HR department deals with lots of issues that need to be addressed in the company, from hiring and education of personnel, to organization of suitable working schedule, establishment of friendly working environment, measurement of employee satisfaction and development of fair and comprehensive compensation system. Effective HR management pretty much predetermines efficiency of employees, both group and individual. There is a rule in business – if you want to improve something, you first need to set goals and measure current performance, i.e. where you are at the moment. In case of HR department, the company should first set priorities based on strategic goals. HR policies differ depending on strategies. For example, it may be more suitable for a company to hire experienced employees for mid level managerial positions (and thus pay competitive salary) than to hire college graduates with no experience and invest money in their education and coaching. At the same time, some businesses possess excellent education tools and opportunities, so education becomes fast, cheap and effective.
HR BSC differs from other scorecards since it is all focused on employees. There are two parties in every company – personnel and company management, owners and shareholders. Each party pursues own interests. With BSC it is quite possible to agree these interests. Thus, if an employee wants to develop skills and acquire new knowledge he or she should be offered such an opportunity.
HR BSC will help find balance between interests of HR department, employees and company management. Of course, this strategic management and performance evaluation tool will not solve all problems overnight. However, a step by step implementation and maintenance of BSC in a HR department may certainly help optimize HR performance. Benefits of HR BSC use are obvious:
- Cost savings. As known, every company needs to spend money to hire personnel and educate them. HR optimization may lead to decrease of cost per hire which in its turn may improve a series of other indicators, related to financial category.
- Employee satisfaction. Satisfied employees will have satisfied customers. This is perhaps what every company is looking for. Besides, satisfied employees are eager to show top performance, especially if they are properly motivated. Introduction of HR BSC should be definitely accompanied by introduction of a comprehensive motivation system both for employees and HR managers.
- HR BSC will help align HR and company strategy since there should be no contradictions.
