UNIT- 06 Creating HR Scorecard:

1. Assessing HR Programmes:
 Assessing HR Programmes should be structured to generate information of the
impact of training on the reaction, on the amount of learning that has taken
place; on the trainee’s behaviour, and its contribution to the job/organisation.
 Any attempt to obtain information (feedback) on the effect of HRD program
and to assess the value of training in the light of that information for further
training.
 Assessing the effectiveness of the HRD programmes in terms of the benefits to
the trainees and the company must look into the following aspects – process of
collecting outcomes to determine if the training was effective, from whom,
what, when, and how information should be collected.
 Assessment of HRD programmes helps in gauging the degree to which
training or other HRD programme achieves its intended purpose.
 A more thorough assessment can involve a subsequent round of training
assessment forms, or an assessment interview, which are conducted a few day
or weeks after the training.
 This allows the learner time to reflect on what they have learned and to have
put at least some of it into practice.

1.A. PURPOSE OF ASSESSMENT:

1. Its focus is on determining the extents to which the goals of HRD programmes
have been achieved.
2. Its helps in spotting the strength and weakness of the HRD programme.
3. It is conducted to collect data and help in assisting the future programmes
related to marketing field.
4. It ensures whether or not the HRD programme was specific as per the
requirements.
5. It helps in selecting the specific participant or members for future programme.
6. It also helps in spotting the most appropriate members among all the
participants.
7. It helps in preparing database that can provide support to the management in
making decisions.
8. It helps to determine the validity of tests, cases and exercises used in the HRD
programme.
9. It facilitates the comparison of cost and benefits of HRD programme.
10. It determines whether or not the HRD programmes were the right solution for
the training need identified.
1.B. DADA COLLECTION FOR HRD ASSESSMENT:
Data collection is very important for the purpose of training because it act as the basis
for its assessment and monitoring, need for correct information become very
important during the phase of evaluation and hence collection of data is done to
provide assistance to evaluation phase.

Usually, the professional of the performance training and human resource

depends on the accurate data due to following reasons.
1) To compare the best and the current level of performance of employees.
2) To decide the present status of training in some special skill.
3) To perform the analysis of needs for training of employees.
4) To analyse whether the training provided to employees are as per the learning
needs or not.

METHODS OF DATA COLLECTION FOR HRD ASSESSMENT:

Methods used for data collection for HRD assessment are as follows:
1) Questionnaire: It is a systematic process of gathering information for any
research. In questionnaires, a set of questions is given to people in order to
collect facts and figures for any particular research.
2) Tests: Generally, tests include written test which is conducted to test the
trainee’s knowledge and performance.
3) Attitude Surveys: It is a very different type of questionnaire for gathering
the information related to training evaluation. It gathers information
regarding employee attitude about workplace, policies, procedures,
supervisors, and the organisation. To see the changes in employee before
and after programme measurements are done.
4) Interviews: In Interviews training staff, the participant’s supervisor, or an
outside third party can organise the interviews. An interviewer can get
answers to those questions which cannot be acquired from the
questionnaire, but conducting an interview, interviewer should be skilled.
5) Focus Groups: The focus group is a small-group discussion in which
group members provide their inputs. It is conducted by a qualified
facilitator. It is basically designed to seek qualitative judgements on a
specific topic.
6) Observations: Observation method is very much related with attitude
surveys and it is a continuous process of observing the employee starting
from the beginning till the end. For observation to be effective, it is very
important that the personnel acting as observers should have proper
training.
2. ENGAGEMENT AND TURNOVER:

 It is assumed that there exists a correlation between engagement and turnover.

However, the relationship between both the concepts can be determined by employing
this popular query along with other sample data.
 The first step is matching the data from each departmental engagement survey with
their respective rates of turnover. A basic data plot is chalked out so that a complete
view of the information can be obtained. Any questionable data can be found out
quickly in this manner.
 What if there was a questionable data? What if the engagement score is 90 and the
respective rate of turnover at 27%? What can be done with this data point? Would that
odd be found?
 This point is known as “outliner” in data analysis. This is because of bad information
in the data analysis. It should be examined before eliminating it from the data
analysis.
 It can be supposed that someone made a manual data entry mistake in our spread
sheet and that was the cause of the “outliner”. It is corrected and the analysis can be
preceded further.

 The line of best fit is in the graph above overlying the original data. The negative
value in front of (engagement) reveal that turnover and engagement are negatively
correlated, i.e., as engagement goes up, the turnover can be expected to go down.
 In fact, it can be said that every time the engagement scores goes up by 1, a decrease
in turnover of 0.28% can be anticipated.
  While conveying the information to people outside of the analytics world, the
message should be kept as simple as “if this goes up by this amount, this other piece
of information will go down by that amount”.
 From the data, it tells us that engagement is not only the factor affecting turnover,
other internal and external will account for variation. But, it is sufficient to find one or
more of the greatest contributing factors are enough to set forth plans.

