HR Solutions: Balanced Scorecards, Unclaimed Wages, Data

​​Q: How can balanced scorecards be applied to human resources?

A: By linking clearly defined department objectives and performance to strategic business goals, the HR balanced scorecard can allow human resource staff to focus on activities in support of company goals. It demonstrates the strategic value of HR by defining and measuring HR’s contribution in concrete, clearly understood terms. The Balanced Scorecard (Kaplan & Norton, 1996) provides a system that leverages the traditional human resource measures with metrics of performance from four additional perspectives—financial, customers, internal business processes, and learning and growth.

Using the area of recruiting as an example, a balanced scorecard would look something like this:

Objective: Reduce turnover costs.
Description: Develop effective recruiting methods and new-hire orientation methods to optimize the retention of new hires.
Actions:

• Identify attributes of successful employees who stay at the company for two or more years.
• Use technology more effectively for recruiting and screening applications.
• Identify selection methods that will contribute to successful hires.
• Integrate branding efforts into recruiting.
• Revise orientation program to ensure new-hire retention.

Measures:

• Cost-per-hire (financial).
• Turnover rates and costs (financial).
• Time-to-fill (business process).
• Customer satisfaction with new-hire performance (customers).
• New-hire satisfaction with orientation (learning and growth).
• Supervisor satisfaction with orientation (learning and growth).

In addition to alignment with company goals, the HR scorecard must contain the following elements to be effective: accountability; validity; and actionable, measurable results. The measurement system must contain understandable metrics aligned to the objective and backed by solid data.

The balanced scorecard should focus on results. For example, simply measuring turnover or time-to-fill is ineffective if no action is taken as a result of those measures. More meaningful measures clearly align with the company’s strategic plan and further productivity and retention.

With careful planning and execution, the HR scorecard can be a useful method of aligning HR with the company’s strategic plan.

—Margaret Fiester

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Q: What should we do when employees don’t cash their paychecks?

A: All 50 states have provisions regarding how to treat “unclaimed property.” All of the provisions are similar in one regard—how to determine if the property, in this case a paycheck, is abandoned and when to report this information to the state.

Consider four elements:

• Does the property have value?
• Can the owner of the paycheck be located?
• Has the paycheck been unclaimed for the period of time set by state law that is known as the “abandonment period”?
  An employer will want to check state law regarding the length of time a paycheck needs to be “abandoned.”
• Is there a legal obligation of the “holder,” or employer, to the “owner,” or employee?

In dealing with unclaimed wages, first try to make contact with the employee or former employee by phone to discuss the uncashed paycheck or paychecks. Document attempts your company makes to have the person collect wages. An employer will need to show that the employee or former employee could not be located.

When phone attempts do not work, written notice should go to the employee’s last known address or addresses; use certified mail or keep some record of the attempt.

Once the abandonment period passes, file and report the unclaimed property with state authorities.

Most states have improved enforce- ment of unclaimed property laws by increasing the number of auditors in unclaimed property offices, the number of audits done and the number of educational programs dealing with this topic.

—Yvette Lee

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Q: My predecessor left mountains of exit interviews, workers’ compensation claims, grievances, accident reports and profit-and-loss statements. What can I learn from this data?

A: Data collection is first step in a process of unearthing trends in your organization. Making sense of the data is next. Look at data individually and collectively. Search for patterns and relationships before jumping to conclusions about whether the metrics constitute a trend.

Are the data similar throughout the organization, or does one department stand out? For example, if the accident rates are higher in a department that also experiences higher turnover, workers’ compensation claims and negative customer-satisfaction ratings, as well as more grievances, is it possible that the data could be supporting the replacement of old equipment?

Check profit-and-loss statements to see if maintenance or replacement is scheduled. Review the department’s budget vs. actual performance. Check to see if managers receive incentives for operating under budget.

When reviewing exit interviews, note whether they detail the need for training, more rest breaks, or more personnel or supervisory control issues. The data could superficially support all of these conclusions. Are the data clearly indicating potential or actual safety hazards? How old are the data? Look for patterns about what employees are saying in their accident reports, workers’ compensation claims, grievances or exit interviews. Are they complaining about malfunctioning equipment, unrealistic performance and productivity standards, working through meals and rest breaks, and mandatory overtime? Do they outline frustration with a particular manager? Do they detail a pattern of unresponsiveness? Were background checks performed on new and existing employees? Was training provided? Were these steps bypassed so the company could quickly fill positions in an effort to increase productivity and revenue?

Ask whether the data are providing information about trends in the organization that could expose safety, compliance or other risks and that might affect productivity, revenue, employee retention—and the health of the organization.

—Deb Levine

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Margaret Fiester, SPHR, Yvette Lee, PHR, and Deb Levine, SPHR, are HR knowledge advisors in SHRM’s HR Knowledge Center.

Web Extras

SHRM web page: HR Knowledge Center

SHRM research: The HR and Leadership Scorecards (Briefly Stated)

SHRM toolkit: Payroll

SHRM white paper: Benchmarking in Human Resources