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In a marketplace fueled by intangible assets, anything less than optimal workforce success can threaten a firm's survival. Yet, in most organizations, employee performance is both poorly managed and underutilized. The Workforce Scorecard argues that current management and human resources practices hinder employees' ability to contribute to strategic goals. To maximize the power of their workforce, organizations must meet three challenges: view their workforce in terms of contribution rather than cost; replace benchmarking metrics with measures that differentiate levels of strategic impact; and make line managers and HR professionals jointly responsible for executing workforce initiatives. Building on the proven model outlined in their best-selling book The HR Scorecard, Mark Huselid, Brian Becker, and co-author Richard Beatty show how to create a Workforce Scorecard that identifies and measures the behaviors, competencies, mind-set, and culture required for workforce success and reveals how each dimension impacts the bottom line. Practical and timely, The Workforce Scorecard offers crucial lessons for leveraging human capital to achieve strategic success.
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Corporate success today is fueled more and more by the performance of intangible assets. The most important of these intangibles is usually a firm’s workforce. Many times, the workforce is a businesses's largest under performing asset and the area where the greatest gains in competitive performance can be generated.
To maximize the contribution of its workforce, a firm must meet three challenges:
The Perspective Challenge—To view the workforce in terms of potential contribution rather than as a cost to be minimized.
The Metrics Challenge—To replace conventional benchmarking metrics with measures that will differentiate improvement.
The Execution Challenge—To hold both line managers and HR staff jointly responsible for workforce quality and performance.
In practical terms, this means companies don’t just need one strategy but actually require three strategies and three corresponding scorecards to measure the success of each of those strategies:
"Of all the factors affecting firm performance that CEOs and senior managers can directly influence, workforce success—or the extent to which a firm can generate a work force with the culture, mind-set, competencies, and strategic behaviors needed to execute its strategy—is both the most important and most under performing asset in most businesses. In an economic environment marked by hyper competition, anything less than optimal workforce success is a direct threat to the very survival of the firm."
Successful companies differentiate themselves in the marketplace. In similar fashion, you need to differentiate your workforce strategy if you aspire to execute your firm’s preferred strategy. Your "A" performers must be handled differently from your "C" performers if you are to treat your workforce as a strategic asset. Your workforce assets need to be recognized and then exploited effectively just like any other asset available to your firm.
The key question here is: "Do all of our managers understand exactly how workforce capabilities and behaviors drive the execution of the firm’s strategy?"
To pass the perspective challenge, companies have to do two key things well:
Focusing on getting "A" players in "A" positions is vital. In practice, this usually involves three distinct levels across the entire spectrum of HR practices:
■ Level 1—the company takes on board the HR field’s generic best practices and policies. The firm develops a HR management system that gets involved in selecting, developing, rewarding and motivating the workforce. This lays a good foundation but little more.
■ Level 2—the company starts attempting to differentiate the mind-set and practices of its core workforce. In other words, the firm hires, trains and rewards those people who have the skill sets directly aligned with the company’s core commercial strategy. Every workforce action aligns with the enterprise business strategy.
■ Level 3
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