STRATEGIC HUMAN RESOURCE MANAGEMENT

Becker, Huselid, and Ulrich explain the need for such a measurement system

this way:

In our view, the most potent action HR managers can take to ensure their

strategic contribution is to develop a measurement system that convincingly

showcases HR's impact on business performance. To design such a

measurement system, HR managers must adopt a dramatically different

perspective, one that focuses on how human resources can play a central role

in implementing the firm's strategy. With a properly developed strategic HR

architecture, managers throughout the firm can understand exactly how

people create value and how to measure the value creation process.

Information for Creating an HR Scorecard
To create an HR Scorecard, the manager needs three types information. First,
he or she must know what the company's strategy is, because the strategy
will determine what the important employee behaviors and strategically impor-
tant organizational outcomes are, and how the firm will measure
organizational performance. Second, the manager must understand the
causal links between the HR activities, the employee behaviors, the
organizational outcomes, and the organization's performance. Figure 2.1 9
summarizes the basic relationships involved. Third, the manager must have
metrics he or she can use to measure all the activities and results involved,
specifically the HR activities, the emergent employee behaviors, the
strategically relevant organizational outcomes, and the organizational
performance.
Figure 2.1 9 The basic HR Scorecard Relationship
HR
Activities

Emergent

Employee

Behaviors

Strategically Relevant

Organizational

Outcome

(^) Organizational
Performance
Achieve
Strategic
Goals
Source: Garry Dessler. (2007), Human Resource Management, Singapore.
Pearson education, pp.88