Why evaluate HR performance in the company?
Evaluation of business is quite a lengthy and complex process. It is imperative to take into account all aspects and key success factors influencing performance of the company. At the same time many people are making mistake of evaluation of financial/material indicators only. But the reality is that intangible assets matter so much in today’s business. Intellectual potential of the company cannot be measured in dollars but that does not make it less valuable. Very often top managers are too concentrated on financial indicators. They forget that their business is run by people. Those companies who failed due attention to human resource management appeared to be very vulnerable to the recent financial meltdown. They simply had no competent and creative employees who would offer breakthrough solutions to existing problems. Even huge investments will not work of the company has people who know how to efficiently use this money.
What is HR about?
That’s why in measuring business evaluation of HR performance is a must. Even if the company allocates sufficient funds to human resource management it does not mean that HR campaigns and actions are effective. The problem is that human resource department can not earn money. Just to the contrary it spends money the company earns. If the money spent in an inefficient way such money is wasted. Evaluation of human resource department will make it possible to find strong and weak points in HR policy of the company. Besides, it often happens that human resource management conflicts with the company strategy. For example, the company needs experienced personnel while human resource department hires college graduates, and the company needs to spend huge money to educate them and make them stay in the company.
HR evaluation process
Balanced Scorecard System will surely be helpful for those who want to evaluate HR performance in the company and align HR goals with company strategy. This is a very efficient way to find rooms of the problems by establishing cause and effect ties. For example, employee lateness may be the cause of poor job performance, or the company may simply spend too much to provide personnel with transportation means. There may be negative organization climate or employees may be not satisfied with the working conditions or a compensation system. All this will negatively influence employee performance which results in failure to achieve strategic goals and follow company mission and values. BSC will visualize HR strategy and helped everybody in the company understand what needs to be done to improve HR performance in order to achieve strategic goals.
