For years the use of a human capital scorecard has created buzz in the HR community. It’s part of the focus on metrics, analytics, and building a data-driven function. However, many organizations struggle with making it “stick” – getting managers to actively use the scorecard to make operational and strategic workforce decisions or take a deeper dive into issues affecting their workforce (and, in turn, their ability to conduct business). Using a scorecard, or even data and reports, is not an “if you build it they will come” phenomenon. Organizations must understand that a good deal of change management and communication are critical in order for it to be successful.
While we have a four key ideas to consider as you’re building a scorecard, these are just the tip of the iceberg. This is a thoughtful process that takes planning, communication, execution, communication, and follow-up. Oh, and communication. Remember that just because you are excited by the data, doesn’t mean everyone in the organization will instantly change their behavior to become more metrics-focused.
1. It’s about the business. Any scorecard, report, etc must start with business issues. All too often I see scorecards built that focus on issues critical to HR management or centered around metrics that are easy for HR to obtain, and they miss the point entirely. What is the organization’s strategy? What is management’s top concern? What will enable them to achieve their goals? What keeps the up at night? Then translate what that means in terms of people in the organization.
As you move from senior management to line managers, think about the operational decisions they face on a daily, weekly, monthly, quarterly, and yearly basis and how you can enhance those decisions with better data. How can you find this out? Ask. Get their input before you create the scorecard and at intervals during the process to ensure it is meeting their needs. What if the report has already been created? It is never too late to solicit feedback and make improvements.
2. Make the data relevant. You must show managers numbers they can affect. If you only show corporate, business-unit, or even division numbers to someone who even sits one level below, that person has difficulty seeing how his/her actions will lead to an improvement in the result. J.P. Morgan has taken this idea one step further by creating broad categories of metrics, then allowing each office to choose the exact data points it will review. Each month, the office gathers to go over the results, discuss why the number went up or down, and talk about ways to continue improvement. A major grocery store chain has combined its HR metrics with other operational metrics so that managers have one central location for all of the data they need.
Along these same lines, part of making the data relevant is setting targets so that data consumers understand whether you want the result to go up or down and by how much. Many companies find that once targets are set, a simple red, yellow, or green system helps to highlight those areas that need more attention and greater focus.
3. Create accountability. It’s a fact of life that people change their behavior because they want to, and one of the fastest ways to create that desire to is create accountability for the results. Again, you can achieve this through a number of methods.
- Many organizations have begun to tie human capital metrics to performance reviews, creating the financial incentive to show improvement (if you do this, you must create a system of checks and balances to prevent intended or unintended manipulation).
- One utilities company distributes the scorecard, then gives each HRBP two weeks to analyze why their results were better or worse than corporate and what the contributing factors may be.
- One organization sends an email to line managers letting them know the HRBP’s have received the scorecard and will be scheduling meetings to discuss high-priority topics.
4. Develop a “data process.” We often say that reports should not answer every question, but rather tell you what questions to ask. So, that leaves us with a big “what next”? You need to know how scorecards/reports will be distributed, who will use the data, what decisions they will make with it, and where they will turn to get answers. Providing some level of support to your HRBP’s will enhance your ability to use scorecards effectively. This can be through developing a Center of Excellence to help guide and conduct analysis or by bringing the HRBP’s together for a group session to share ideas.
Tags: change management, data-driven hr, HR measurement, hr scorecard, HR Strategy, people scorecard, scorecard, strategic hr, strategic HR measurement, workforce scorecard