The HR Scorecard

Refernec By Meghna Haridas

Summary

The essay introduces the framework of the HR scorecard, which is modelled after
the Balanced Scorecard developed by Kaplan and Norton. The first few sections
describe the problems with traditional approaches to viewing HR’s role in business
performance. It explains why HR should be looked at as a strategic asset. The HR
architecture is then described in brief. It highlights the links between the HR
scorecard and the Balanced Scorecard. The nature of HR deliverables including
performance drivers and enablers is explained. The seven-step model explains the
details of implementing an HR Scorecard. The basic benefits of the HR Scorecard
are highlighted. Finally, to highlight the implementation details, a case study of the
Verizon HR scorecard is presented.

Introduction

The new economic paradigm is characterised by speed, innovation, quality and

customer satisfaction. The essence of the competitive advantage has shifted from
tangible assets to intangible ones. The focus is now on human capital and its
effective alignment with the overall strategy of organisations. This is a new age for
Human Resources. The entire system of measuring HR’s contribution to the
organisation’s success as well as the architecture of the HR system needs to change
to reflect the demands of succeeding in the new economy. The HR scorecard is a
measurement as well as an evaluation system for redefining the role of HR as a
strategic partner. It is based on the Balanced Scorecard framework developed by
Kaplan and Norton and is set to revolutionise the way business perceives HR.

Based on various studies, it can be concluded that firms with more effective HR
management systems consistently outperform the competition. However, evidence
that HR can contribute to a firm’s success doesn’t mean it is now effectively
contributing to success in business. It is a challenge for managers to make HR a
strategic asset. The HR scorecard is a lever that enables them to do so.
Implementing effective measurement systems for intangible assets is a very
difficult task and demands the existence of a unified framework to guide the HR
managers. It is this difficulty that has been the prime reason why managers tend to
avoid dealing with intangible assets as far as possible. In the process firms under-
invest in their people and at times invest in the wrong ways. Another difficulty is,
managers cannot foresee the consequences of their investments in intangible
human assets in a well-defined measurable manner and they are not willing to take
the risk. Thus, the most effective way to change this mindset is obvious – to build a
framework just like the Balanced scorecard, which has sound measurement
strategies and is
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able to link HR functions, activity and investment with the overall business strategy.
The HR scorecard framework was specifically designed for these purposes.

Human Resources as a strategic partner – The present and the future

The general scenario in most companies is as follows. HR management teams have

well-developed visions of their departments, their roles and responsibilities. But, the
senior management is generally sceptical of HR’s role in the firm’s success. They
generally consider HR to just be another necessary appendage but not something
that can contribute to the success of the company. Even if the senior management
does believe that human capital is their most prized possession and asset, they
cannot understand how the HR team can make this belief come alive.

There is one reason for all of this. Human capital is an intangible asset and HR’s
influence on firm performance is difficult to measure. The standard elements of a
firm’s resource architecture that are measured include total compensation,
employee turnover, cost per hire, percentage of employees that undergo
performance appraisals and percentage employee satisfaction. The question to be
asked is: Are these the measures crucial to implementing the firm’s strategy? This
is clearly not the case. Interesting attributes would include a committed workforce,
competency development programs, etc. But, it is very difficult to imagine
measures for these quantities. Hence, in the current state of HR there is a clear rift
between what is measured and what needs to be measured.

As mentioned in the introduction, the role of HR is no more just administrative. It

has a much broader, connected and strategic role to play. But, these statements
must be substantiated. The reasons why HR must be considered as a strategic asset
must be highlighted. A strategic asset is something difficult to trade or imitate. They
are normally a set of scarce, special or even exotic resources and capabilities that
bestow a firm its competitive advantage. An unlikely paradox is that the very
intangibility of human capital that makes it so difficult to measure and evaluate,
also proves to be the one quality that makes it a strategic asset. Consider the
difference between being able to align employee efforts with the company’s
strategic goals and instead having innovative policies of performance appraisals.
The latter is a policy. It is visible to competitors and can be easily copied. The
former on the other hand is a strategic move. It is not easy to imitate since it is a
very circumstantial effort, which depends on the specific firm, its goals and its
people. This proves to be a strategic asset i.e. something that competitors cannot
see but that can be utilised to gain a competitive advantage. It is thus important to
align the HR strategy to the overall business strategy signifying a top-down
approach as opposed to a bottom-up approach where each division such as
marketing, HR etc. performs its standard individual roles without a clear outlook
towards the firm’s strategy.
Many firms have realised this and have made efforts to measure HR’s influence on
the firm’s performance. However, most of these approaches seem to focus on the
individual, as it is believed that if one can achieve an improvement in individual
employee performance, it would automatically enhance the performance of the
organisation. The point that is missed is the fact that organisational units, be it
individuals or teams, do not function in isolation. The stress is on streamlining and
cooperatively working towards a common goal. The individualistic approach once
again does not show directly, in measurable values, the competitive advantage that
can be gained. Financial policies and numbers and plans on the other hand do. HR is
neglected in the process.

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The HR architecture as a strategic asset

The focus of corporate strategy is to create sustained competitive advantage

whereas that of HR strategy is to maximise the contribution of HR towards the same
goal. Thinking about HR’s influence on the overall strategy of the company requires
one to look at all aspects of the HR architecture. The HR architecture describes the
relationship of the HR function, the HR system and the employee behaviour.

The HR function: The foundation of a value-creating HR strategy is a management

infrastructure that understands and can implement the firm’s strategy. The
professionals in the HR function would be expected to lead this effort. This clearly
implies that HR managers and professionals need to get a deeper understanding of
the HR function. There are two basic functional categories in HR management. The
first is technical. It includes delivery of HR basics such as recruiting, compensation
and benefits. The second is strategic. It involves delivering the above mentioned
services in a way that directly supports the implementation of the firm’s strategy.
Most HR managers are proficient enough in the technical aspect but rarely do they
even know about the strategic aspect. Thus, the competencies that the HR
managers need to develop and the ones that have the largest impact on
organisational performance are the business and strategic competencies.

The HR system: In an effective high performance HR system, each element is

designed to maximise the overall quality of human capital throughout the
organisation. To build and maintain a set of talented human capital, the HR system
should

• Link its selection and promotion decisions to validated competency models

• Develop strategies that provide timely and effective support for the skills
demanded by the firm’s overall strategy implementation.

