Drawing insights from a recent survey on the perception of HR, this article highlights the importance of measurement in HR. It traces the initial attempts at measuring intangibles to the current adoption of different scorecards like balanced scorecard, HR scorecard and workforce scorecard. These scorecards have been discussed with the objective of highlighting the increasing trend towards adopting measurement techniques to quantify the HR function to some extent with the objective of making an impact on organizational outcomes.

Most executives do not think much of HR. This was the finding of a survey that was conducted in 2006 and published on the website HR.com. Such an opinion would not augur well for the majority of the HR professionals, especially for those who have spent their professional career in the HR. Such an opinion will persist till the HR professionals start creating value for their companies. The survey result also had some encouraging findings. Some of them are discussed in the following paragraphs. Since the survey does not highlight the research methodology used and description of the sample respondents, the emphasis in this article is not on the numbers but rather on the trends that it portrays.

To begin with, the survey asked the respondents to rate nine different functions as to how strategically valuable each of these functions was to their company's success. On this parameter, HR was rated amongst the last three (that is, it was rated seventh) followed by legal and administrative functions. The functions ranked above HR were: (1) customer/client service, (2) sales/business development, (3) operations, (4) marketing, (5) IT/technology and (6) finance. This supports the statement made above that most executives don't think much of HR. On the other hand, the survey also suggested that companies that focused on retention and learning and development of employees, tended to rate HR high on importance. In other words, as human capital investments became a higher priority, the perceived value of HR increased. But the survey failed to establish the causal link between the two, as to which causes what. Is it because the perceived value of HR is high that the investments in human capital are high or is it vice-versa. Whatever be the causality, what is important is that the two seem to be related in the mind of the executive.

Measurement in HR, HR professionals, Research methodology, IT, Information technology, Return on Investment, ROI, Human Resource Accounting, Intellectual Capital Statement, ICS, Financial measurement system, HR measurement systems, Business developments.