3. FINDING MONEY IN ANALYTICS:

 Analytics capabilities are being used to help companies optimise people, processes,
and technology. From staffing to inventory to raw materials, analytics can give
companies visibility into their precious resources help ensure that those resources
deliver the optimal value.
 The “test and learn” approach, outlined in analytics- all about the money, helps ensure
that small-scale changes are tested thoroughly before they are rolled out to the larger
organisation, minimising costs and risk while improving outcomes.
 Saving money with analytics can also mean reducing investment in the organisations
analytics infrastructures (services, apps, and systems used).
 Organisations can make money with analytics through incremental revenue gains
from sales, marketing, and new product development activities.
 Making money from big data depends on a company’s ability to effectively leverage
the data that is available for analysis.

Here are five examples of companies can use big data to their financial advantage:

1) Make time to compare different variables to see which perform or convert better.
2) Obtain data from the broadest range of sources possible to get a clearer understanding
of the customer experience.
3) Process data in real-time, enabling rapid innovation that meets shifting demands.
4) Remember to adapt to trends, continue to test for optimisation to see where
performance could be improved.
5) Utilise a combination of qualitative research and quantitative research, rather than
relying too heavily on one or the other, to get a more complete picture.

4. LINKING HR DATA TO OPERATIONAL PERFORMANCE:

Considering the same employee feedback survey previously mentioned, historically, it

can be felt that the higher these scores, the higher the level of performance for the
company. In this regard, several metrics were selected which can be considered to be
“definition of success”. With a little data crunching and statistics, all was known.
 Now it can be determined whether the programs associated with trying to raise annual
feedback scores would actually produce an increase in operational performance, at
least for the operational metrics selected.
What does this mean exactly? If the results showed that the annual feedback scores
were correlated to the operational metric, HR could clearly say that for an HR
programme that successfully increases score by 1%, an increase of x% in the
operational metric can be anticipated.

A decade ago, an analysis was prepared of a company’s sales and determined just
how much of their sales comes from their top customers. This allowed the company to
segment their customers base into A, B, or C customer designations.
In the same respect, the products which were offered by this company were
segmented by the level of contribution to the overall profit. The same A, B or C
designation was used. In this case, ‘A’ products provided larger contributions to the
overall profit and on the opposite extreme ‘C’ products produced a negative profit.
The company then adjusted their product strategy to eliminate ‘C’ products by
discounting them or adjusting the price to the market.
The exact same analysis can be performed on people. This is categorised under HR
analytics but it is absolutely no different than analysing products and customers.

One job role that almost every business contains is the sales representative and it would not
be uncommon for a company to track the sales brought in by each representative. Taking a
look at a company that has 48 sales representative and generates $42.3 Min sales and
examining the amount of sales generated by each rep and sorting them from highest sales to
lowest sales. Out of 48 reps, 12 reps are outperforming (that is 25%,) they are called as ‘A’
players. The remainder of people in this seems to generate sales within a fairly range, they are
Called as ‘B’ players and those employees falling below the minimum goal are ‘C’ players.
 By moving another step, further, one can overlay each employee’s latest performance
rating. The company uses a whole number rating scale of 1 to 5.
It can be anticipated that the more sales a rep generates, the higher his/her
performance rate would be.

Before jumping to conclusions and announcing that the performance numbers do not
make a lot of sense, the following discussion serve as a lesson in proper interpretation
of results. Sales rep he is not judged by its sales, others factors like
Whether he performs well with his team, whether he completed training goals, etc.
It is easier to generate sales at a lower margin than a higher one. However, it is
difficult to obtain profit data where as sales information is readily available in most
companies.
For the job category of a sales rep, the metric is financial but for other job categories,
there will not be a direct link to a dollar value.