• Enact compensation and performance management policies that attract, retain

and motivate high-performance employees.
Basically, the firm needs to structure all the elements of its HR system in a way that
supports a high-performance workforce. However, systemic thinking implies stress
on the interrelationships of the HR system components and the link between HR
and the larger strategy of the firm. The laws of system thinking imply the following:

• Problems of today are most likely due to past decisions. It is thus important to
look at the causal nature of past solutions and current problems.

• One should think twice before taking the easy way out or deciding to go with
standard solutions to any problem as this will most likely lead to a crop of new
problems in the future.

• Cause and effect are not closely related in time. There is a lag between cause and
effect and HR’s influence on firm performance is normally much less direct than
that of other performance drivers. This can make it hard to measure as well as be
misleading. It is thus important to look at the leading indicators and not just the
lagging indicators. Typical financial performance measures are lagging indicators
and in an attempt to solve financial problems, the first step is normally to cut costs.
It is more important to actually pinpoint the cause of the problem and look to long-
term benefits than short term ones.

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• The best strategies are often unobvious. Small changes in how HR drivers are
managed can slowly gather momentum and work their way through the strategy
implementation process.

• It is important never to dissect the system and view each of its parts
independently. One must look at the system as a whole and the connections
between the individual parts is normally the vital place to look at for a solution to
any of the problems.

Firms with high performance work systems tend to devote considerably more
resources to recruiting and selection. There is a strong emphasis on training and
performance management and compensation is tied to performance. Teamwork is
encouraged, there is generally less unionisation and they have a large and effective
HR team. It is important to note, that all these factors in tandem, not in isolation,
lead to better performance, once again showing the systemic nature of HR’s role in
performance enhancement. The effects of these measures are lower employee
turnover, more retention, greater sales per employee and a greater market value
for the firm.

It is also important for the HR system to constantly check for alignment of all its
parts i.e. how much they reinforce or conflict with each other. An example of
misalignment is a policy that encourages teamwork but rewards individual
contributions.
In the service sector, the employee-customer relationship is very obvious and
visible and so the impact of value creation is unmistakable. But, in many firms, the
value is derived from the operational processes and quality of work that the
employees generate. This is less obvious to competitors and it cannot be imitated. It
is especially in these kinds of firms that the alignment of HR strategy and policy
with the overall strategy of the firm matters the most.

The alignment process begins with a clear understanding of what kind of value the
organisation is supposed to generate and how it should be generated. In the
Balanced Scorecard, this is referred to as the ‘strategy map’ that stresses the
relationship between the ultimate goals and the key success factors at the four
important levels of customers, internal operations, people and systems. Once the
firm has a clear understanding of the value-creation process, it can then design an
implementation model that specifies needed skills and competencies and employee
behaviours throughout the firm. The HR management section can then be directed
towards generating these necessary competencies and behaviours. The stress is not
just on the creation of sound HR policies and strategies. How these are
implemented is also very important. There has to be a strong alignment with the
firm’s competitive strategy.

A high performance HR system will also tend be unique. This is because it depends
on the particular organisation, its goals, people and strategy. Hence, it proves to be
a strategic asset.

Employee Behaviours: As mentioned above the final results of the strategies are
mapped to required employee behaviours. It is important that each employee be
trained not just to do his or her job but also to have a substantially clear
understanding of where he or she stands in the big picture of the overall strategy of
the firm. Strategic behaviours are productive behaviours that directly serve to
implement the firm’s strategy. There are two basic categories. Core behaviours are
behaviours that are considered fundamental to the success of the firm, across all
business units and levels. Situation-specific behaviours on the other hand, are more
circumstantial behaviours. These are not required all the time but are absolutely
necessary in certain scenarios.

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Understanding how people and processes within a firm actually create value is the
first step to identify the key behaviours. The second step is to develop methods to
instil these behaviours and also have measurement techniques that evaluate these
methods and key behaviours.

The Balanced Scorecard and Balanced Performance Measurement

The Balanced Scorecard emphasises the importance of measuring business

performance from the perspective of strategic implementation, rather than relying
solely on financial results. Senior managers tend to pay far too much attention to
the financial dimensions of performance and not enough attention to the driving
forces behind those results. Financial measures are lagging indicators i.e. backward
looking. They are designed to rectify or change past results. Performance drivers on
the other hand are within the control of the management in the present and the
Balanced Scorecard methodology encourages management to look at these leading
indicators as well. By specifying the important process measures, assessing them,
and communicating the firm’s performance based on these criteria to the
employees, the managers can ensure that the entire organisation participates
actively in the strategy implementation process. It is a unifying tool in strategy
implementation.

To achieve strategy alignment, firms must engage in a two-step process. As

mentioned before, first the managers must understand the details of how value is
created in their firm. Once this is done, they can design a measurement system
based on their understanding. The first step focuses the organisation on two
dimensions of the strategy implementation process namely breadth and causal
flow. Breadth refers to the fact that companies must study more than just financial
results as outcomes of strategy implementation. It must also focus on other key
performance drivers. Causal flow refers to the series of linkages between financial
and non-financial determinants of firm performance. This gives the managers a
deeper perspective of why certain financial results are the way they are. It allows
them to link the financial measures to the non-financial measures of success. The
second point is the design of a measurement system. This involves attaching
metrics to the financial and non-financial determinants. The Balanced Scorecard
identifies four key perspectives that directly and completely define strategy
measurement and analysis. They include the financial perspective, the customer
perspective (e.g. customer loyalty and satisfaction), the internal processes
perspective (e.g. process quality and process cycle time) and finally learning and
growth perspective (e.g. employee skills) that is the leading indicator.

The next important step is communication. The top management that has done the
above analysis must communicate their findings and decisions to the middle and
front-line managers, who in turn must communicate it to the other employees. In
this way, everyone in the organisation is made aware and can participate in the
strategy implementation process. This also helps allocate resources intelligently and
guides employees’ decisions. The Balanced Scorecard model recognises the
importance of both tangible and intangible assets and of financial and non-financial
measures. It focuses on the complex connections among the firm’s customers,
operations, employees and technology and places an important role for HR. The
BSC framework highlights the differences between leading and lagging indicators.
Lagging indicators include financial metrics, which typically reflect only what has
happened in the past. Such metrics accurately measure impacts of past decisions
but don’t help in making current decisions or guaranteeing future outcomes. The
leading indicators are the unique indicators for each firm. They include process
cycle time, customer satisfaction or employee strategic focus. These indicators
assess the status of key success factors that drive the implementation of the firm’s
strategy and hence emphasise the future rather than the past.

