Balanced Score Card Implementation

7/29/2019 Balanced Score Card Implementation

1/38

Performance Management -Balance Score Card ImplementationWorkshop

POLARIS


2/38

Objective

To develop finer elements of Company,Geography and SEC targets

To cascade the targets derived from the aboveto Individual performance targets up to ProjectDirector including performance indicators formeasurement

To develop action plans for achieving thetargets

To establish a performance review mechanism


3/38

WHAT IS BSC

IT IS A PROCESS

For establishing a shared understanding

of the strategy and what is to beachieved & How it is to be achieved onthe vital pillars of Organisationalperformance

And an approach to managing people

Which increases the probability ofachieving job related success.


4/38

BSC facilitates both at the Team and Individuallevel

Focus on Priority Areas for performance

Specifying the desired Results in the priority area

(Objectives)Identifying Actions required to get those results

(Action Plans), and

Monitoring and ensuring that the actions arecompleted fully and in time (Performance Reviews)


5/38

Main Features of BSC

Emphasis of significant Priority areas ( KRAS)

Objectives at all levels

ParticipationPeriodic review

Appropriate systems and procedures

Role clarityMultiple accountability


6/38

KEY CONCEPTS IN BSCMISSION

BUSINESS PLAN

KEY RESULT AREAS AND TARGETS FOR

Geography / SEC

INDIVIDUAL OBJECTIVES SETTING ( up to PDlevel)

ACTION PLANS FOR INDIVIDUAL

REVIEWS


7/38

REPRESENT PRIORITY AREAS (PARETO PRINCIPLE)

VERY PRECISE

NOT DIRECTIONAL

INTERNAL PROCESS

FINANCIAL

CUSTOMER

LEARNING AND GROWTH


8/38

EIGHT MOST COMMONLY USED PRIORITY AREAS FORBUSINESS ORGANISATION

> Profitability>

Market share> Productivity> Cost of quality> Product development

> People performance> Public responsibility> Financial Resources

Corporate HR

(Peter Drucker, John Humble)


9/38

SET IN THE KEY RESULT AREAS

Functions:1. It guides and stimulates action2. It provides a basis for evaluation

and control of performance

HIERARCHY OF OBJECTIVE

TIME

LEVEL

Qualifying conditions:1. TANGIBLE INTENTIONS WHICH

LEND THEMSELVES TOEVALUATION

2. AT THE END OF A SPECIFICPERIOD OF TIME / DATE


10/38

-SPECIFIC

- MEASURABLE

- AGREED

- REALISTIC

- TIME BOUND

Quantity,Quality,Cost and Time)


11/38

BSC comprises of the following

key steps:

Identifying Key result areas at EG & Team levels inconsonance with the elements of BSC

Setting objective for the EG / TEAM or work groupsand individual managers #

Directing activities (action plan) towards theachievement of these objectives.

Reviewing individual, work group, Team and EGperformance against these objectives at periodicintervals

# we will be focusing upto PD level for 2005-6


12/38

Why Company level objectives?

1. It is a basis for formulation ofGeography and SEC Objectives

2. It integrates the Organisation with theEnvironment

Why Geography or SEC level Objectives ?

1. It is a basis for formulation of EGand.Individual Objectives

2. It Integrates the Teams and EGs andSECs with the Organisation


13/38

WHY INDIVIDUAL

OBJECTIVES SETTING ??

Clarify the Individuals role vis--vis hisseniors,peers and subordinates

Integration of Individual needs andobjectives with that of the organisation

Availability of relevant basis for

performance assessmentDevelopment of Manager


14/38

Objective Setting process

Definition of the purpose of theorganisation

Understanding long range and strategicobjectives

Setting short term Co./ Geography / SECobjectives

Setting EG objectives

Setting individual manager objectives


15/38Corporate HR

Balance Score Card System

An objectiveshould :

Be Within a Priority Area ( KRA)

Clearly outline the results to be achieved

Define the time within which it is to be achieved


16/38Corporate HR


Any team level objective should be cascaded down to the working

level on the frame work for performance

Company level

Geography / SEC level

EG level

Team/Work Group level ( PD)

Individual level


17/38

1. TELL ME WHAT YOU

EXPECT FROM ME ?

2. GIVE ME AN

OPPORTUNITY TOPERFORM.

3. GIVE GUIDANCE

WHENEVER I NEED.

4. LET ME KNOW HOW

I AM DOING.5. REWARD ME

ACCORDING TO MYPERFORMANCE.

GoalSettingProcessAgreedupon KRAs/Objectives

Goal/role Clarity,

Empowerment toperform

PerformanceDevelopment Coaching

Reviews & feedback.

