Ulrich (2001; explains that the Balance Score Card enables institutions to do two important things;
– Manage HR as a strategic Asset and
– demonstrate HR’s contribution to any financial success.
A well thought out score card has four major themes;
i) The High performance work system. This means designing and implementing a validated competency model which is linked to every element of the HR system which is linked to the every employees performance appraisal.
ii) The extent to which that system is aligned to the firms strategy. Selection into these positions must correspond to the existing competency model and should be quality hire.
iii) The key HR deliverables that will leverage the HR role. High talent and stable staffing – these must have unique competencies combined with cutting edge technical knowledge whereas the organization must obtain an optimal staffing levels. One contributes to revenue growth whereas the other influences productivity growth.
iv) The efficiency of how those deliverables will be generated and measured. How easy is it to identify cost per hire as a strategic measure? The scoreboard and the system should highlight the links between cost and benefits.
The use of these themes help reflect on the cost control and value creation. Cost control is measured through how efficient the HR system is and Value Creation through the delvierables.