Measure the Impact of HR Deliverables

The emergence of the HR Scorecard concept, preempted by the now classic work of Becker, Huselid, and Ulrich in The HR Scorecard: Linking People, Strategy & Performance (2001), greatly advanced the ability to measure how human capital deliverables contribute to an organization’s success. HR functions continue to struggle with appropriate and meaningful measures to quantify their value, and the HR scorecard provides a measurement tool that distinguishes among the many HR deliverables and their influence in implementing the business strategy. The HR scorecard typically complements an organization’s balanced scorecard, and many of the HR scorecards in practice utilize the standard four measurement dimensions—financial, process (operations), customer, and people/human capital management (strategy)—in their HR scorecard design. In the past, HR has focused primarily on operations and as such the most often utilized metrics have involved measuring processes in terms of cost, quality, and cycle time. Clearly, HR must excel at these but when HR is viewed as a strategic partner, these types of measures provide little insight into the value HR adds nor its linkage to a company’s business strategy. The HR scorecard provides the HR function with a model to measure the performance of people practices from multiple perspectives. The real challenge is for HR to produce a scorecard that contains metrics that generate value-related information so that it can measure the impact of its deliverables on the business.