- Describe the Balanced Scorecard method and how it can be applied to HR.
- Discuss what is meant by “human capital.”
- Understand why metrics are important to improving company performance.
- Consider how your human capital might be mapped on an HR Balanced Scorecard.
You may already be familiar with the Balanced Scorecard, a tool that helps managers measure what matters to a company. Developed by Robert Kaplan and David Norton, the Balanced Scorecard helps managers define the performance categories that relate to the company’s strategy. The managers then translate those categories into metrics and track performance on those metrics. Besides traditional financial measures and quality measures, companies use employee performance measures to track their people’s knowledge, skills, and contribution to the company (Kaplan & Norton, 1996).
The employee performance aspects of Balanced Scorecards analyze employee capabilities, satisfaction, retention, and productivity. Companies also track whether employees are motivated (for example, the number of suggestions made and implemented by employees) and whether employee performance goals are aligned with company goals.