Typically, business managers and human resources professionals utilize various tools to transform strategic organization goals into human resource management policies and practices. Some of these tools include Balanced Scoreboard (BSC), Return on Investment (ROI), Economic Value Added (EVA), and Human Resource Scorecard. The essay will compare and contrast these various tools and also include their advantages and disadvantages.
Comparison
Economic Value Added (EVA) relates to Return on Investment (ROI). Return on investment is a ratio of financial profitability that supports an organization to achieve its goals and objectives by highlighting various areas that need improvements ( Asche at al., 2018 ). Typically, ROI is a traditional tool that does not regard the cost of capital acquisition and cost switching. The Economic Value Added tool assists overcome the various shortcoming faced by Return on Investment.
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A balanced Scorecard compliments the traditional measure of ROI. BSC tool measures an organization's success by focusing on three significant perspectives such as sustainability measure, internal processes, and customer. Unlike any other tool, Balanced Scorecard connect short term actions with long term strategies. HR Scorecard is a tool derived from the Balanced Scorecard ( Cui, 2017 ). This tool evaluates the effectiveness and efficiency of Human Resource Management in accomplishing its strategic goals.
Differences
Vast differences are existing between ROI and EVA. ROI is a relative measurement tool, whereas EVA is an ideal tool form measurement. Furthermore, ROI differs from EVA in terms of calculation. BSC tool commonly categorizes any strategic goals, whereas EVA focuses on goals that add value to the organization. Additionally, BSC differs from HR Scorecard in that BSC evaluates the critical performance indicators, whereas the HR Scorecard acts as a guide for managers to quantify activities.
Advantages
| ROI | EVA | BSC | HR Scorecard |
| Well measure of profitability | Appropriate mindset creation | Makes goals achievable | Aligns organizational strategies with HR strategies |
| Can be understood and calculated easily | Includes all business cycle parts | Organization performance indicator | Identifies the various department in the organization that influences the goals. |
Application
ROI can be used in an organization to assess the current performance. EVA, on the other hand, can be used to gauge the use of innovative technologies. A balanced scorecard can be used to utilize company resources. HR Scorecard can be used to manage the score of human resources effectively.
References
Asche, C. V., Kim, M., Brown, A., Golden, A., Laack, T. A., Rosario, J., ... & Okuda, Y. (2018). Communicating Value in Simulation: Cost–Benefit Analysis and Return on Investment. Academic Emergency Medicine , 25 (2), 230-237. https://onlinelibrary.wiley.com/doi/abs/10.1111/acem.13327
Cui, P. (2017, November). The Research on Strategic Human Resource Management and the HR Scorecard. In 2nd International Conference on Humanities Science and Society Development (ICHSSD 2017) . Atlantis Press . https://www.atlantis-press.com/proceedings/ichssd-17/25888704
