A Checklist for Success

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Workforce Scorecard

1.Workforce mind-set & culture
2.Workforce competencies
3.Leadership & workforce behavior
4.Workforce success

Organizations that have successfully adopted the workforce scorecard have passed the three challenges of development:

Challenge #1—The perspective challenges

The CEO expects the firm’s senior executives, line managers and HR leaders to be able to articulate and explain the influence of workforce success on the firm’s ability to successfully execute its strategy.

The CEO designates specific measures of workforce success and then holds senior managers accountable for these performance measures.

The CEO and the senior executives will understand the importantance of a differentiated workforce strategy and will be able to explain how it is implemented and how the results will be measured.

The firm’s senior managers and line managers will form a partnership with HR leaders. Both will work together to attract, hire, develop and then retain top talent that is consistent with the firm’s strategy.

Senior executives, line managers and HR leaders will have shared accountability for workforce success and strategic performance drivers.

HR leaders will focus more on leading indicators of future success and less on lagging indicators of past business performance.

Challenge #2—The metrics challenges

Senior managers will focus on just a small number of key workforce metrics, and everyone in the entire organization will understand why they are important to track.

These metrics will be measured and then managed in real time rather than on a delayed basis.

The firm’s workforce measures will be personalized and based on its own unique requirements rather than external benchmarks like best practices.

The firm’s metrics will be constantly evolving—so that the workforce measures managers are focusing on today will be very much different from those were in common use five years ago.

The value of each workforce metric will be determined by the actual relationship between workforce success and business outcomes rather than the expected relationship.

The organization’s metrics will reflect whether or not differential investments are made on the firm’s “A” players in “A” positions or not.

Challenge #3—The execution challenges

HR will spend less time dealing with employee performance problems and devote more time and energy to distinguishing between potential “A” and “C” players at the point of hire.

HR will start measuring its success using the same metrics as the company as a whole rather than on the strength of HR initiatives.

HR will work continuously to create a shared mind-set around execution of the strategy rather than taking this for granted.

HR will put in place a staffing structure which will enable it to balance being a strategic partner and delivering HR services efficiently.

The firm’s strategic workforce measures will be owned and coordinated by a group of people rather than being assigned in an ad-hoc fashion.

Senior executives, line managers and HR leaders will consider the results of the measurement system are well worth the effort of implementation.

As previously noted, workforce success is both the most important and most underutilized asset in many businesses. As a consequence, most firms have the potential to considerably improve the effectiveness of their strategy execution and subsequently firm performance, and the management lever offering the greatest return is improved workforce success. This is the good news. The bad news is there is very little low-hanging fruit. If it were easy to diagnose and implement these changes, they would already have happened in most organizations.

–Mark Huselid, Brian Becker & Richard Beatty

The workforce scorecard is a crucial lever in the strategy execution process. Workforce success is often the key performance driver, directly or indirectly, for all other elements of strategic success. Unfortunately, senior executives usually have very limited tools for measuring workforce success or holding line managers accountable for workforce performance. In fact, many of the same firms that have highly detailed information about their inventories and physical plant have almost no information about their own workforces—presumably one of the key drivers of their strategic success. The workforce scorecard is designed to solve that problem.

–Mark Huselid, Brian Becker & Richard Beatty

We believe that many firms approach workforce management from the wrong perspective, and their financial performance suffers as a result. Instead of focusing on how to execute strategy through the performance of the workforce, in many firms the first priority is cost control, and the focus often begins with the HR function. In many firms, HR operating expenses. The dollars involved in a firm’s total workforce expenditures are considerably greater, typically accounting for 60 to 70 percent of a firm’s operating costs. The strategic benefits of improved workforce performance represents a significant opportunity for improvement in most firms. Simply think of what it would mean to your firm’s overall performance if you could improve the extent to which the workforce had the skills, motivation and focus necessary to execute your strategy by 25 percent or more. The workforce scorecard is intended to provide a road map for that journey.

–Mark Huselid, Brian Becker & Richard Beatty