Why performance of HR department must be evaluated

It seems like no one can deny the importance of HR management.  Sure, there are some business owners and top managers who still think that the supreme value for their company is money, investments, equipment and production facilities, real estate etc.  But the recent economic crisis has proved that those companies who possessed the most efficient and intelligent human resources managed to survive, and some of them even managed to conquer new market shares and attract new customers.  Business is run by people, no matter how efficient and smart IT solutions can be.  For this reason, it is important to measure performance of human resource department.  The problem is that HR department does not earn money, and just to the contrary it spends it in order to hire, educate and retain the best professionals in a certain business area.  This is sort of investment in human resources, which proved to be one of the most effective long-term investment tools.

HR BSC implementation

HR BSC implementation

Poorly performing human resource department may waste company money even if HR managers hire competent employees.  There are so many factors to be taking into account when working with personnel.  Using balanced scorecard system, it is possible to evaluate human resource performance and align HR goals with the strategic goals of the company, its mission and values.

Balanced scorecard evaluates key performance indicators which represent critical success factors for a certain company.  The right choice of KPIs is the first correct step in the process of BSC implementation.  Of the choice of key performance indicators in human resource management depends on the company strategy and its organization structure.  For some companies, it is cheaper and more convenient to hire inexperienced employees and then educate them, while others are looking for experienced professionals who don’t need any education and start-up courses.  As said above, it depends on company strategy, goals, its structure and specific character of the business area.

Major HR tasks

Major HR tasks

Evaluation of HR performance is a must for big companies with numerous departments, branches and business units.  Excellent HR performance contributes to improvement in communication and feedback system, the system of education, training and coaching. Proper HR policy improves organization climate and employee satisfaction.  As known, satisfied employees usually have satisfied customers who then turn into regular customers for the company.

Use of balanced scorecard for HR performance is recommended for heads of human resource departments and top managers of big companies who want to optimize work of their enterprises and firms.

  • Share/Bookmark
Balanced Scorecard Free Training Balanced Scorecard Free Training