Designing and Measuring Human Capital Key Performance Indicators: The Balanced Scorecard Approach

Most organizations today are struggling to cope with effectively measuring their workforce and calculating the human capital Return on Investments (ROI). The need of the hour is to align the human capital goals to the organization’s strategic objectives and then identify, track and measure the key human capital performance drivers till the operational level, following a top-down approach. The approach should be to link the top line with the bottom line and then calculate the overall human capital return on investment. This paper explains the ten important and easy-to-measure human capital key performance indicators (KPIs) that should be measured and tracked by organizations on a regular basis, describes why these should be measured and lists out the information and insights business leaders can use to make future decisions. The KPIs presented here are represented as per the balanced scorecard and are classified as either predictive (leading) or reactive (lagging).