Professional Documents
Culture Documents
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HR managers today are more involves in partnering with their top manager in both designing and implementing their companies strategies.
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The Scorecard is an analysis technique to translate an organization's mission statement and overall business strategy into specific, quantifiable goals and to monitor the organization's performance in terms of achieving these goals.
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Monitors present performance, but also assesses how prepared a company is to perform well in the future. Built around TQM Principles
Examines specific areas to create a balance
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WHY MEASURE?
Strategic feedback - to show the present status of the organization from many perspectives for decision making Diagnostic feedback - assess various processes to guide improvements on a continuous basis Determine trends in performance Determine which metrics should be tracked based on feedback
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WHAT IS MEASURED?
Outcomes are lagging indicators, and are the
final results of all of an organization's products and services (for example, enhanced mobility or, safe drinking water).
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THE FINANCIAL PERSPECTIVE There is a broad range of traditional financial questions that can be asked. The questions depend upon the standards in the various industry and may include financial measures such as return on investment (ROI), revenue enhancement and growth, risk, and improved productivity.
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What will be valued in the future, and how will innovation deliver future values?
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"A core group of three employeebased measures--satisfaction, productivity and retention--provide outcome measures from investments in employees, systems and organizational alignment.
Kaplan & Norton, 1996
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THE LEARNING & GROWTH PERSPECTIVE The learning and growth perspective supports the other three perspectives. Ultimately, if the workforce is not enabled with knowledge, innovation and advanced skill sets, the workforce will be unable to build and enhance innovative business processes, that in-turn will help retain and acquire new customers, and ultimately achieve financial objectives.
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OUTCOME METRICS
You can't improve what you can't measure. Metrics must be developed based on the priorities of the strategic plan, which provides the key business drivers and criteria for metrics managers to watch. Decision makers examine the outcomes of various measured processes and strategies and track the results to guide the company and provide feedback.
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Some of the metrics tracked in HR are Absence Rate, Time to Fill and Turnover Cost.
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HR Expense Factor
HR expense Total operating expense
Sources: Robert Grossman, Measuring Up, HR Magazine, January 2000, pp. 2935; Peter V. Le Blanc, Paul Mulvey, and Jude T. Rich, Improving the Return on Human Capital: New Metrics, Compensation and Benefits Review, January/February 2000, pp. 13 20;Thomas E. Murphy and Sourushe Zandvakili, Data and Metrics -Driven Approach to Human Resource Practices: Using Customers, Employees, and Financial Metrics, Human Resource Management 39, no. 1 (Spring 2000), pp. 93105; [HR Planning, Commerce Clearing House Incorporated, July 17, 1996;] SHRM/EMA 2000 Cost Per Hire and Staffing Metrics Survey ; www.shrm.org.
Figure 15
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Revenue Factor
Revenue Total Number of FTE
Time to fill
Total days elapsed to fill requisitions Number hired
Sources: Robert Grossman, Measuring Up, HR Magazine, January 2000, pp. 2935; Peter V. Le Blanc, Paul Mulvey, and Jude T. Rich, Improving the Return on Human Capital: New Metrics, Compensation and Benefits Review, January/February 2000, pp. 1320;Thomas E. Murphy and Sourushe Zandvakili, Data and Metrics -Driven Approach to Human Resource Practices: Using Customers, Employees, and Financial Metrics, Human Resource Management 39, no. 1 (Spring 2000), pp. 93105; [HR Planning, Commerce Clearing House Incorporated, July 17, 1996;] SHRM/EMA 2000 Cost Per Hire and Staffing Metrics Survey ; www.shrm.org.
Figure 15 (contd)
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Turnover Costs
Cost to terminate + Cost per hire + Vacancy Cost + Learning curve loss
Turnover Rate
[Number of separations during month Average number of employees during month] 100
Figure 15 (contd)
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REFERENCES
Dessler, Gary. (2005). Human Resource Management, (10th ed.). Prentice Hall Kaplan, R. & Norton, D. (1996). The Balanced Scorecard: translating strategy into action.
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