In most cases mistakes in BSC implementation are inevitable. The reason is that no one can foresee developments in the market and the world economy in general. That is why even the correctly developed scorecard may not fully work under certain circumstances. The same concerns scorecards that are introduced on a department level. It is not a secret that lots of companies prefer to test BSC on a department level before investing money into a full scale implementation. Perhaps, HR department is one of such business units.
Human resource management has become rather popular in all industries and the recent financial meltdown demonstrated a true power of HR departments. It would be fair to say that company personnel is the most valuable asset for any business. That is why it is important to efficiently manage employees and create mutually profitable working conditions. This is where BSC helps. At the same time, BSC mistakes are inevitable however in most cases avoidable. Let’s name a few of them:
- When developing HR strategy and measures, top managers totally forget about interests of personnel. If HR policy is one sided it is doomed to fail due to the fact that company employees will not accept it. Measurement of cost per training sessions or training cost per employee is OK. However, one needs to measure efficiency of training and employee satisfaction with training sessions as well.
- HR policy is well developed however it contradicts company strategy. For example, HR BSC may imply decrease of time per hire which is good for HR department in the short term. The sooner vacant positions are occupied by new employees the sooner the department can be fully functional. However, aiming to get excellent BSC results, HR managers hurry up with hiring employees some of whom may not possess necessary experience and skills. In the long run the company will never benefit from such employees as it needs to spend money for education of incompetent personnel.
- Strategy and indicators remain on paper. This is a very common mistake, not only in HR. Employees need to work with BSC, not just hold the first introduction seminar. Every HR manager needs to understand his/her role in the department. That is why strategic goals should be clear. Balanced Scorecard will visualize HR strategy with strategic maps, so that HR personnel gets involved in changing the department for the better.
