Uses of HR Scorecards in HRM

Uses of HR Scorecards in HRM


Every company’s success depends on the input of each and every employee. For the employees to be productive, there is the need to have a department that specifically focuses on the needs and development of the employees. This department is known as Human Resource (HR). Human resource department has been known to be a key player in strategic decision making that leads to the success of a company (Ulrich, 1997). Human Resources (HR) use HR scorecard as one of the way to play and achieve their roles and goals. Becker et,al (2001) defines HR scorecard as measurement system that help the HR department be of value to a company. In this discussion, we are going to explore on how HR departments can utilize HR Scorecard in achieving their success.

1. Benefits of using Human Resource (HR) Scorecard for organization performance

Some organizations have too many indicators to measure and may end up losing a balance between leading and lagging indicators. Therefore, a good combination of outcome and performance drive becomes inevitable. The most critical indicators are those that reflect on strategy and hence the need for an organization to avoid losing focus by considering a lot to measure (Kaplan & Norton, 2001). HR scorecard ensures the organizations identifies and focusses on the most critical indicators.

Keeping a HR scorecard is a top priority. The HR departments should share their strategies with other organization member to ensure they share the same overall goal. This will be achieved by ensuring the HR department embraces and formulates a HR scorecard.

2. Competitive advantage of using HR Scorecard

According to Porter (1985), competitive advantage is the company’s ability to perform efficiently on the goals to attain a lower cost than its competitors and execute the goals in a unique way to generate value to buyers. As per research done by Kaplan and Norton (1996), balance scorecard assists in translating an organizations’ mission and strategy into a well-defined performance measures that leads to a strategic measurement and management systems using both financial and non-financial performance measures.

3. Challenges encountered in implementing HR Scorecard

HR scorecard target on establishing a link between HR and the company’s goals by strengthening the employer-employee relationship. In the process of achieving this goal, the scorecard faces some challenges.

Measuring intangibles such as employees’ related concerns is challenging. Moreover, getting accurate data through interviewing employees is difficult as the employees may provide distorted information to please the HR staff or their supervisor. This leads to a clear disadvantage of a scorecard where it cannot be 100% accurate.

One of the role of HR is to interpret HR scorecards results. If the data contained in the HR scorecard is produced by an external consultant, it can lead into a complex or inaccurate interpretations. However, HR scorecard is more effective and useful when done internally by HR staff who are in a position to understand the company’s goal from an inside point of view.

Another challenge encountered by HR scorecard is that its effectiveness can be limited by the HR staff of the company’s management. This is due to the fact that HR scorecard doesn’t only contain data related to HR department but should also be in line with the company’s goal. Therefore, this can lead to a contradicting position of the HR scorecard goal with that of the management at large.

4. Strategies for minimizing challenges encountered

Operating with HR scorecard encounters some challenges which might not be avoided at all but can be minimized. With conducting an effective training on all the organization employees, the employees can be informed on the importance of giving accurate information on interviews done when collecting information to use the HR score card.

Training on the HR staff on how to work and formulate a HR scorecard together with its importance will minimize the need to outsource from external HR consultants.

There is also the need to involve the top leadership of the entire organization to ensure and strategy formulated in the HR score card is in line with the organization vision and goal. This will avoid conflict between the HR department and the top leadership while implementing the HR scorecard.


Ulrich, D. (1997). Measuring human resources: an overview of practice and prescription for results. Human Resource Management, 26(4), 303-320.

Becker, B. E., Huselid, M. A. & Ulrich, D. (2001). The HR scorecard: linking people, strategy and performance. Boston: Harvard Business School Press.

Ulrich, D. (1997). Measuring human resources: an overview of practice and prescription for results. Human Resource Management, 26(4), 303-320.

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