Scorecard Metrics for HR

It becomes even more crucial to measure HR efficiency in recession periods so that a smart, timely HR response can be made considering employee performance and morale.

Left and right, we keep hearing of even the biggest companies having correspondingly big troubles with the financial crisis. When it first started showing itself, the crisis was, of course, startling and worrying, but as it now wears on, people are starting to turn to the more practical matter of weathering it. One of the crucial things to realize is that it is very important to be able to measure HR efficiency in recession accurately. Despite the possibility of drops in sales and other record financial lows, it is not the Finance or Accounting departments that are vital during recessions at all. Instead, the Human Resources department is the one that has to act fast and act well in order to give the organization the best chances of making it through the crisis with minimized damage.

In any crisis, an organization is in grave danger of losing its best people. This is because news of impending crises and downturns always has the effect of worrying people, making them reconsider their employment options. The best people, being usually the most qualified, are the ones with the most leverage and drive to look for and find what they might think are better opportunities elsewhere. This is why the HR department must act fast to reassure their top performers that the organization will continue to compensate them as fairly as possible during the recession. The HR department and the management should be able to present a unified front and a smart, well-justified plan for the entire organization during the crisis.

The goal, of course, is to increase employee confidence in the organization as well as to boost morale in general. Recessions call for extensive communication with the employees, keeping them up to date with the most important decisions and developments. Leave your employees feeling out of the loop, and pretty soon, inevitably, their worries and doubts will start to surface again. Not only would this lead to worsened performance due to anxiety and nervousness, it might even lead to resignations, as the most worried employees might decide to try their luck elsewhere. Employee dissatisfaction is a very probable result that is very undesirable. This can be avoided entirely by ensuring that everyone knows about all major decisions and the justifications behind them. Even unpopular measures, such as raise reductions and salary cuts, might be taken better than expected if they are explained clearly and with full honesty.

Keeping track of HR efficiency is thus important, as it will also act as a barometer for determining the mood of employees. Generally, higher efficiency will point to better moods, while lower efficiency would indicate that something needs to be done. Measure HR efficiency in recession periods to keep on top of the organization’s internal atmosphere. This data will also, of course, be helpful in deciding which employees need to be retained as much as possible, and which ones could conceivably be let go. Weathering a financial recession is by no means going to be easy and a good HR response is the key.

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Managing HR during financial recession, which will eventually affect most companies and organizations, should focus on keeping everyone calm and together through smart, cost-effective strategies.

The signs are everywhere as even the biggest companies reel left and right from the staggering effects of the financial recession. Layoffs, buyouts, bailouts, mergers, and other undeniably desperate measures are being grasped at like straws. But aside from these drastic measures, everyone should realize that it is just as important to adjust in managing HR during financial recession.

HR or human resources, in fact, plays an even bigger role during tough times than during periods of prosperity and growth. Whenever a company or organization encounters trouble or enters a slump, the group’s morale is certain to take a heavy hit. While to some extent the loss of morale may be alleviated by employees among themselves, human resource departments definitely have to step up as well. In cooperation with management and the leaders within the organization, the HR department has to implement sound, consistent strategies to help everyone through the recession lows.

The first order of business would be to calm everyone down and prevent panicking as much as possible. In doing so, the HR department and management should take care to present and keep up good appearances. Scrambling and hurrying to slap together some sort of message to the organization might be more counterproductive than helpful. Take the time to draft a well thought out campaign. Do not deny what is obvious, that a recession is occurring, but on the other hand, do not focus entirely on predicting doom. Simply reiterate the organization’s mission and state that even through these troubled times, everyone should continue trying their best and working together.

Apart from just drafting a reassuring message to send throughout the organization, the HR department should also begin looking at how it can slim down its processes, in line with the cutbacks that will inevitably have to be made. This might mean reducing bonuses, making parties and other non-necessary events smaller or doing away with them altogether, and even cutting back a little on the training budget. However, as with any budget cut, try as much as possible not to sacrifice quality too much. That is, find lower cost alternatives that are not too different in quality from the processes and policies you already have in place. Creativity and innovation would definitely pay off here.

Assigning top performers to hold in-house training sessions instead of hiring outside experts is an example of cutting costs on training. While this measure might not be quite as effective as hiring a consultant might be, it is still much cheaper. It will also help to build camaraderie among the employees and keep the organization unified.