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Integrating HR into the performance measurement system

To integrate HR into a business performance measurement system, managers must

identify the points of intersection between the HR and the organisation’s strategy
implementation plan. These points are commonly called the HR deliverables. They
are the outcomes of the HR architecture that serve to execute the firm’s strategy.
This is in contrast to the aspects of HR that focus on HR efficiency and activity. The
deliverables can be classified into two groups, namely the performance drivers and
the enablers. Performance drivers are core people-related capabilities or assets
such as employee productivity and satisfaction. There is no single correct set of
performance drivers. Each firm needs to identify its own set based on its unique
characteristics. Enablers reinforce performance drivers. E.g. Preventive
maintenance can be considered an enabler of on-time delivery, which is a
performance driver. A performance driver can have several enablers. Most of the
time, each enabler separately may seem rather mundane but it’s the cumulative
effect that has strategic importance.

Performance Drivers: HR managers tend to focus on performance drivers in an

attempt to demonstrate their strategic impact. However, in most cases although
they do stress on these drivers they are unable to make a solid case for it since they
do not have the right measures. Without measures one cannot display HR’s actual
contribution to the overall mission. Most of the measures used are very simplistic
and it undermines HR’s credibility in the organisation. This credibility is very
important since it is what matters when a manager is faced with a conflict between
financial and non-financial reports. For example, if people measures are good but
financial measures are bad, the manager will go for the solution that supports the
credibility of finance or HR. In most cases it is finance and the immediate decision is
reducing bonuses etc. as the CFO might feel it is not warranted when there is no
proof of performance. The point that is being missed is that the CFO is looking at
the lagging indicators. Balanced performance needs one to look at the leading
indicators such as HR measures as well since these are the ones that create value
in the organisation. High HR scores in the face of low finances actually signal
improved finances in the future (provided other leading indicators are also on the
positive side). Similarly, strong financial measures and weak leading measures such
as HR measures are indicative of a financial problem in time to come. Thus,
managers must interpret these measures in a balanced manner looking at the past
and into the future. Identifying HR performance drivers can be very challenging
since it is unique to the firm. It is important to identify the performance drivers and
integrate them directly into performance criteria giving them equal weight with the
more traditional performance measures. For example, one half of the bonus pays
can be based on the financial results while the other half is based on the
employee’s adherence to the value behaviours.

HR enablers: HR enablers reinforce the core performance drivers. If employee

productivity is identified as a performance driver, re-skilling and training can be
considered an enabler. Some enablers might be specifically HR focused i.e. they
enhance the effectiveness of HR performance drivers. There might also be some HR
enablers that do have profound positive effects with respect to the other
perspectives as well, such as customers, operations and the financial segment. It is
important to identify these and keep them up to date with the current goals of the
organisation. Without the properly aligned enablers, it is not possible to implement
new strategies. The systemic aspect of HR once again comes to the forefront,
whereby the entire HR system can influence employee behaviour from different
points. Thus, HR managers should evaluate the degree to which their firm’s system
of enablers support the HR as well as non-HR

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performance drivers as listed in their Balanced Scorecards. By identifying the links

between enablers and universal performance drivers, the HR team can play a much
larger role and suggest ideas that can affect other sectors in the firm as well.

The Seven-Step Model for Implementing HR’s Strategic Role

Ulrich et al. discuss a seven step model for formalising the strategic role of HR. They
are summarised below:

Defining Business Strategy:

HR managers should focus on implementation of strategy. By doing so, they can

facilitate discussion about how to communicate the firm’s goals throughout the
organisation. When strategic goals are not developed with an eye towards the
implementation detail, they tend to be too generic and abstract. These vague goals
will tend to confuse employees and they would not know how exactly to implement
the strategies. The important thing for HR managers is to state the goals in such a
way that the employees understand what exactly their role in the organisation is
and thus the organisation knows how to measure success in achieving these goals.

Building a case for HR as a strategic asset:

Once a firm clarifies its strategy, HR professionals need to build a clear case for the
strategic role of HR. In concrete terms, they must be able to explain how and why
HR can support the strategy. It is important to look at as much of case histories and
internal as well as external research while going through this phase. Although it is
not wise to imitate others, one can learn a lot by looking through past experiences
of others. Basically, the direct impact on the HR systems’ high performance
characteristics is non-linearly related to the increase in market value. This is
because in the lower ranges of performance, increase in market value is basically
because HR stops making mistakes it used to make in the past. It is almost like it is
getting out of the way and avoids blunders and wrong practices that worsen the
situation. In the middle range of performance, HR starts consolidating its efforts. It
is learning from its mistakes and in the process does not actually add much to the
market value of the employees and the company, but once a certain threshold is
crossed indicating that the firm has adopted the appropriate HR practices and
implemented them effectively, the market value soars exponentially. This is mainly
because the HR system starts getting integrated into the overall strategic system of
the firm. Basically, the firms must consolidate the appropriate HR policies and
practices into an internally coherent system that is directly aligned with business
priorities and strategies that are most likely to create economic value. This can lead
to significant financial returns to the company. It is this plan that must be made
concrete and shown as a strong case to make senior management believe in HR’s
potential.

It is important to note however, that simple changes in an HR practice do not make

a difference. The HR measures describe the whole HR system and changing the
system to cross the threshold mentioned above needs time, effort, insight and
perseverance since results are not directly proportional. This clearly indicates the
requirement of an HR transformation rather than a change. It is this very character
of transformation, which is difficult and time-consuming to achieve, that makes HR
a strategic asset.

Along with value creation, there must also be a strong case for HR’s role in strategy
implementation. Strategy implementation rather than strategy content separates
the successful from the unsuccessful firms. It is easier to choose an appropriate
strategy than to implement one.

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This once again shows the strategic nature of HR’s role in performance
improvements. Successful strategy implementation is driven by employee strategic
focus, HR’s strategic alignment and a balanced performance measurement system.
The most important HR performance driver is a strategically focused workforce.
Effective knowledge management combined with the above-mentioned factors
creates a strategically focused organisation.

