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Any organization, irrespective of its size, needs to know that their personnel are skillful and willing to learn. Actually, there is nothing strange about that:  they invest money into the employees and they wish to gain the expected result. People, who do not know much about the whole process of employment, wrongfully believe that it does not involve considerable financial investments.  Reality, though, proves quite the opposite: each step in this challenging procedure takes money. Consequently, the Human Resource Department should be very cautious and careful when conducting it, because if they make a wrong decision, it will affect the company’s performance sooner or later.
Actually, it is practically impossible to know in advance whether a particular employee will work well at his/her position or not. On the other hand, hiring qualified staff is the main aim of any HR department and they should try their best effort to do that efficiently. What is the way out then?  The answer is as follows: it is HR metrics that will help fulfill this challenging task.

The fact is that no matter how experienced the HR personnel is, they will still face problems when employing this or that person. This is because any applicant realizes the importance of presenting his/her skills, knowledge and job experience in the best possible way. In other words, he/she will be trying to sell his/her best qualities that can work well for the benefit of the company. Consequently, it is hard to predict whether the applicant will come up to your expectations or not.  This is where it is not recommended to rely solely upon your intuition and this is where the measurement tool (such as HR metrics) will come in handy.

When establishing this system, you should keep in mind that it will undoubtedly take time, money and effort. Still, the result will be definitely worth that. Luckily, there is something you can do to facilitate this process. Just get as much information about your prospective employees as you can. Interviewing and background checks will help a lot here. You should also learn if there is a particular quota you should hit when employing new workers. If so, then you should be even more careful when going through this process. Do not hire those people whose proficiency is quite questionable, even though there is a vague chance that this person may do well at new position. Hitting a quota with all possible means is definitely not the best solution. And, of course, do not build too many HR metrics. Ten will be enough to assess the potential employee. These are basic recommendations that will help you hire efficient personnel.

Why is it important to assess the productivity of the company’s workers? Simply because the more effective the staff is – the higher the performance of the company will be. Consequently, this will be reflected in the amount of profit it will generate. Despite of the fact that some organizations claim that they try their best effort to take care of their new employees, it frequently turns out that they do not do much to define whether the worker is proficient or not. Furthermore, managers of such companies do not know anything about different assessment tools and fail to define whether any upgrades should be made or not. As a result, such businesses find it difficult to withstand the growing competition at the market nowadays. Is there anything that should be done in order to improve the situation? Luckily, there is. Establishing HR metrics is what will help you find a good way out of this problem.

So, what is so special about human resource metrics? They are nothing more than a complex of measurable instructions, which are applied to help a company work out the most effective and affordable strategies required to enhance its performance. In addition, this tool is extremely effective in helping the company’s management assess capabilities and aptitudes of its employees.

Generally, HR metrics can help determine the approximate number of workers that may come up to the expectations of the company’s managers. This is how business owners will know for sure if the workforce is really worth those financial investments they make. Based on the obtained results, they will be able to retain skillful employees who are ready to work for the benefit of the company and eliminate those that do nothing for its advancement.

There exist several ways to establish the required HR metrics. Still, make sure you are not going to build too many of them. Otherwise, this may hinder the evaluation process, because you will get tons of unnecessary information to be analyzed. So, take your time and work out not more than ten metrics by means of using reliable and valuable information about your prospective team members.

Having collected the required data, do not forget to focus on key business aspects. It is important when building quality HR metrics. These aspects may involve employee engagement rate, personnel productivity, recruiting and retention rates, manager and customer satisfaction etc.  You may consider other factors as well, but these ones deserve special attention, since they will help you define what has to be improved and upgraded within your company.

Balanced scorecard is a fascinating and extremely effective business tool. There is no doubt about it. However, you can occasionally come across different stories that concern the failure of this system, especially if it is applied in human resources. Why does it happen and are there any ways to avoid such situations? This is what we will talk about in this article.

Basically, it is frequently underlined that BSC implementation may fail if not done properly. In other words, you should never hurry to introduce this system until you get as much useful information about it as possible. Thus, the prevailing amount of companies tend to use balanced scorecard in separate departments and underestimate the importance of executing this system when it comes to HR. This is because they believe that this business unit does not make serious contributions into the company’s development. Moreover, top managers are not satisfied with money expenditures that result from the work of this department. Unfortunately, it is one of the most drastic mistakes they can make, which will eventually lead to substantial financial loss. You just have to realize that the HR department seriously affects the work of other business units within the company, since it is responsible for its proper organization. In the long run, this can help a company go through tough times. Consequently, there is no sense in economizing money by means of implementing the HR balanced scorecard.