In summary, with the grave effects of financial downturns, human resource departments are certainly going to have a lot on their hands. Even just staying afloat may prove hard for some companies, let alone continuing to go strong. But managing HR during financial recession is not impossibly difficult, if managers and human resource personnel keep their wits about them and focus on what is important: calming down any panic and remaining unified as an organization.

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Financial crises and downturns are forcing businesses and companies to strive to control recession effects on HR performance by going back to the basics and focusing on their people.

Financial crises, recessions, and economic depressions are not new phenomena, but their occurrence is definitely a cause for great concern among many. This is because no matter how well we study the history of downturns such as these, dealing with them when they do happen again is still just as difficult. Most organizations will wonder, for instance, how to control recession effects on HR performance, and employee performance in general. For the most part, this would fall to the efforts of the human resource department. In fact, the HR department would probably need to handle the most important part of the recession coping strategies.

This is because, essentially, what crises force organizations to do is to go back to the basics and try to maintain an intact, dynamic core. This core consists mainly of the organization’s leaders and employees – all united towards accomplishing their mission and achieving their vision. The panic and worrying induced by uncertain, or worse, poor economic conditions will tend to obscure this simple fact, but human resource departments should strive to realize this, better sooner than later. The sooner HR is convinced of its central role in surviving the crisis, the sooner planning and implementation could start as well.

Drops in sales and profits will inevitably lead management to consider laying off employees, especially the poor performers. While this may be necessary in a lot of cases, it should also be realized that this often has unintended consequences. This is manifested in the loss of productivity caused by layoffs, however small, as other employees suddenly feel less secure in their own jobs. Another effect may be lowered morale, since those who were laid off were friends and close colleagues of those who remain in the organization. The best thing to do to try and lessen these side effects would be to maintain open channels of communication among the management, human resources, and the employees. They should be able to ask questions and get straight, honest answers. This will, in the long run, lead to a better understanding amongst the different parts of the organization, which is crucial for long-term survival.

HR should also do the best they can with the employees and resources available, in terms of training programs. While recessions are usually seen as periods where organizations should do all they can to just stay afloat, it would not do to neglect the future for the present. That is, training budgets are often cut mercilessly during tougher times, with the rationale that they give no immediate payoff. However, companies that follow this policy too closely may find themselves unprepared to cope with the changed situation once the crisis has passed. Strategies should be made looking at the long term, and not just the short term, no matter how tragic the short term may seem to be.

HR departments truly do have their jobs cut out for them in times of crisis, but with a smart and sensible plan, managers can effectively control recession effects on HR performance.

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Any organization will be unfortunate enough to experience a drop in efficiency. Weathering these crises will entail knowing how to resume management efficiency once they have passed.

Slumps or periods of poor performance are practically unavoidable for any company or organization. Keeping an organization up and running at optimal efficiency is a tricky business, to say the very least. Sometimes, factors that are out of the management’s control cause periods of decline or stagnancy, and once these periods pass, it becomes necessary to resume management efficiency.

This is not as impossible an endeavor as it may first appear. In crisis cases like this, what becomes important is keeping a firm grasp on the fundamentals. It is all too easy to become overwhelmed by the problems and crises of the present, and thus lose sight of the organization’s goals. It falls on the management to take control of the situation and begin the process of rebuilding and regaining efficiency.

Although it may seem an unnecessary detour, it would pay off to revisit the organization’s mission and objectives. This will serve to refocus the organization and make it better able to realign itself towards the achievement of its purposes. In management terms, managers will be able to make better decisions when they once again ground themselves in the organization’s mission and vision.

The next crucial step in regaining lost efficiency is to reestablish channels of communication. A large part of effective management is effective communication, not only between superior and subordinate, but also among peers. Peer-to-peer communication is necessary for fruitful discussions, and many decisions within the organization depend on this kind of communication. Once made (in the upper levels of management for example), these decisions must be able to be spread quickly and without distortion throughout the relevant departments of the organization. This, on the other hand, is where superior-to-subordinate communication becomes important.

Using these channels of communication, management must then quickly reassign roles and responsibilities. These would, of course, stem from the larger strategic plan that has been worked out, starting from the organization’s bigger goals. Throughout the organization, it must be clear who is responsible for doing or supervising each particular aspect of the organization’s performance. Management efficiency is much improved when tasks can be readily assigned to people and when these tasks are well-supervised. To put it in another way, the harmonious working of an organization depends on its various components knowing – and doing – their assigned responsibilities.