Creating a Strategy Map:

The first two steps clarify the firm’s strategy. This paves the way for the
implementation process. But, before this is done, the firm must get a clear
understanding of its value chain. The value chain is the complex cumulative set of
interactions and combinatorial effects that create the customer value in the
products and services of the firm. It is important that the firm’s performance
management system must account for each of the links and dependencies in the
value chain. The Balanced scorecard framework refers to this process and creating
a strategy map. These are basically diagrams that show the links in the value chain.
It shows how different components in different layers interact. It is what provides
managers and employees the big picture of how their tasks affect the other
elements in the firm and how it affects overall strategy. This process should involve
managers from all over the organisation, not just HR. The broad participation is
required to improve the quality of the strategy map. It also allows each member of
the team who is an expert in his or her domain to provide his or her own insights
into what is accomplishable. The following questions have been identified as the key
ones to be asked during the strategy map creation process.

• Identify the critical strategic goals from the generic ones.

• Identify the performance drivers for each goal.

• Think about how one can measure progress towards these goals.

• Identify barriers to the achievement of each goal.

• Recognise the employee behaviours needed to ensure that the company achieves
its goals.

• Identify missing employee competencies and check if HR is providing the

necessary competencies.

• Finally, decide what needs to change.

These basic questions generate a wealth of information about how well a firm’s HR
has been contributing to the success of the organisation. Along with these
discussions, it is useful for the company to conduct surveys within the organisation
to identify the extent to which each employee understands the organisational goals.
Once the whole picture of the firm’s value chain is highlighted, the firm can then
translate the information into a conceptual model using language and graphics that
make sense to the members of the organisation. The model should then be tested
for understanding and acceptance amongst the leaders and the employees.

The strategy map essentially contains predictions about which organisational

processes drive firm performance. The company can validate these hypotheses only
after achieving the goals set for each of the performance drivers and then
measuring their impact on overall firm performance. The graphical nature of the
strategy map helps the senior management as well as the employees have more
confidence in the strategy implementation plan.

Identifying HR deliverables within the strategy map:

HR creates much of its value at the points of intersection between the HR system
and the overall strategy implementation system of the organisation. Thus, to
leverage this to the maximum possible extent it is important that there is a clear
understanding of both sides of this intersection.

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In the past, HR managers lacked the required amounts of knowledge about the
business side and general managers did not fully understand the HR side. It is HR’s
responsibility to depict HR deliverables including performance drivers as well as HR
enablers in the strategy map of the firm. Performance drivers such as employee
competence, motivation and availability are very fundamental and so it might be
difficult to locate these precisely on the strategy map. It is important to identify
those HR deliverables that support the firm-level performance drivers on the
strategy map. The focus should be on the kind of strategic behaviours that depend
on competencies, rewards and work organisation. E.g. Employee stability improves
R&D cycle time, the latter being a firm-level performance driver. Thus, employee
stability becomes an important HR enabler. Once this enabler has been identified,
the firm can design policies such as bonus schemes etc. that would encourage R&D
staff to continue working for the firm.

Aligning the HR architecture with the HR deliverables:

The above-mentioned steps encourage the top-down thinking approach, whereby

strategy decides what HR deliverables the firm needs to focus on. It is also
important to consider how the HR system made up of the rewards, competencies;
work organisation etc. needs to be structured to provide the deliverables that are
identified in the strategy map. This step enhances the value creation aspect of the
firm by aligning the HR system with the firm’s larger strategy implementation
system. For this, internal alignment and external alignment are important. Internal
alignment refers to the aligning components within the HR system. External
alignment refers to the alignment of the HR system with the other elements in the
firm’s value creation process. These two are not isolated processes. They are
closely related. Internal alignment is necessary but not sufficient in itself for
external alignment to occur. Basically, highly cohesive HR strategies will work as
long as they are aligned well with the overall strategy of the company. It will fail if it
is not periodically reshaped so as to align it with the overall strategy. However, for a
particular fixed overall strategy, all firms need an internally aligned HR strategy in
order to achieve the overall goals. Misalignment between the HR system and the
strategy implementation system can destroy value. In fact, the wrong measurement
system can have the exact opposite effect than intended.

Designing the Strategic HR measurement system:

The above steps guide the development of the HR architecture and lay the
groundwork necessary to measure the performance relationship between HR and
the firm’s strategy. The next step is to design the measurement system itself. This
requires a new, modern perspective on measuring HR performance. It also requires
HR to resolve several new technical issues that it might not be familiar with. To
accurately measure the HR-firm performance relationship, it is imperative that the
firm develops valid measures of HR deliverables. This task has two dimensions.
Firstly, HR has to be confident that they have chosen the correct HR deliverables.
This requires that HR have a clear understanding of the causality in the value chain
for effective strategy implementation. Secondly, HR must choose the correct
measures for those deliverables. During this process of developing the HR
scorecard, the firm might go through several stages of increasing sophistication.
The first stage is normally the traditional category of measures. These mainly
include operational measures such as cost per hire, activity counts etc. These are
not exactly strategic measures. In the second stage, HR measures have a strategic
importance but they don’t help much in making a case for HR as a strategic asset.
Firms may declare several people measures such as employee satisfaction as
strategic measures and these might be included directly into the reward systems. In
this stage, there tends to be a balance between financial and non-financial
measures but there is less of an agreement on how exactly they combine together
to implement the strategy. These are normally hasty decisions and the firms might
have not gone through all the previous steps mentioned above. The next stage
represents a transition point whereby the firm includes non-financial measures such
as HR measures into its strategic

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performance measurement system. The links between the various measures are
also identified i.e. they are placed appropriately in the strategy map. The HR
measures now actually track HR’s contribution to strategy implementation. In the
final stages, the HR measurement system will enable the firm to estimate impacts
of HR policies on firm performance. If the value chain is short and the strategy map
is relatively simple, the complete impact of HR on the overall performance can be
measured. For more complex value chains, the impact can be more accurately
measured on local segments or sectors of the strategy map. These local impacts
can then be assimilated to give a good measure of the total impact on the firm’s
performance. Thus, each level of sophistication of the measurement system adds
value to the non-financial measures and forces in the firm and enables a better
performance appraisal.

Implementing the strategy by using the measures:

The previous step completes the HR scorecard development process. The next step
is to use this powerful new management tool in the right way. This tool not only
helps the firm measure HR’s impact on firm performance, but also helps HR
professionals have new insights into what steps must be taken to maintain HR as a
strategic asset. It helps the HR professionals dig deeper into the causes of success
and failure and helps them promote the former and avoid the latter. Implementing
the strategy using the HR scorecard requires change and flexibility as well as
constant monitoring and re-thinking. The process is not a one-time event. HR
professionals must regularly review the measures and their impacts. They must
review the HR deliverables identified as important and see to it that the drivers and
enablers and internally as well as externally aligned. Special reviews of the HR
enablers must be conducted as these have the maximum direct impact on specific
business objectives. Enablers that do not tend to play a positive role should be
replaced.