5. HR DATA AND STOCK PERFORMANCE:

There are several brave consulting companies and individuals out there that have
attempted to prove a statistical correlation between stock prices and HR metrics.
Trying to correlate stock performance with the amount of money a company invests
in its human capital is one example.
However, given the large swings in stock prices witnessed in recent years due to the
impact of global events and instabilities, it is clear that external forces beyond the
control of corporations are having more of an impact on stock price than internal
events. For that reason, individual companies to determine whether such a study

6. CREATING AN HR SCORECARD:

Definition: The HR Scorecard matches business strategy against HR deliverables and

objectives to provide a statistical basis by which HR efficiency and contribution
strategy implementation can be measured. or
HR Scorecard which are tools to measure how well the HR function is aligned to the
overall strategic goals of the organisation. In other words, HR now was expected to
align its recruitment, compensation, and employee retention strategies to the
organisational strategies.
HR Scorecards provides the organisational leaders with metrics and data in tangible
terms about the payoffs and the benefits from HR processes and activities.
 5.1. Process of Building an HR Scorecard:
While building an HR Scorecard, the below mentioned process needs to be followed
by every unit of the organisations:
Step 01: Discover the chief performance drivers of the R&D unit. They might be
productivity improvement and revenue growth.
[Revenue growth ultimately derives from increased customer satisfaction, which is
when boosted by product innovation and reliable delivery schedules. Productivity
improvement derives from the maintenance of optimal production schedules, which in
turn depends on the maintenance of appropriate staffing levels].

Step 02: Understand the role played by the HR in the discovered drivers these can be
the deliverables needed to aid the drivers. Example: when the HR reduces recruitment
cycle time, it supports a high-talent and stable staff. This subsequently supports
delivery schedules that are reliable, and thus growth in revenue.

Step 03: Categorise elements that need to be gathered to create the defined
deliverables. Elements can be validated competency models, retention policies.

Step 04: Choose metrics to access the development towards presenting the
deliverables that have been categorised.

Step 05: Plan visual cues and icons that show how performance has been assessed on
every metric.
For example, a red circle depicts ‘unsatisfactory’, a yellow one depicts Cause for
concern and green indicating ‘satisfactory’. These signs make it easier for managers
to find the performances that have fallen below the target performance of the metric.
Such visual icons also help people to identify when the target performance will be met
or will exceed the actual performance.

7. CONSTRUCTING AN HR MEASUREMENT SYSTEM:

Following dimensions are used in the construction of HR Scorecard:

1) High Performance System of work:

1. Effective HR policies, practices and processes are the basis of HR’s strategic
influence. HR manager need to evaluate, implement and represent these on
HR scorecard.
2. Establish competency model as basis for recruiting, managing and rewarding
R&D employees.
3. Extend appraisal and establish career development process.
 2) HR Alignment:
1. Internal and external selection process based on competency model.
2. Recruitment process to ensure high-quality recruits.
3. Retention policies developed and implemented.

3) HR Efficiency- Core Versus Strategic Metrics:

1. Minimise recruitment costs.
2. HR manager have the authority to evaluate accidents rate, accidents safety
ratings, average employee tenure, average cost to hire for dispute resolution,
cost per hire, cost per injuries etc., once he evaluated these metrics he will
come to know the efficiency of HR.

4) HR Deliverables:
(Leading indicators are measurements that predict future business growth called
HR Deliverables).
1. Ensure R&D employees have required technical competencies.
2. Low staff turnover amongst high-performing R&D specialists.

8. GUIDELINES FOR IMPLEMENTING A HR SCORECARD:

1) Leading Change:
Change is more likely to occur when top leaders sponsor it. To effectively
implement change, there should be two leaders or sponsors- one is head of human
resources department as the primary sponsor, and second head of the business, or
head of specific division within the company, secondary sponsor.
Primary sponsor is responsible for assigning task and secondary sponsor is
responsible for focussing on achieving the business strategies.
2) Creating a Shared Need:
It is important to ensure that everyone involved in the business knows why the
change are being made. Change must be justified to the employees, indicating
why it is taking place and why it is important to the company.
3) Shaping a vision:
After explaining the reasoning for change, it is important to have vision of the
outcome of that change. Becker, Huselid and Ulrich say, ‘The vision of the
scorecard defines the outcomes of the HR Scorecard’. It is important to consider
what will be measured, how the information will be collected and what it will look
like when it has been completed.
4) Mobilising commitment:
 Sponsors of the change need to consider everyone involved in the process before
moving on the checklist item.
It is pertinent that the sponsor gets commitment (responsibility) from everyone
involved in the change to the company (especially line managers and hr manager).
5) Building Enabling Systems:
By this point sponsors should make sure they understand how to sustain the
change through modifying human resource systems such as staffing, training,
rewards, structure, appraisal and communication etc.
Equally important is the recognition of the technology required to implement the
change. In implementing the scorecard, continuous collecting and tracking of data
also necessary for maintaining of accurate data.
6) Monitoring and Demonstrating Process:
Sponsors must ensure that they have the means of measuring the success or failure
of the change. They also must plan for benchmarking for both the results of the
change and the implementation process.
7) Making it Last:
The final step is to ensure there is a plan for sustaining the change. Sponsors must
have a short- and long term plan to stay focused on the change. Sponsors need to
stay focused and help other members of the scorecard team stay focused.

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