progress. Since its publication in the mid-1990s. Many companies have
adapted this approach. In their work with HR departments they have found
that the balanced scorecard approach is well suited to HR departments that
are keen to take the first step in showing the value they add to a business.
The balanced approach to HR measurement answers how HR is adding value
from four different perspectives:
what is our return on our investment in people?
is our service delivery effective and efficient?
are our human assets aligned with future needs? and
are we serving the needs of our customers?
Among those companies in our study that are already using HR
measurement, their primary purposes in doing so are to:
build a common language among HR professionals for communicating
HR strategy and results;
be proactive in identifying workforce trends and offering solutions; and
strengthen relationships with the lines of business.
The combination of a robust HR measurement system and HRMS framework
allows today's HR leaders to make decisions that are grounded in fact and to
evaluate the outcome of business investment. It also offers a means to
translate ideas about business strategy into behaviours and actions that
support the company's future direction by creating culture and implementing
talent management practices.
Research conducted by Fulmer, Gehart and Scottargues that companies
which adopt HR measures of value realise substantial financial performance
advantages over companies with less employee-focused employment
strategies. They go on to suggest that companies considering adoption of the
types of HRM strategies and measurement processes used by the firms they
studied may not have much downside risk, and if their competitors are using
these practices, they may even find themselves at a disadvantage.