Benefits of the HR Scorecard

The HR Scorecard offers the following benefits:

• It reinforces the distinction between HR do-ables and deliverables: The HR

measurement system must clearly distinguish between the deliverables that
influence strategy implementation and do-ables that do not. Policy implementation
is not a deliverable until it has a positive effect on the HR architecture and creates
the right employee behaviours that drive strategy implementation. An appropriate
HR measurement system will encourage HR professionals to think both strategically
as well as operationally.

• It enables cost control and value creation: HR is always expected to control costs
for the firm. At the same time, HR has to fulfil its strategic goal, which is to create
value. The HR scorecard helps HR professionals balance the two and find the
optimal solution. It allows HR professionals to drive out costs where appropriate, but
at the same time defend investments in intangibles and HR by outlining the benefits
in concrete terms.

• It measures leading indicators: Just as there are leading and lagging indicators in
the overall balanced performance measurement system, there are drivers and
outcomes in the HR value chain as well. It is thus important to monitor the
alignment of the HR decisions and systems that drive the HR deliverables.
Assessing this alignment provides feedback on HR’s progress towards these
deliverables and lays the foundation for HR’s strategic influence.

• It assesses HR’s contribution to strategy implementation: The cumulative effect of

the HR Scorecard’s deliverable measures provides the answer to the question
regarding

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HR’s contribution to firm performance. All measures have a credible and strategic
rationale. Line managers can use these measures as solutions to business
problems.
• It lets HR professionals effectively manage their strategic responsibilities: The
scorecard encourages HR managers to focus on exactly how their decisions affect
the successful implementation of the firm’s strategy. This is due to the systemic
nature of the scorecard. It provides a clear framework to think in a systemic
manner.

• It encourages flexibility and change: The basic nature of the scorecard with its
causal emphasis and feedback loops helps fight against measurement systems
getting too standardised. Standardisation is good for things that don’t tend to have
a dynamic nature but firm performance is a dynamic phenomenon. Every decision
needs to be taken based on the past and future scenarios. One of the common
problems of measurement systems is that managers tend to get skilled to obtain
the right numbers once they get used to a particular measurement system. The HR
scorecard engenders flexibility and change because it focuses on the firm’s strategy
implementation, which constantly demands change. With this framework, measures
simply become indicators of the underlying logic that managers accept as
legitimate. It helps them look at the bigger picture and since there are no perfect
numbers it makes it easier for managers to change direction when needed.

To clarify the HR Scorecard framework it is important to summarise a case study.

The next section explains the details of the HR scorecard developed by Verizon, a
leading telecommunications provider in the United States.

Case Study: Verizon

Verizon HR has effectively designed and implemented a strategic management

system, which is based upon the balanced scorecard model of Dr. David Norton and
Dr. Robert Kaplan of Harvard Business School. The HR Balanced Scorecard was
conceived with new economy organisational dynamics in mind. The scorecard uses
a broad range of leading and lagging indicators which include overall strategy,
operational processes, customer perceptions, and financials to evaluate the
effectiveness of HR initiatives to the bottom line. The HR Balanced Scorecard
provides the means to monitor workforce indicators, analyse workforce statistics,
diagnose workforce issues, calculate the negative financial impact, prescribe
solutions, and track improvements. Verizon believed that in the coming years the
primary source of competitive advantage for their business would continue to
increasingly focus on the talent within the organisation, which meant that the ability
to effectively manage the employee talent within the organisation was critical.

While management tends to make decisions about how to invest in human capital,
few companies have an effective process to measure the value created by this most
valuable asset. In Verizon, they believed that HR could effectively manage the value
created by thorough investments in employees. Managers knew was how much was
paid to reward, hire, train, develop, and provide benefits to employees. What
managers needed to know, however, was where the investments were most
effective and valuable. Some of the questions that did not have answers at that
time were:

• Should the business expand the incentive pay program?

• Should they outsource safety administration?

• What is the most effective use of training dollars?

• How much should be spent on recruitment?

• Should employee services be in-sourced, out-sourced, or co-sourced?

• Should executive bench strength be built or bought?

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• What is the cost in human capital terms to break into a new market?

• Is the acquisition target a good fit and does it add or dilute the competitive
advantage in terms of talent?

• Do the current investments in employees match the strategic objectives of the

business?

• Is the HR organisation a partner with the business to manage our employees as

assets?

To answer these questions, management needed more information not just simple
cost figures. Management needed to track the financial results while monitoring
progress in developing human capital and acquiring the talent and capabilities
needed for business success. The Balanced Scorecard was developed by Kaplan &
Norton, 1996 and provided the ideal system that leverages the traditional financial
and efficiency measures that were available for Human Resources with metrics of
performance from three additional perspectives namely, customers, internal
business processes, and learning and growth.

In 1996, J. Randall MacDonald, Executive Vice President–Human Resources of GTE

Corporation (now known as Verizon), was facing the biggest challenge of his career
—to create the HR strategy and plans to support GTE’s workforce through a major
business transformation. The Telecommunications Act was transforming the
regulated world of protected markets and established profit margins into a highly
competitive business environment for the telecommunications giant. Historically,
GTE had emphasised a focus on infrastructure quality and customer service. GTE’s
senior business leaders were preparing to transform the company into a market-
focused organisation that would be the communications provider of choice to
targeted customer markets. Significant emphasis on new markets and additional
services was part of the strategy. The telecommunications world following
deregulation was turbulent. Technology acceleration, emerging customer needs,
and data and video transmissions were changing how business operated. GTE’s
customers were becoming price sensitive and could now demand superior service
and advanced support. The competition was in price, products, and technology.
New mergers and partnerships were beginning to occur; brand preferences and
aggressive tactics from non-traditional competitors were all part of the mix. GTE
Business Strategies were global in scope and translated directly to clearly
communicated targeted business results. Additionally, the workforce environment
was dramatically different and highly competitive. GTE faced the lowest United
States’ unemployment in 24 years. The employer–employee relationship had
changed; employees were less likely to remain with a single employer; specialised
talent was hard to find; employees expected more work/life balance; and the
diverse talent pool most sought had differing interests and needs. Creating the
value proposition to acquire the talent to drive the business was more difficult to
define and changed rapidly.

