast food chains.
• Firms uniqueness or competitive advantage is tied to
cost.
OperationalExcellence

14. • Innovation is the value proposition
▫ Challenges status quo
▫ Is anti- bureaucratic.
▫ Has a long term focus.
▫ Driven by learning.
▫ Greater tolerance for ambiguity.
▫ Willing to take greater risk.
▫ Should not be structured or streamlined as its
members are expected to be innovative, creative
and think out of the box.
• Sony, Merck, 3M, Intel and Nike.
Product or Service leadership

15. • Customer intimacy value proposition offers unique
solutions customised for the clients.
▫ Workforce constantly finding and improving
solutions.
▫ Constantly seek customer intelligence
▫ Be adaptable and flexible
▫ Concerned with making results happen for the
customer.
▫ Driven by customer success.
▫ Employees need to think, capture and disseminate
information and better utilize the information in
meeting the customers unique demands.
Customer Intimacy

16. Integration

17. • Firms business strategy, communication about
business strategy, strategic directions and design of
the work all needs to be integrated.
• Measurement, selection, development and
motivation needs to be aligned and integrated with a
common language
• Huselid’s survey of some 1000 firms indicate that
alignment and integration of firm’s HR plays a
critical role with impact varying by quality of work.
• Substantial changes in market value occurs based on
the extent to which the HR system are aligned and
integrated.

18. DIFFERENTIATION
• Contract Service: Readily available human capital with
little strategic leverage.
▫ This work is far from core in delivering firms value proposition
and is candidate for out sourcing.
• Strategic Capabilities: Narrow distribution in labour
market and have significant impact on firms value
proposition.
• Professional Partners: positions inside a firm not directly
responsible for leveraging firms value proposition.
▫ For a manufacturing firm it can be law, accounting, finance and
HR.
• Operational Partners: Widely distributed in the labour
market and have significant impact on delivering firms value
proposition.

20. LINKING TO THE BUSINESS
SCORECARD
• HR has been linked in building competencies,
aligning practices.
• What HR must deliver is a workforce. Workforce
success is the ultimate goal of the HR system.
• One way to measure the mindset of the
workforce is asking questions on understanding
the strategy.
• Firm’s status wrt strategy and employees
understanding of the firms value propostion.

21. • Studies like the Gallup survey and Sears’ survey
have established a relationship between workforce
behaviour, operational success, customer success
and financial success.
• Measurement of HR competency poses an
important doubt of which competency to measure
through the survey.
• The objective is to drive those behaviours which
cause a substantial impact on the business process
and lead to customer success.

22. • The idea to ask HR managers their deliverables
in terms of workforce mindset just like line
managers are responsible for operational
success.
• The financial success of an organisation
ultimately the rewards for the employees which
affect their success and competency.

23. THANK YOU!