How can you use HR Scorecard framework to conduct a comprehensive HR audit?

1 Define your HR strategy

The first step is to define your HR strategy, which is the set of choices and actions that guide how you manage your human capital to support your organizational strategy. Your HR strategy should answer questions such as: What are the key HR challenges and opportunities in your industry and market? What are the core competencies and capabilities that your workforce needs to deliver your value proposition? How do you attract, develop, engage, and retain your talent? How do you align your HR policies, practices, and systems with your organizational culture and values?

2 Identify your HR objectives

The second step is to identify your HR objectives, which are the specific and measurable outcomes that you want to achieve with your HR activities. Your HR objectives should be aligned with your HR strategy and reflect the four perspectives of the HR Scorecard framework: financial, customer, internal process, and learning and growth. For example, some of the HR objectives you might have are: increase revenue per employee, improve employee satisfaction and retention, enhance performance management and feedback, and foster innovation and collaboration.

3 Select your HR measures

The third step is to select your HR measures, which are the indicators that you use to track and evaluate your progress towards your HR objectives. Your HR measures should be relevant, reliable, valid, and actionable. You should also balance between leading and lagging measures, which reflect the causes and effects of your HR performance respectively. For example, some of the HR measures you might use are: return on human capital investment, employee engagement survey results, quality of hire and turnover rates, and training hours and impact.

4 Collect and analyze your HR data

The fourth step is to collect and analyze your HR data, which are the information that you gather from various sources to populate your HR measures. You should use a combination of quantitative and qualitative data, such as financial reports, HR records, surveys, interviews, focus groups, and observations. You should also use appropriate methods and tools to analyze your HR data, such as descriptive statistics, benchmarking, gap analysis, and root cause analysis. The purpose of this step is to identify the strengths and weaknesses of your HR function and its alignment with your organizational strategy.

5 Communicate and report your HR results

The fifth step is to communicate and report your HR results, which are the findings and insights that you derive from your HR data analysis. You should use clear and concise language, visuals, and stories to convey your HR results to your stakeholders, such as senior management, employees, customers, and investors. You should also highlight the linkages and trade-offs between the four perspectives of the HR Scorecard framework and show how your HR activities contribute to your organizational performance and value creation.

6 Implement and monitor your HR actions

The sixth and final step is to implement and monitor your HR actions, which are the interventions and initiatives that you design and execute to address the gaps, risks, and opportunities that you identified in your HR audit. Your HR actions should be aligned with your HR strategy and objectives and supported by adequate resources, roles, and responsibilities. You should also establish a feedback loop and a review process to monitor the impact and effectiveness of your HR actions and make adjustments as needed.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?