HR Challenge & Strategy:

The Human Resource Challenge was to translate the new business strategies and
targeted business results into human capital needs. Recognising that GTE’s
employees were a critical component in achieving the business goals, GTE HR
leaders inventoried the current skills and abilities that would provide value both in
the short-term and into the future. HR professionals then identified the critical
people imperatives necessary to grow that talent to increase the value delivered by
the workforce. GTE would need new behaviours, actions, and capabilities to drive
the business results. To focus the HR organisation on the achievement of these
people imperatives, GTE developed a new HR strategy to support the specific
people requirements of the business strategy.

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This HR strategy was defined in five strategic thrusts:

1. Talent:

• enlarge the talent pool

• invest in employees’ development

• ensure diversity

2. Leadership:

• establish a system to assess high-potential employees

• provide coaching and development

• establish accountability and rewards for leadership behaviour

3. Customer Service & Support:

• create an environment that fosters employee engagement

• increase business intelligence within the workforce

• provide solutions to retention issues

4. Organisational Integration:

• create better systems for knowledge management

• enhance union partnerships

5. HR Capability:

• develop core HR competencies

• identify key talent for growth and development

• invest in technology

• invest in employee self-service

• better understand the relationship of HR actions to business outcomes

The biggest problem was communicating and reinforcing the linkage between HR
actions and business results. The business had a clear strategy and targeted
business results. The HR Strategy was directly linked to the needs of the business
and expressed in terms of HR strategic thrusts. The prime objective was to
effectively communicate and execute on strategic intent, motivate and track
performance against organisation and business goals, and to align HR actions with
business results.

The Team:

A newly formed HR Planning, Measurement, and Analysis team was created to

design and implement a tool that would quantify HR’s contribution to the business.
The Balanced Scorecard model, which was at the time a leading edge corporate
performance assessment tool, was selected as the framework to adapt and build an
HR Measurement model. J. Randall MacDonald served as the senior executive for
the HR measurement initiative. This role was critical to the success of the project.
Randy MacDonald actively influenced his senior leadership team within HR to secure
their buy-in and to hold them accountable for supporting the project. The newly
formed Planning, Measurement, and Analysis team included a director and four
employees solely dedicated to the design, development, implementation, and
operation of the HR Measurement System. An HR Measurement core team included
eight subject matter experts representing each of the functions within HR and the
business units. The core team members were instrumental in assuring alignment of
the measurement model and communicating and training HR departments on the
applications and uses of the HR Scorecard. The Balanced scorecard model
complements financial measures of past performance with measures of drivers of
future performance. Unlike other accounting models, the Balanced Scorecard
incorporates valuation of organisations’ intangible and intellectual assets such as
high-quality products and services, motivated and skilled employees, responsive
internal processes and innovation and productivity. The HR Scorecard approach
used slightly modified the initial Balanced Scorecard model, which at the time was

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most commonly used at the corporate level. The approach, however, remained
focused on long-term strategies and clear connections to business outcomes.

The core team members were selected on the following criteria:

• Common link: Selected by functional VP

• Knowledgeable on key processes within your HR functional area

• Dedicated to building awareness and accountability toward achieving better

outcomes

• Focused on measuring what matters to enable better decision making and

resource allocation

Their key responsibilities included

• Attend Core Team meetings

• Communicating to your function the message of why we are measuring HR

• Establish SMEs within your function

• Identify key processes within your function

• Establish key performance indicators/measures reflecting key processes

• Submit data within designated timeframe

• Responsible for overseeing target setting process for your functional area

The HR Balanced Scorecard includes four perspectives:

— Strategic Perspective

• Measures success in achieving the five strategic thrusts. Since the basis for the
HR Balanced Scorecard is achieving business goals, the aligned HR Strategic
objectives are the drivers for the entire model.
— Operations Perspective

• Measures HR’s success in operational excellence. The focus was primarily in three
areas: staffing, technology, and HR processes and transactions.

— Customer Perspective

• Includes measures of how HR is viewed by the key customer segments. Survey

results were used to track customer perceptions of service as well as assess overall
employee engagement, competitive capability, and links to productivity.

— Financial Perspective

• Addresses how HR adds measurable financial value to the organisation, including

measures of ROI in training, technology, staffing, risk management, and cost of
service delivery.

The Process:

A deliberate approach to the project was clearly defined and communicated to each
member of the team and to the HR organisation. The project was established and
organised into four major components: Planning and Alignment, Assessment,
Development, and Implementation.

• Planning and Alignment set the foundation for the project. Project plan, objectives,
and milestones were established. Team education and training was imparted on
business performance management, the balanced scorecard methodology, and its
application to HR measurement.

• Assessment focused on understanding what was used at that time as measures to

evaluate HR performance and to assess the relative value to the business.

• Development began the actual process of designing the HR measurement model.

Defining the measurement criteria and scorecard measures, establishing targets,
defining

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the process for collecting and tracking results, and creating the communications
strategy were the key deliverables in this phase.

• Implementation operationalised the HR Scorecard from the drawing board to a

management tool for HR to assess performance and value added to the business.
Data collection, results reporting, evaluation, and analysis all came together as the
scorecard was implemented. Communications and training were delivered to the HR
organisation as the HR Scorecard rolls out. Once the team was selected, and the
mission and objectives were established and communicated, the work to link
Business Strategy to HR Strategy began. Fig. 1 illustrates the initial model used to
align Business Strategy to HR Strategy and Actions and lists the specific outputs
within each step.

Fig 1: Initial model used to align HR strategy to business strategy [2]

Beginning with a clear understanding of the business strategy and goals, the HR
team worked with the business leaders and HR leaders to determine the key
questions to be answered for the business and to determine what key drivers of the
business would translate into clear people requirements. The outcome was an
understanding of what questions need to be answered and of the competitive
capabilities required for current and future business success. This provided the
detail to build a strategy map, which would support the design and development of
the HR Balanced Scorecard. Fig. 2 describes the process followed to determine
people requirements and business drivers.

The people requirements defined the HR Strategy that then translated into specific
HR initiatives that should directly support the attainment of HR Strategy. Having
this alignment allowed

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Verizon to develop a strategy map, which illustrated the cause and effect linkage
between HR Strategy and business objectives. Using the strategy map as the guide,
they were then able to evaluate the strategic objectives in terms of measures and
outcomes (Fig 3.). They could then further refine these into lagging measures
(which tell how well a company has already done) and leading measures (which are
indicators of future performance).

