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HR Scorecard of Business Results

April 6, 2001
Related Topics: HR Services and Administration, Featured Article
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Since 1990, a biannual survey has measured HR management systems in publiccompanies in the United States. The survey results below show how the top 10% of firms compare with the bottom 10% of firms on several characteristics.

HRPracticesBottom10% (42 firms)Top10% (43 firms)
Qualifiedapplicants per position8.2436.55
Hiredbased on a validated selection test4.26%29.67%
Jobsfilled from within34.90%61.46%
Aformal HR plan including recruitment, development, and succession4.79%46.72%
Hours oftraining for new employees (less than 1 year)35.02116.87
Hoursof training for experienced employees13.4072.00
Employeesreceiving regular performance appraisals41.31%95.17%
Workforcewhose merit increase or incentive pay is tied to performance23.36%87.27%
Workforcewho receive performance feedback from multiple sources (360)3.90%51.67%
Targetpercentile for total compensation (market rate = 50%)43.03%58.67%
Workforceeligible for incentive pay27.83%83.56%
Differencein incentive pay between a low-performing and high-performing employee3.62%6.21%
Workforceworking in a self-managed, cross-functional, or project team10.64%42.28%
HRbudget spent on outsourced activities (e.g. recruiting, benefits, payroll)13.46%26.24%
Employeesper HR professional253.88139.51
Eligibleworkforce covered by a union contract30.00%8.98%
HROutcomesBottom10% (42 firms)Top10% (43 firms)
Note:Each of the variables in the "HR Outcomes" section is scaledfrom 1 to 6, where 1="not at all" and 6="to a very greatextent."
Strategyis clearly articulated and well understood throughout the firm3.404.21
Theaverage employee understands how his or her job contributes to the firm'ssuccess2.804.00
Seniormanagement sees employees as a source of value creation versus a cost tobe minimized3.314.21
Theexecutive leadership team is visionary3.024.33
Thefirm attempts to provide job security, even if confronted with decliningfinancial performance2.714.11
Thefirm's decision-making style can be described as participative3.023.81
Thefirm's HR professionals are generally perceived to be administrativeexperts3.764.56
Thefirm's HR professionals are generally perceived to be employee champions3.694.40
Thefirm's HR professionals are generally perceived to be agents for change3.314.12
Thefirm's HR professionals are generally perceived to be business partners3.194.30
Linemanagers generally believe that effective diversity management is abusiness imperative2.453.65
Topmanagement shows commitment to and leadership in knowledge sharing2.994.05
Thefirm has developed and communicated measures of financial performance3.384.63
Thefirm has developed and communicated measures of customer reactions3.024.27
Thefirm has developed and communicated measures of key business processes3.094.13
Thefirm has developed and communicated measures of learning and growth2.263.12
FirmPerformanceBottom10% (42 firms)Top10% (43 firms)
Employee turnover34.0920.87
Salesper employee$158,101$617,576
Market value to bookvalue3.6411.06

Reprinted by permission of HarvardBusiness School Press. Excerpt from TheHR Scorecard: Linking People, Strategy, and Performance, by Brian Becker,Mark Huselid, and David Ulrich. Copyright 2000 © President and fellows ofHarvard College; All Rights Reserved.

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