PERHAPS ONE OF THE MOST important functions of the HR Scorecard measurement system is that it provides a means to identify, in quantitative terms, the discrepancies between your firm’s current and ideal HR architecture. Such gaps may have arisen within the elements of the HR system itself, between the HR system and firm strategy, or between desired and actual employee behaviors.

For example, in one firm we visited, the company’s HR Scorecard and planning processes indicated that they would face a shortage of midlevel managerial talent as their business expanded and as a number of midlevel managers reached retirement eligibility. (Business slowdowns and a multiyear hiring freeze had shrunk the number ...

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