Fig 2: The people requirement and business driver determination process [2]

In addition to aligning the scorecard measures to the business objectives, they

developed causal links between the objectives and the measures. For example, one
of the financial objectives, Minimise HR Cost, was expected to be an outcome of the
HR Strategy. To create a clear line of sight across the perspectives, they linked
Minimise HR Cost back to objectives in the Customer, Operations, and Strategic
Perspectives that were performance drivers for these outcomes. This cause and
effect relationship described that if HR integrated the organisation, implemented
technology enablers and optimised service delivery through streamlined processes
the costs for service delivery would decrease and reduce overall HR expense.

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Fig 3: The HR Scorecard Strategy Map [2]

Once they had defined the link from the financial objectives, HR focused on the
critical human capital requirements defined by the business. Previously, HR
Performance measurement at Verizon had focused solely on improvement of
administrative and transactional efficiency such as the error rate in employee
benefit processing and the number of training hours delivered per month. The focus
was expanding to include new processes for the HR organisation to develop
exceptional service delivery and increased employee value while ensuring a focus
on cost and value.

As the measurement model was being developed to support the business’s people
requirements, the objectives became clearer. HR recognised that the employees
would need to expand their skills and increase their productivity to provide the new
products and services that business would provide.

• Sales representatives needed to be able to serve as the customers’

telecommunications solution provider.

• The customer service representatives also would need ready access to customer
account information and be trained to quickly recognise possible customer needs
and to communicate optimal mixes of products, services, and price plans to
customers.

• New incentive systems were needed to encourage the new behaviour and skill
acquisition as well as retention plans for critical skill employees.

Providing workforce solutions and ensuring alignment and a strategy-focused

workforce all contributed to a more capable and skilled employee population.

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Historically, HR had a difficult time communicating to the business and maintaining

their focus on the investments and initiatives designed to build employee capability.
Strategic skill development, leadership development, and employee development
programs were all discussed with business leaders and generally accepted as
valuable. When financial pressure was applied, however, these types of programs
usually were the first to go. Now with measures, which linked leadership
development with competitive capability, people could see the relationship between
investing in these programs and achievement of long-term business goals.

Early Results:

An early benefit of the HR Scorecard work was that it provided a process for the
senior HR team to focus on a clear and common objective: to establish a common
strategy for HR in support of business objectives. The high level strategy was for
everyone to be a partner to the business. Rarely, however, did all of the HR
leadership agree on how to implement the strategy because each person had a
different opinion about what being business partner really meant and whom exactly
the customer was. Taking strategy and translating it into a measurement and
management model gave specific and operational definitions for being a business
partner and targeted business customers.
Communicating the HR Scorecard:

Communicating the HR Scorecard across the HR organisation and the business is a

critical aspect of successful implementation. The development process increased
learning and understanding but was only visible to the top leaders within HR and
the business. To use the HR Scorecard to drive change throughout the organisation,
the Planning, Measurement, and Analysis team developed a phased approach to
communicate and train the managers and their departments on this new
management tool. The emphasis on the scorecard was on the value the tool
provided in communicating strategy and alignment to the business. It also served
as a tool that provided proactive solutions to employee issues or deterrents before
a negative impact could occur to the bottom line. Performance measurement was
also an essential component, and all in the HR organisation had their incentive
compensation tied to the results of the HR Scorecard.

Training and communication material was used extensively to reinforce

understanding of the new management tool. An interactive teaching tool was
developed to train HR professionals to use the HR Scorecard results in problem-
solving workforce issues. Verizon realised that measures do not manage, and simply
tracking results was not the only intended use of the HR Scorecard. The value was
to use the information provided in the scorecard and take action to influence and
improve business performance. For example, one of the most important areas to
manage in terms of cost was employee turnover. Turnover, particularly within
target front-line workforce centres, was critical to productivity and expense control.
High turnover results in lower productivity, higher training, and staffing and
occupational health costs. The impact is across the board and affects business
profitability.

Starting in 1998, with a new disciplined process using the HR Scorecard, HR

professionals tracked and analysed turnover statistics, determined reasons for
turnover, calculated the negative financial impact, prescribed solutions, tracked
improvement rends, and showed dramatic results. In partnership with the business
leadership in targeted call centres (where operators give minor technical assistance
and forward problems to specialists), significant costs were avoided by reducing the
regretted turnover.

Linkages between business processes and value chains to human resource actions
and services were clearly defined as the HR Scorecard became a business tool
understood and used across the

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HR organisation. Not only are human capital initiatives needed to increase

employee value delivered to the business, they are vulnerable to business process
changes and the measures taken in isolation can be misleading. For example, in a
regional call centre, the external business measures of customer satisfaction were
trending downward and accelerating. When HR reviewed the call centre results from
the HR Scorecard, there was no single indicator that showed any direct relationship
to the customer satisfaction issue; however, the measures, together with input and
analysis by HR professionals and line management, pointed to both an issue and
solution not readily apparent. The HR metrics showed a very low cost per hire, a
very quick cycle time to fill jobs, and an average employee separation rate. On the
surface nothing looked unusual. Ironically, the staffing metrics showed a high
efficiency and cost control. Drilling deeper showed a high cost of training, a very
high separation rate for short service employees, and declining employee
satisfaction for long service employees. Further analysis revealed that six months
prior a significant expense reduction effort had been put in place for this call centre.
HR responded to the required reduced expense by changing talent pools and
reducing the investments in selection methods. This action kept costs low while
bringing in applicants who were ready to start quickly but were harder to train and
keep. It was a bad trade-off. It made sense to accept a longer cycle time and more
cost to ensure the right person was put in the right job.

Fig 4: The Web-Desktop Interface for a HR Scorecard [2]

Web-based Implementation and Graphics (Frontend and Backend):

Drill down capability below the superficial level of results of the HR Scorecard was
enabled through a technology architecture, which at the top level used a Web-
based application to deploy and communicate to the desktop HR Scorecard results
in a virtual briefing book. Fig. 4 illustrates the HR Scorecard user interface which is
available on-line to all HR professionals. The virtual © www.hrfolks.com All Rights
Reserved

briefing book is easy to use and uses colour (green, yellow, and red) to indicate
whether a metric has exceeded, met, or fallen below target. The underlying
technology supporting the virtual briefing book provides links to Enterprise
Resource Planning (ERP) systems (SAP and PeopleSoft) and a data-warehouse using
a data-mining tool to drill down below the HR Scorecard results to analyse and
model cause and effects. Predictive modelling to evaluate workforce decision
impacts (positive and negative) prior to execution is the primary objective of this
investment in technology. Fig. 5 illustrates the technology architecture. The
Employee Data Warehouse provides the intelligence behind the measures tracked
by the HR Scorecard. The HR professionals have access to a rich base of employee
data integrated from 16 different HR systems including 20 years of history. Users
have a suite of reporting tools that enable them to perform sophisticated
multidimensional workforce analysis and predictive modelling. Hidden correlation
between measures to prove or disprove what business managers previously knew
only through hunches could be determined.

