Content area
Full Text
Verizon HR has effectively designed and implemented a strategic management system, which is based upon the balanced scorecard model of Dr. David Norton and Dr. Robert Kaplan of Harvard Business School. The HR Balanced Scorecard was conceived with New Economy organizational dynamics in mind. The scorecard uses a broad range of "leading and lagging" indicators-overall strategy, operational processes, customer perceptions, and financials to evaluate the effectiveness of HR initiatives to the bottom line. The HR Balanced Scorecard provides the means to monitor workforce indicators, analyze workforce statistics, diagnose workforce issues, calculate the negative financial impact, prescribe solutions, and track improvements. (c) 2001 John Wiley & Sons, Inc.
Introduction
Most business leaders will agree that the employees in their companies-their "human capital"-are one of the key drivers of their competitive advantage. Some leaders even go so far as to state this publicly in their annual reports. It is widely believed that in the next ten years the primary source of competitive advantage for most businesses will continue to increasingly focus on the talent within the organization, which means that the ability to effectively manage the employee talent within the organization is becoming more critical every day. While management makes decisions continuously about how to invest in human capital, few companies have an effective process to measure the value created by this "most valuable" asset.
What if HR could effectively manage the value created by thorough investments in employees? Managers know now how much is paid to reward, hire, train, develop, and provide benefits to employees. What managers need to know, however, is where the investments are most effective and valuable. Should the business expand the incentive pay program? Should they outsource safety administration? What is the most effective use of training dollars? How much should be spent on recruitment? Should employee services be in-sourced, out-sourced, or cosourced? Should executive bench strength be built or bought? What is the cost in human capital terms to break into a new market? Is the acquisition target a good fit and does it add or dilute our competitive advantage in terms of talent? Do the current investments in employees match the strategic objectives of the business? Is the HR organization a partner with the business to manage our employees...