At present, we may differentiate between 3 basic steps in the process of human resources scorecard implementation. They include the application of BSC in HR, improvement of personnel satisfaction and operation efficiency and watching the effect, which may result in   better performance and higher revenue.

Unfortunately, you will hardly succeed in the implementation of this system if you do not know what it is and what processes exactly it involves. Furthermore, there are numerous key performance indicators (which are also frequently referred to as “metrics”) that constitute a significant part of balanced scorecard and, therefore, have to be closely studied. If you wish to learn the BSC background and the importance of this tool for the quality of HR performance, there are hundreds of online sources you can use. Another variant is to consult balanced scorecard specialists or even hire them so that they could execute this system professionally. This will undoubtedly help you avoid dozens of potential problems.

All in all, managing HR performance by means of using the balanced scorecard has never been a simple task. However, if you are serious about your aspirations and understand the benefits provided by this system, you will eventually get the expected result.

There are plenty of aspects business owners should consider if they wish to have profitable and reputable companies. HR performance and its proper management belong to the most significant of them, since efficiency and productivity of this sector are always beneficial for any organization. It is not a secret that professionalism of the company’s employees is inevitably connected with the quality of services it provides. And this is what exactly the human resources department is responsible for. That is why much attention should be given to perfecting the performance of this branch.

The majority of businesses, however, face complications when it comes to improving the competency of the HR department. That is why they find it important to use balanced scorecard in this business unit. The thing is that this system involves diverse key performance indicators or KPIs, which are generally applied when there is a need to find out how well this particular sector (or any other business unit) is operating at the moment. All the obtained results are used for the benefit of the company.

There are diverse BSC types used in HR branches. The first of them is represented by the scorecard used for the whole personnel, irrespective of their division. Its mission is to evaluate the overall performance of the human resources sector and improve something if required.
The next type is the so-called “hire balanced scorecard”, which, according to its name, controls the employment of new people as well as the current staff ranking. The number of these types is not limited to those mentioned above, since there are also the following kinds of HR scorecard: the training, outsourcing, retirement, motivation and leadership BSC.  All of them fulfill particular functions, which fall under the responsibility of any human resources department.

As mentioned above, the HR balanced scorecard involves several KPIs, which cannot exist without 4 basic perspectives, namely the financials, customer satisfaction, internal business processes and learning and growth. All of them are indispensably associated with the company’s strategy. Therefore, it is nearly impossible to implement the BSC in the HR department if you do not know how to apply those perspectives properly. Here, you should consider that there is a great difference between their usage in public and private sectors. For example, when it comes to the financial perspective in the public sector, all the attention is focused on the role of society in general and that of tax payers in particular, while the private sector primarily gives preference to stake holders only. If you understand this difference, it will help you modify the implementation of HR scorecard, which, in its turn, will affect the professionalism of your employees and improvement of their skills.

Human relations BSC or balanced scorecard is a tool that is widely used in the majority of private and public organizations with the purpose of making their management more effective. The basic mission of this system is to make sure that all the objectives of the particular company correspond to its strategies, which eventually should result in successful goal achievement and improvement of the company’s performance. It also helps avoid potential mistakes that can prevent you from reaching your business objectives.

Several decades ago, when this system was not widely implemented, top managers of diverse companies had to adopt serious decisions concerning their business development on their own. Unfortunately, they frequently focused only on the most influential financial factors, without paying special attention to other aspects, such as the level of customer satisfaction, the professionalism of the employees, the quality of services offered etc. This is exactly where they made a huge mistake, because effective performance improvement implies the analysis of all aspects that can contribute to the company’s profitability. The work of the HR department is one of those significant factors, which should never be overlooked.  Nowadays, the operation of this business unit can be improved by means of adequate BSC implementation, which involves the profound analysis of diverse business aspects, especially those that are related to personnel advancement and improvement of its productivity.

A lot of people may agree on the fact that some targets set by companies seem unclear and many employees do not feel involved in the main processes that occur inside the company. Balanced scorecard generally aims at making the goals of the organization more realistic and practical with the involvement of its staff. This system makes people feel that they really contribute to the company’s development as well as to the achievement of specified goals. HR BSC is also efficient when it comes to keeping track of the personnel’s professional advancement with regard to their role in the company’s development. This is how you will know which resources will be required to obtain the desired result.

The human resources balanced scorecard typically aims at quantifying the most significant aspects of the organization that are associated with the development of its performance. It is generally assumed that it is impossible to make any effective improvements until you do not know for sure if they are really required. If applied properly, BSC helps you determine that quickly and effectively.