Fig 5: HR Scorecard Implementation Architecture

The HR balanced scorecard served as a catalyst to pull together the two HR
leadership teams during the merger integration planning. The process of defining
the role and strategy of HR in the new company provided a common objective for
integrating the HR leadership team. Articulating a common strategy and business
alignment for HR services provided a positive perspective—a clear focus on the
customer and a shared sense of the enormous potential to deliver world-class
programs. The newly merged company faces a highly competitive environment
where a competitive cost structure, consistent revenue growth, controlled expense,
and excellent investment management are critical to win in the market place. The
Verizon HR Scorecard continues to provide the forum for HR leaders to actively
discuss performance and future targets. HR leaders now have a tool, which supports
a focus on tactical excellence while ensuring alignment with business strategy.

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Conclusion:

The HR Balanced Scorecard has made it possible for HR managers to understand

how to align HR strategy with the overall business objectives. They are able to
explain not only what they are tracking but also how they are performing on
essential strategies for the business. Business environment and the objectives and
strategies will continue to evolve, and HR managers will continue to be flexible and
creative in supporting the changes. The value of the HR Scorecard as a tool is that it
can get HR to the new goals and measures and through the process ensure
continued learning and change management.

References:

[1] Becker, Huselid, Ulrich; The HR Scorecard (2001)

[2] Garrett Walker and J. Randall MacDonald; Designing and implementing an HR

Scorecard; Human Resource Management, Winter 2001, Vol. 40, No. 4, Pp. 365–377

[3] Arthur K. Yeung; Measuring human resource effectiveness and impact; Human
Resource Management; Fall 1997, Vol. 36, No. 3, Pp. 299–301

[4] Dave Ulrich; Measuring human resources: An overview of practice and a

prescription for results; Human Resource Management, Fall 1997, Vol. 36, No. 3, Pp.
303–320

[5] Arthur K. Yeung, Bob Berman; Adding value through human resources:
Reorienting human resource measurement to drive business performance; Human
Resource Management, Fall 1997, Vol. 36, No. 3, Pp. 321–335
[6] Richard E. Wintermantel, Karen L. Mattimore; In the changing world of human
resources: Matching measures to mission; Human Resource Management, Fall 1997,
Vol. 36, No. 3, Pp. 337–342

Chapter Quiz

This activity contains 26 questions.

Top of Form

The foundation of most employers' pay plans is:

Production.

Time.

Performance.

None of the above.

_____ can cause salaries of long-term employees to be lower than

those of newly-hired workers.

Salary compression

Aggressive merit pay

Cost-of-living differentials

Geography
With respect to compensation, _____ refers to how a job's pay rate in
one company compares to the job's pay rate in other companies.

Individual equity

Internal equity

Procedural equity

External equity

Employers use _____ jobs as anchors around which to slot their other
jobs.

Benchmark

Wage curve

Salary surveys

Competency-based

A formal and systematic comparison of jobs to determine their worth

relative to each other is:

Benchmark jobs.

Compensable factors.
 Job evaluation.

Ranking method.

Compensable factors _____.

Establish how the jobs compare to one another

Are factors the jobs have in common

Set the pay for each job

All of the above

A job evaluation committee should be appointed to perform the actual

evaluation because:

Members will have different perspectives regarding the nature of the job.

Employee will more readily accept the results.

Job must be ranked for pay purposes.

1 and 2

Jobs of approximately equal difficulty or importance as established by

a job evaluation are grouped into:

Benchmark jobs.
 A wage structure.

Pay grades.

Pay ranges.

Demonstrable characteristics of a person, including skills, knowledge,

and behaviors, that enable performance define a person's:

Experience.

Market pricing.

Competencies.

Compensable factors.

Competency-based pay uses which of the following basic types of pay

programs?

Knowledge-based

Job oriented.

Skill based.

One and three.

_____ refers to collapsing salary grades and ranges into just a few
wide levels with wide ranges of jobs and salary levels.
 Broadbanding

Strategic compensation

Comparable worth

None of the above

Direct financial payments to employees may be based on time or on

seniority.

True

False

Sales commissions tie employee compensation to the employee's

performance.

True

False

A firm's pay policies reveal how it uses its pay plan to further its
strategic aims.

True

False
Salary compression means newly-hired workers are paid more than
current workers.

True

False

The equity theory of motivation indicates that people are strongly

motivated to balance their contributions to their work with their
rewards for working.

True

False

A formal and systematic comparison of jobs to determine the worth of

one job relative to another is a compensable factor.

True

False

A wage curve shows the pay rates currently paid for jobs in each pay
grade relative to the points or rankings assigned by the job evaluation.

True
 False

A disadvantage of the ranking method of job evaluation is that it lacks

a standard for quantifying the value of one job relative to another.

True

False

A quantitative technique for evaluating jobs is the point method.

True

False

Ranking a job several times, once for each of several compensable

factors, then calculating an overall numerical rating is the factor
comparison method.

True

False

The basic aim of compensation plans for managers is to link pay to

performance.
 True

False

Competency based pay establishes pay rates on performance and

competencies rather than on title and tenure.

True

False

Describe the process of establishing pay rates while ensuring external,

internal, and procedural equity.

To create paragraphs in your essay response, type <p> at the beginning of the paragraph,
and </p> at the end.
Explain the use of competency-based pay, including definitions of job
competencies and how to identify competencies.

To create paragraphs in your essay response, type <p> at the beginning of the paragraph,
and </p> at the end.
A number of articles offering practical advice on various aspects of
running a small business are available from the National Federation of
Independent Business Research Foundation. Visit the organization's
website athttp://www.nfib.com/page/researchFoundation and click
on the Business Toolbox to access a variety of free tools.

To create paragraphs in your essay response, type <p> at the beginning of the paragraph,
and </p> at the end.
 Top of Form

Bottom of Form
Bottom of Form

Answer choices in this exercise appear in a different order each time the page is loaded.

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