And finally, to ensure that the organization stays on track this time, management must also be able to provide or inspire motivation in every member. Simply knowing one’s responsibilities is not enough to ensure that one would actually fulfill these responsibilities. A sense of obligation, or better yet, much motivation is required. Motivating an organization to perform efficiently can be done in many ways, such as providing various performance incentives, holding pep meetings, and so on.

To sum up, to resume management efficiency, an organization must revisit its fundamental goals, reestablish good communication, reassign responsibilities, and motivate its members. These are, of course, general guidelines, and the specific implementation will depend on the specific nature and circumstances surrounding the organization.

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There is a need to prepare for KPI implementation because this will increase the likelihood of implementation success.

There are a number of stages to be fulfilled and prerequisites to comply with by a company in order to prepare for KPI implementation. Foremost, there is a need to identify all key performance indicators and the goals to be achieved for each. The method of measurement for each metric should also be defined, as well as the relevant data needed for the pre-identified metrics. Moreover, reporting requirements, like graphical and table output, should be identified even during the preliminary stages.

Key performance indicators (KPIs) differ from one organization to another. Generally, these data are obtained from spreadsheets, charts, and reports, or a combination of these. They may also include sales figures describing the sales performance of a company in a regional and global perspective, real-time supply chain information, and any other metric that is crucial in achieving organizational success.

KPIs are critical to company success because without measurable quantities, it would be impossible for managers to assess and evaluate performance. In addition, KPIs are essential in planning strategic plans. It likewise gives additional value to some operational aspects of the company that might not be easy to quantify, like internal customer, employee development, and customer satisfaction.

While the use of KPIs has become the latest trend in the business world today, it is important to distinguish them from performance targets. They are not the goals of the organization; rather, they are measures that help management assess the current state of business for them to come up with appropriate operational decisions. KPIs are created to support the fact that performance targets are met or otherwise. Most KPIs are quantitative, as they can be represented by numerical figures. Some KPIs, meanwhile, are practical indicators in that they interact with current business processes. There are also directional KPIs that determine whether a company is improving or otherwise. Some KPIs are also called actionable indicators, as they can be used to effect improvements in an organization.

Identifying KPIs that are relevant to the business may be quite tricky for managers, as there might be too many performance indicators to choose from. Those in the know recommend that the SMART criteria be used when selecting KPIs. That is, the chosen performance indicators should be specific, measurable, achievable, result-oriented, and time-bound.

As mentioned during the first part of this article, preparation for KPI implementation takes several stages. The initial stages involve designing the KPI framework, which include deciding on some things that are essential for the evaluation system to work. Among these are the goals and plans that the company envisions, the facilitating and implementing procedures for future activities, methods of measuring output quality, and the involvement of a competent workforce.

Some companies end up concluding that using KPIs are ineffective, as these can indeed by difficult and expensive to implement. They might also be difficult to change in the subsequent years. However, if a company will take time to prepare for KPI implementation, it can become a factor in the achievement of organizational objectives.

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The KPI framework is a potent management tool for measuring management efficiency. But their potency actually depends on a few factors.

Key performance indicators are management tools that measure the relevance and usefulness of employee activities and company programs. But in order for KPIs to be effective, there are some things that must be considered. One is the framework of the KPIs themselves. The KPI framework must include all the important aspects of company operations essential to coming up with an accurate assessment of company performance. Also included in the framework are metrics that efficiently gauge whether or not outputs are beneficial to the company.

The formulation of KPIs that are appropriate to organizational goals depend basically on the ability of management to break such goals into smaller and more specific units. These specific units provide organizations with the measures by which key performance indicators can be assessed as to their relevance and effectiveness.

Most common key performance indicators that business organizations are likely to concentrate on are those pertaining to finance management, employee productivity, product quality, consumer satisfaction, management process efficiency, and others. Differences in key performance indicators that organizations utilize will largely be the result of differences in goals and objectives, reading of the current situation the company finds itself in, and most importantly, resources — both human and non-human. But whatever the differences, all key performance indicators have only one ultimate objective — ensure that goals and objectives are attained.

