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.