How the HR Scorecard Helps Actualize Cross Functional Excellence in Organizations

How the HR Scorecard Helps Organizations

What is the HR Scorecard? It is a tool that measures the performance of the Human Resources (HR) Function using data and aligns the same with the other functions in terms of costs and benefits.

In other words, the HR Scorecard is a useful tool to record the costs incurred by the HR Function for the various activities and processes that are part of the function and then tallies the benefits that accrue from these various costs.

Further, the HR Function is also useful to check and measure how well the HR Function is aligned with the overall organizational objectives and the cross-functional benefits and linkages with the other functions.

For instance, using the HR Scorecard, the HR Managers can present senior leadership and management with data about how well the HR Function is faring and contributing to the success or otherwise of the other functions as well as the larger organizations.

To take examples, the HR Scorecard provides data on the costs incurred by it for recruitment and training of employees and then measures the outcomes or the benefits accrued on account of such costs. Indeed, using the HR Scorecard, organizations can become truly integrated and systemic in nature since there is a clear basis of accounting for the usefulness or otherwise of the various activities and processes of the HR Function.

How the HR Scorecard Helps Actualize Cross-Functional Excellence

Thus, in this manner, the HR Scorecard can be used to actualize cross-functional excellence by integrating the HR Function with the other functions and then measuring its relevance and usefulness apart from the efficiencies and synergies that accrue from such integration.

Indeed, using the HR Scorecard, the HR Function can no longer be standalone or separate from the overall systemic nature of the organization.

For instance, the HR Scorecard can be used to track the success of specific recruitment and training efforts for each of the functions such as Marketing, Operations, Finance, and other such functions.

Further, since the HR Scorecard essentially keeps score of the efficiency of the HR Function with regards to the other functions and the larger organizational objectives, the HR Head or the HR Manager can have a “seat at the management table” since there is a clear basis due to the HR Scorecard to keep track of how well the HR Function is aligned with the broader organizational objectives and the cross-functional efficiencies.

For instance, using data-driven measures, organizations have an opportunity to measure how well the HR Function helps the other functions and in addition, by tallying how well the HR Function serves the broader organizational needs, there is clarity on how aligned the HR Function is to the rest of the organization and in this manner, actualize cross-functional linkages and excellence.

How the HR Scorecard Helps Organizations to Treat Their Employees as Assets

Moreover, using advanced technological tools such as Big Data Analytics and AI or Artificial Intelligence; organizations can track the risks and anticipate the future challenges that can arise.

For instance, if the senior leadership feels that the ROI or the Return on Investment from specific employees is not in the broader objectives and needs of the organization, they can simply change the way the recruitment and training of such employees are being done.

In addition, given the advent of the services sector where the focus of the organization is on treating employees as sources of sustainable competitive advantage and as key assets or the only assets, the HR Scorecard can indeed help organizations in the services sector to measure the ROI as well as the efficiencies that accrue from them.

Further, given the fact that the HR Scorecard allows the other functions to “tie in” their objectives with the objectives of the HR Function as far as employees and human resources are concerned, there is scope for genuine and true cooperation and coordination as well as integration and cross-functional linkage between such functions and the HR Function.

As management theory states, how well the various parts of the system work together determines the synergies from the whole that are greater than the sum of the parts, organizations can indeed reap such synergies as well as derive efficiencies from the integration.

How the HR Scorecard Helps in Designing Appropriate Risk and Reward Systems

It is also the case that the HR Scorecard can also help organizations in aligning risk and reward measures.

For instance, if the data reveals that organizations are rewarding employees lesser than what they deserve as well as rewarding some employees more than the others or those who deserve or otherwise, the incentive and the pay and perk system, as well as specific employee bonuses, can all be aligned to the true needs of the organization.

Apart from that, in times when cross-functional expertise is much sought after and where generalists and “Jacks of All Trades” are needed, the HR Scorecard can indeed help organizations to identify such individuals and reward them appropriately so that they are motivated to perform better.

Thus, the HR Scorecard is indeed an extremely useful tool to foster cross-functional excellence as well as actualize synergies from such cross-functional linkages in addition to reaping the efficiencies from rolling out data-driven measures on a mass scale.

Lastly, the HR Scorecard also helps senior leadership to get a Bird’s Eye View of the HR Function as well as track the nuts and bolts or the micro measures of success of the HR activities and processes.