Plans are the specifics of goals and are the most important aspect of the framework. Plans supply the strategies, clearly defined activities, timeframes, and resources needed to accomplish the specific expected outputs. It is obvious that plans provide the key performance indicators that determine whether the whole management process and its different components are effective or not.

One very useful function of KPIs is their ability to detect limitations in the existing management process. Whether there is a particular program in the plan geared towards management process improvement or not as long as plans are conscientiously implemented and periodically and objectively assessed, issues pertaining to process will always be exposed. And when recognized as such, there will always be opportunities for process improvement.

Goals and plans provide anchor to all company activities. Employees will be conscious that however simple and seemingly irrelevant to the overall scheme of things their tasks are, they are useful and beneficial to the company. But this feeling is only possible when goals and plans are integrated into the daily routines of employees; otherwise, what they are doing will be just routines that they do mechanically.

This is one of the most difficult tasks that management usually faces in implementation of plans. For managers, of course, this is quite easy but for others, translating plans into quantitative and qualitative targets is tedious and time consuming. Even then, for plans and KPIs to be assessed properly, full integration of plans from top to bottom must be accomplished.

The KPI framework enables employees to know the importance of what they are doing and provides organizations a way of measuring the usefulness of outputs and the means to adjust to various issues that impact operations.

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Appropriate way of handling a job interview, oral and written communication skills, and being flexible with extreme and varied characters, these are the advantages of giving first-time managers HR training.

In this fast pace world of business, stringent, appropriate, and well-invested employee training is necessary. Any organization that wishes success in their business endeavor should be adamant that their workers participate in some kind of preparation. Yes, even HR managers need training to prepare for the realities of the workplace. First timers may have the knowledge and the spirit to conquer the challenges of the corporate battlefield. But their infancy makes them unequipped for the real battle. It makes them less capable to deal with the most difficult aspect of running business, which is managing people. This is precisely why HR training is imperative.

There are 3 important things human resource managers conquer and learn from a training program that will make them equipped in handling personnel concerns that may arise inside the office. And one of these three tests is the proper conduct or handling of an applicant interview. Unknown to many, a job interview is actually a potential minefield not only for the applicant but also for the interviewer. It poses great and unforgivable risks that may even lead the manager to face a legal suit. This is where proper training comes into effect.

There are rules that govern the appropriate handling of applicants in an interview. It is not enough just to throw out random questions to the point that the interviewer is already invading the privacy of the interviewee. From a legal standpoint, asking questions like “how many kids the interview has” is unsuitable and unethical. In the United States, Equal Employment Opportunity states that HR managers have no right to ask such question. There are things that HR officers should take into consideration. Legal issues are just one of them. Asking the right questions is one area that they learn from human resource training.

The second thing to learn is personality development. The corporate workplace is a melting pot of various and, more often than not, inexcusable attitudes. What are expected of an HR manager are authority, respect, and the ability to handle even the most fragile character. The ability to be flexible yet commanding is a skill that a rookie manager will learn from human resource training.

As experts say, leadership is the ability to make people follow and obey with less effort. And as another adage says, “Respect is earned, not gained”. This is precisely why HR manager trainings include comprehensive learning activities that involve interactive segments, like demonstration, written and practical tests, and role simulation.

The third important benefit of human resource training is communication. This refers to cultivating and enhancing the ability of the HR manager to express himself in both written and oral media effectively. Communication skills also include the art of listening. Communication is a two-way process, as experts say. And in a battlefield like the office place, which demands a clear expression of ideas and individualities, communication is nothing but significant.

Proper interview, personality development, and communication skills – these artilleries will turn a first time HR manager into a skilled arms man. Do not take human resources lightly then. Invest in the best HR training.

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HR performance is a vital aspect of any organization that deserves attention. Its various processes are undeniably linked to the performance of the organization as a whole.

HR performance refers to the effectiveness of people management, or human resource management, and is usually seen as one of the most difficult aspects of organizational performance to measure. In contrast to the financial aspect, for instance, which more or less has a strict, objective set of metrics (or measurement parameters) and performance criteria, people management is less cut and dried.

Intuitively at least, the link between HR practices and organizational performance is quite undeniable. Managing people well will inevitably lead to improved performance, in general. To be systematic about investigating and characterizing this link, over the years, many people have considered various types of metrics. Here, we present an overview of the different metrics and parameters commonly used to describe and evaluate different aspects of HR effectiveness.

