The purpose of this paper is to suggest that analytics are most useful where they support and enable strategic decisions about people management and the business.
The paper explores how organizations can best make the link between strategy and the analytics they choose.
The best way to link analytics and strategy is through a human capital scorecard. This scorecard should be based on a strategy map like the original balanced business scorecard, which links inputs, human resource (HR) activities and human capital outputs together and also shows how these are linked to HR's impacts in the business.
Organizations are advised to think strategically about the sorts of analytics they can develop in order to drive decision making about people and the potential impact of people on business performance. In many cases, they will find that developing a strategy map that identifies objectives for the people management strategy, followed by a scorecard identifying measures for these strategies, and then analytics to add value to the chosen measures, will be the best approach to HR measurement and analysis.
Other authors have suggested forms of HR scorecard but these have not been based on a strategy map. This limits their usefulness and, in particular, does not enable analytics to be developed that link to strategic needs within a business.
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