???Though all company divisions play a great role in its development, the human resource department is still the one that is said to make a significant contribution into this challenging process. This is because all employees who work here bear responsibility for what they are doing. That is why it is of key importance both to keep track of their productivity and to make sure they are satisfied with their working environment. This seems to be quite easy at first sight. The truth is, however, that if you are the owner of a large company, you will hardly be able to cope with this task properly. Therefore, the application of HR metrics will be quite effective in this respect.

Human resources metrics prove to be a superb tool when it comes to HR evaluation.  Nonetheless, large businesses frequently face problems when working them out.  As a rule, there are two basic mistakes they make when implementing HR metrics, namely the development of vague metrics and creation of a few metrics, which seriously complicates their maintenance and application. Let us have a closer look at both faults.

The first mistake is the most typical and implies that people fail to cooperate effectively with the only purpose to achieve common goals. In this respect, the usage of human resources metrics can really pay off. As soon as the top managers of the company develop them, they should submit them to the chief financial officer, who will further decide whether they can be effectively used for the measurement of the company’s performance. This person also evaluates their realizability and strategic mission. If everything is all right, then the metrics can be successfully implemented.

Now, let us proceed to the second mistake, namely the amount of HR metrics. It is frequently assumed that the less their number is, the more effective they prove to be. Basically, a large company can use up to twelve metrics. That is the optimum alternative. Otherwise, you will find it quite problematic to monitor all of them. Apart from this, it is highly recommended to organize company HR metrics into several levels. Thus, the first tier should deal with the employees’ productivity. The most suitable metrics, which can be applied here include the measurement of the apparent improvement (this concerns the efficiency of your personnel), expenses per one generated income, the amount of money spent on each worker (if there are any positive changes) and the financial value of the amplified staff productivity.

The next tier deals with the measurement of the personnel involvement. The HR metrics, applied here, include the approximate percentage of staff members, who are enthusiastic about what they are doing and that of those who think that the company’s management demonstrates anticipated behaviors when evaluating their work.

Finally, there is always the necessity to measure the advantages and the compensation level. The best human resources metrics used here involve the percentage of personnel members who demonstrate satisfaction with the reward system and that of those who work well, but get the above average wages.

The work of the human resource department is really responsible and complicated. This is because people working there should demonstrate ultimate proficiency and skills. The thing is that it is not that easy to define the best applicant for this or that position, especially if there are lots of them on the list. Consequently, the use of human resources metrics pays off in such situations. What are the advantages of their application? This is what we will focus on in this article.

When it comes to HR metrics, it is of primary importance to understand their essence first. In simple words, they are like guidelines that are applied by companies in order to work out effective commercial strategies, which are initially oriented at the enhancement of the employees’ performance. Personnel evaluation is generally involved in these metrics.  Why is it important? The fact is that it is quite challenging to assess the competency and professional integrity of an applicant right from the start, especially if you lack recruitment skills and years of experience. There is nothing strange about it, since even the most qualified HR experts frequently face complications when it comes to this procedure. That is exactly why any human resource department cannot go without the usage of the above mentioned metrics.

The next question is: how should this HR metric system be developed properly in order to become the most effective? What you should start with is gathering information about the company’s personnel. Keep in mind, though, that not all facts you manage to find will come in handy to you when working out HR metrics. Instead, you will have to learn how to sort out the most useful aspects. Basically, you will require not more than ten metrics for the effective assessment of the company’s staff. This is the number recommended by the majority of experienced recruitment specialists.

There is one more significant point to remember when it comes to developing HR metrics. The point is that this process involves the evaluation of all business aspects, including personnel engagement, their productivity, the level of manager satisfaction etc. Furthermore, you should be concerned not with the recruitment aspect only, but with the staff retention as well.

The list of factors to be considered here is not limited to those mentioned above, however. The keynote idea is that a company has to be extremely goal-driven in order to ensure the effectiveness and successful implementation of HR metrics. It means that its managers should set proper objectives and realize what their final aim is.  That is the key to success.

Human resource management is not just all about conducting seminars for employees, running tests and questionnaires, as well as thinking on how to cut back expenses related to maintenance of personnel. HR managers have a wide range of different tasks, all of them are extremely important in terms of strategic management. It is impossible to succeed if at least one business unit in a company deviates from strategic goals. This especially concerns HR department since its employees are responsible for coordination of personnel efforts in all business units. Thus, a HR department is both a business unit that has its own goals and the one that helps coordinate efforts of other departments.

The recent financial crisis demonstrated that educated and loyal personnel is a very valuable asset. Sometimes, even huge investments cannot save the company that has been plunged into crisis. Sure, any company must have resources and make investments in own development. At the same time, it will be all in vain unless these initiatives are driven by competent and dedicated employees.