The human resource process typically begins with selection and recruitment. Whenever there are vacancies to fill, it is the HR department’s job to find applicants and select from those most qualified to fill the available jobs. The relevant measurement dimension would then be the sophistication of these processes. That is, it would be useful to look at whether or not the application and selection process makes use of psychometric tests, whether or not there are clear criteria for selection, and whether or not interviews are well-structured.

The next processes are induction and training. Induction refers to the official entry of new employees into the organization. Once again, metrics that measure the sophistication of these processes are the most relevant. For instance, the duration of these programs in terms of time spent per employee may be a relevant metric. The effectiveness of induction and training, on the other hand, may be measured using targeted surveys of participants.

The final and perhaps most important HR process would be performance management, or how HR monitors and supervises the daily workings of the organization, with respect to its employees’ performance. It is important for these performance management processes to be coherent; that is, they should be orderly, logical, and they should fit well together. It is also important for these processes to have as large a coverage as possible; that is, as many aspects of organizational performance as possible should be managed. Relevant metrics would then be manpower and man-hours dedicated to performance management, percent increase or increase over time of employee efficiency due to management, and so on.

And of course, it is also important for performance managers to have a solid set of metrics to measure employee and organizational performance. These metrics would differ from organization to organization, depending on their business processes and the services they offer or perform.

So, in a nutshell, HR performance may be measured by looking at its processes, from selection to induction and training to day-to-day performance management. These processes may be evaluated using relevant metrics, some of which have been enumerated above. The measurement and evaluation of the HR aspect is a useful complement to the measurement and evaluation of the financial aspect of any organization, and thus should be given the same amount of consideration.

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The Balanced Scorecard Designer 2.0 was released with support of stop lights, a small red triangle will appear next to indicator if the performance value of indicator is too low. The stop lights are fully customizable and easy to use. More over, these stop lights will also be displayed in a dashboard report.

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There are a number of reasons why the choice to hire an MBA execute for top manager positions is desirable.

Human resource departments’ main objective is to provide companies with the best employees available. Naturally, HR officers will always pick for executive position an applicant who has the best educational qualifications, and the one with an MBA degree has great chances of being selected over candidates bringing along with them mere 4-year college diplomas. But the question is: Is it really necessary to hire an MBA execute for top manager positions?

This is the question that cannot be answered automatically with a yes or a no, although, of course, many will lean towards yes for obvious reasons. After all, the MBA holder with more years at school will supposedly bring more knowledge and expertise to the company. But that is not necessarily true.

Theoretically, at least, the MBA holder has advantages on his side of the fence. For companies with competent human resource departments, the MBA decidedly gets the extra points but there are other things to consider when deciding who to hire. There are such things as experience, verbal and written communication skills, and leadership, qualities that are not exclusive to MBA holders.

However, there is a tendency now for young professionals who started with a bachelor’s degree to go for higher studies precisely to advance through the ranks. It is expected that once you advertise for applicants for top management position, many applicants will be MBA holders, or least on their way towards getting one.

With all things being equal, meaning that all applicants have MBA degrees and the same experiences, it will be advisable for employers to assess the quality of the degree being presented. There are numerous post-graduate schools, many even offering online studies. Evidently, there will be differences in the quality of training being offered by these schools and it is logical for the good schools to turn out more adequately trained graduates.

One way to assess the worth of the MBA degree being presented along with other credentials is assessing the school that awarded the MBA diploma. The school curriculum provides an excellent basis for assessment. There should be heavy emphasis on leadership, including motivational skills, advanced theories on management techniques, research, and communication — written, verbal, and modern technology related ones.

Definitely, an MBA holder is a good top manager position hire but only when other things are considered in the hiring equation, like experience, leadership, the ability to put the message across forcefully and firmly, and to execute plans efficiently. These things are supposed to be the domains of MBA holders and consequently, they expect to be adequately compensated.

There is no substitute for a homegrown manager. This will eliminate some inconveniences resulting from phase-in periods and possible internal conflicts. Perhaps, the best way to develop future top manager from the ranks is to encourage current employees to take up that much delayed MBA studies. In fact, it is a common practice for companies to give priority to employees taking MBA studies for promotions as part of human resource development programs. It is natural for companies to hire an MBA execute for top manager positions, and what is more advantageous is hiring from within the current rooster of employees.

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