Performance relatedPays, bonuses etc


18/38

Individual Objective

setting Process

1. EG Council Meeting to understandIndividuals unique contribution to

achieve the EG Objectives2. DRAFT objectives document preparation

3. Agreement Meeting


19/38Corporate HR


PROFITABILITY

Company objective

To increase return on net assets

from 20% to 23%

by March 2006


20/38Corporate HR


Co. objective

To increase

return on net

assets from

__% to __%

by March 2006

FINANCIAL

Increase sales from 500 units in 2004-05 to 600

units in 2005-06 : Geography/Marketing

Increase realisation from _____% to ____%(

Goegraphy and SECs)

Improve collection on sales from ____ days to ___

days in March 2005-06 from 2004-05 Geography

Achieve cost reduction of 5% on expenses by March2005-06 -All SECs

Increase throughput from __% in 2004-05 to __% in

2005-06SECs


21/38Corporate HR


Company

objective

To reduce

cost by 5% on

expenses

by March 2006

Geography / SEC OBJECTIVES

Reduce overhead cost from ___during 2005-2006 to

: Geography

Reduce unbillable travel costs from ___to _______during 2005-06 : SECs

Reduce Estate administration charges by 10 % I.e.

from. To.: Corporate Administration


22/38

ACTION PLANNING


23/38

Action Planning

Definition of responsibilities for specificresults / Actions

Formulation of action plans- prioritising /sequencing tasks, assigning responsibilityand fixing time targets

Implementation of plans


24/38

MAJOR ACTIVITIES OF

ACTION PLANNING.

Deciding on appropriate strategies for achievingthe objectives.

Assigning responsibility for the achievement ofan objective.

Allocating resources people, materials,facilities, funds etc. required to achieve theobjectives.

Programming the specific activities based on thebest possible alternative for effective use ofallocated resources to achieve agreedobjectives.


25/38

ACTION PLANNING

INVOLVES:

1. Generation of alternative(s)

2. Evaluation of alternatives

3. Selection of the best alternative(s)4. Detailed programming.


26/38

GROUP ACTION PLANNING ON

THE GEOGRAPHY AND SEC

OBJECTIVES

1. After agreement on the objectives ,identify thesub objectives

2. Assign responsibilities for each activity andidentify support roles (contributing Managers)and the support contribution

3. Establish critical relationship among majoractivities

4. Estimate the Time required for each activity

5. Identify resources required for the variousactivities


27/38

BENEFITS OF ACTION PLAN

It identifies accountability for performance

It identifies the nature of support contribution inwork relationship

It validates objectives and increases theconfidence in their feasibility

Ensures selection of the best possible alternative

It identifies potential problem areas

It provides a basis for estimating time and cost

It facilitates planning,mobilsation and allocationof resources

It establishes intermediate milestones

It facilitates delegation of authority


28/38

Foundation of BSC

PERFORMANCE REVIEW


29/38

Performance review

Periodic review and control (takecorrective action)

Annual review of overall performanceReinforcement of desired actions through

Management policies and practices


30/38

Balance Score Card implementation-

PROBLEM AREAS

Lack of clarity in identifying contributions

No reward to Managers who develop theirsubordinates

Managers reluctance to have face to face anddiscomfort in playing god

Managers lack skills for appraisal

Seen as an annual activityAppraiser and appraisee operate from different

frames


31/38

PERFORMANCE REVIEW

FEATURES1. Focus on performance

2. Emphasis on improvement

3. Future Orientation

4. Frequent reviews5. Involvement of self in appraisal

Conditions for Effective Review

Preparation for review Concern for performance

Quality of analysis

Avoid Hand holding and Crucification

Need for Time

FORMAL PERFORMANCE


32/38

FORMAL PERFORMANCE

REVIEWS

Formal Performance Reviews are must:

1.To convey seriousness of BSC

2.Identify reasons for non-achievement3.Modifying / dropping irrelevant

objectives

4.Adding fresh objectives


33/38

IDENTIFICATION OF GEOGRAPHY OR SEC LEVEL

OBJECTIVES

Element : ________________

a) What will be achieved / completedb) Improve from _____ to ______

c) Reduce from ______ to ______

When (Target Date)

1

2

3

4

Whom


34/38

BSC Review

It is the basic spirit of BSC to have regularreview-preferably monthly at each level-therespective Teams which had done the Goal /

Objective settingFor facilitating ease of review and monitoring,

we use an X Matrix

Usually, the essence of the objectives and theaction plan is captured in the X Matrix andeach action plan is supported by a detailedworkout using MS project

HOW INDIVIDUAL OBJECTIVES ARE FORMULATED


35/38

FORMULATION OF GEO / SEC

LEVEL KRA/OBJECTIVES

GROUP MEETING TO IDENTIFYUNIQUE CONTRIBUTION

ROLL DOWN/ROLL UP

PROCESS

PREPARATION INDIVIDUAL

OBJECTIVES


OBJECTIVES


OBJECTIVES


36/38

EXERCISE


37/38

RESPONSIBILTY MATRIX

S.NO GEO / SEC OBJECTIVE ACTION PLAN FORACHIEVING OBJ

TargetDate

PRIMARYRESPONSIBILITY

SUPPORTROLE (WITHIN

ANDOUTSIDEDEPT

REMARKS


38/38

THANK YOU.ALL THE BEST

Documents

Balanced Score Card Implementation