For this reason, HR management needs constant evaluation. Moreover, as mentioned above, every business unit, including HR department, should coordinate own goals and measures with those of the company. Thus, a HR department really requires a tool that is used both for strategic management and performance evaluation. BSC is really such a tool.

It should be stated that BSC is widely used in HR. Although many managers as well as business owners and investors do not understand the true power of HR, excellent personnel management does contribute to implementation of company strategic goals.

BSC does not only provide top management with complete information on HR performance in the company but also demonstrate how well company strategy is being executed and whether or not HR goals meet requirements of company mission and strategy. Lots of companies also implement BSC in HR departments just to test this popular framework.

As to composition of HR BSC, it does not much differ from scorecards that are developed in a variety of other industries. Of course, every industry and department require individual approach to BSC design, however there are certain universal rules and strategies that are applicable for HR too. Thus, there are 4 perspectives in a HR BSC: financial, customer, internal business processes, learning and growth. The only difference is that customers in this case are company employees.

Some managers and business owners do not understand why they need to invest in HR department. This business unit seems to do nothing. Of course, this is what they think. In fact, it is very easy to believe in a common misconception about HR managers. These people do not produce and sell anything. They render no services and provide no support for customers. However, HR managers are responsible for a very subtle and financially challenging task – to hire, educate and retain personnel in such a way so that employees are satisfied with wages and working conditions and company management spend adequate amount of money for personnel.

Poorly working HR department may plunge the entire company in crisis. Besides, the HR business units may cause financial troubles. For example, the company may simply spend too much money to hire employees, even competent and enthusiastic ones. As a result, company goals and business plan may deviate from HR goals and measures which are OK by themselves and inappropriate in terms of company strategy. That is why it is necessary to use special tools to align strategies of various departments, including HR.

Lots of managers prefer using Balanced Scorecard (BSC) which proved to be a universal framework suitable for all industries and sectors. Balanced Scorecard in HR will help in resolving the following tasks:

• Optimization of HR costs. As known, every HR department requires money to hire and educate personnel. Of course, company owners want to decrease these expenses. At the same time excessive saving may result in employment of unqualified personnel. BSC will help locate weaknesses in company hiring policy.
• Alignment of HR strategies with mission and strategy of the company/corporation. All huge companies consist of numerous departments. Sometimes it happens that various strategies may have discrepancies and contradictions. BSC is the tool that helps managers better understand company strategy and align goals and measures of various business units, including HR.
• Optimize HR performance. If there are ways to hire qualified personnel at low costs, it is necessary to find them. Of course, BSC will not do the job for you, but creation of HR scorecard will demonstrate all weaknesses of current HR policy. At the same time it should be noted that HR managers must be ready to act based on the obtained BSC results.
• Motivate HR personnel to show better performance.

If you want to change your company for better you should definitely start with the strategy. However, the next thing to focus on is company personnel. It does not matter how much money you have invested in new project, R&D and personnel education. If your employees are not ready to operate on a new level, all those investments will be wasted. What does employee performance depend on? Of course, employees must be motivated and knowledgeable on company goals. At the same time, there is a department in every big company that assumes personal responsibility for hiring employees, their education and creation of favorable working environment. This is HR department. This type of business unit drew attention during the recent decade when it became understood that employees performance directly depends on HR performance of any company. Since every commercial organization should have strategy in order to achieve success, HR goals are inseparable part of this strategy. Consequently, evaluation of HR performance is a must!

So far, Balanced Scorecard is the most effective tool to measure compliance of HR department to company goals and evaluate current performance of HR managers and the department in general By the way, implementation of BSC in HR department is a popular method to test BSC. Very often HR departments require no sufficient funding, thus BSC implementation becomes less expensive in contrast to, for instance, sales departments or R&D where many million investments may be involved.

Also, implementation of BSC in HR department is a good way to prepare employees for a full scale implementation of Balanced Scorecard in a company. It is not a secret that Balanced Scorecard yields positive results only in case lots of company employees are involved. So, by starting measurement of HR managers’ performance, top managers may test-drive this framework and look at reaction of employees. Of course, BSC is oriented at long term results, however, even short terms benefits may demonstrate its power.

It is important that HR department accepts BSC and fully understands its concept since further implementation of BSC will depend on efficiency of HR department which will assist in introduction of BSC concept to company employees (organization of workshops, seminars etc). The first steps in BSC implementation are said to be the most important ones and often compared to building of house foundation. Proper implementation of Balanced Scorecard in HR business units and further education of personnel are preconditions of BSC success.