Balanced Score Card in HR

8/14/2019 Balanced Score Card in HR

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IntroductionIntroduction

It was originated by Dr. Robert KaplanIt was originated by Dr. Robert Kaplan

(Harvard Business School) and Dr.David(Harvard Business School) and Dr.David

Norton in 1992 as a performance measurementNorton in 1992 as a performance measurement

platform that added strategic non-financialplatform that added strategic non-financial

performance measures to traditional financialperformance measures to traditional financial

metrics to give managers a more 'balanced'metrics to give managers a more 'balanced'

view of organizational performance.view of organizational performance.


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BackgroundBackground

Earlier we focused on Financial measures like:Earlier we focused on Financial measures like: Return on CapitalReturn on Capital Operating IncomeOperating Income Sales GrowthSales Growth Fund FlowsFund Flows Financial StatementsFinancial Statements Balance SheetBalance Sheet Ratios & AnalysisRatios & Analysis


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BackgroundBackground

But we did not lay any emphasis on PerformanceBut we did not lay any emphasis on Performance

measures like:measures like:

CustomersCustomers

SuppliersSuppliers

EmployeesEmployees

Internal ProcessInternal Process Learning & GrowthLearning & Growth


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AdvantagesAdvantages

Balance score card is a system by which weBalance score card is a system by which we

integrate financial measures of pastintegrate financial measures of past

performance and it introduces the driver ofperformance and it introduces the driver of

future performance ie Customers, Process,future performance ie Customers, Process,

Human Resource.Human Resource.


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ImportanceImportance

Gives Competitive Advantage to the OrganizationGives Competitive Advantage to the Organization

Improves Organizational PerformanceImproves Organizational Performance

Performance is documentedPerformance is documented

Increased Focus on Strategies and ResultsIncreased Focus on Strategies and Results

Aligns Organisational strategies with the work peopleAligns Organisational strategies with the work people

do on a day to day basisdo on a day to day basis Improves communication of the Organization VisionImproves communication of the Organization Vision

and Strategiesand Strategies


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How Performance is MeasuredHow Performance is Measured

Vision, Goals, Objectives and Strategies are signaledVision, Goals, Objectives and Strategies are signaled

downwards from top to the bottom in thedownwards from top to the bottom in the

organisation.organisation.

These signals should be clear and should have value.These signals should be clear and should have value. Users should understand the signal and sends itUsers should understand the signal and sends it

further down the organisation.further down the organisation.

The users should be involved in its development.The users should be involved in its development. Feedback and performance report should travel fromFeedback and performance report should travel from

bottom upwards to the top.bottom upwards to the top.


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How Does it Works in HRHow Does it Works in HR

CMD

Managing Director

General Manager

Manager

Supervisor

Vision,

Goals,

Obj

ectiv

e,Strategy

Sha

ring

Mea

surementSystem


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MethodologyMethodologyClarify mission and

vision statements

Financial

Sub Goals

Develop

Strategic goals

DeriveSub Goals

Maps Sub goals to each

quadrants of the

Balanced score card

Mission Vision

Strategic goals

Sub goals

Customer

Sub Goals

Internal Business

Sub goals

Learning & Growth

Sub Goals


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How to use Balanced score cardHow to use Balanced score card

Clarifying and Translating

The Vision and Strategies

Clarifying the vision

Gaining consensus

Strategic Feedback and

Learning

Articulating the shared vision

Obtaining feedback

Strategy review

Communicating and linking

Communicating and educating

Setting goals

Rewards for performance

Planning and setting targets

Setting targets

Strategic initiative alignment

Resource AllocationEstablishing milestones

Balance

Scorecard


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Financial Perspective in HRFinancial Perspective in HR

Strategic ObjectivesStrategic Objectives Objective:-ReduceObjective:-Reduce

HR related costsHR related costs Reduce turnover CostReduce turnover Cost

Reduce absenteeismReduce absenteeism

Reduce workersReduce workers

compensation costcompensation cost

Engage staff to identifyEngage staff to identify

areas of opportunities.areas of opportunities.

MeasuresMeasures Turnover ratesTurnover rates

Absence RateAbsence Rate

Workers compensationWorkers compensationraterate

Lost work day rateLost work day rate


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Internal Perspective in HRInternal Perspective in HR

Strategic ObjectivesStrategic Objectives Objective: ImproveObjective: Improve

employee satisfactionemployee satisfaction

Continue efforts to brandContinue efforts to brandthe organization as thethe organization as the

great place to workgreat place to work

Effective Strategies withinEffective Strategies within

the organisation tothe organisation toimprove satisfaction.improve satisfaction.

MeasuresMeasures Employee OpinionEmployee Opinion

SurveySurvey

Turnover dataTurnover data Identify new process ofIdentify new process of

growth and developmentgrowth and development

of the organisationof the organisation


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Customer Perspective in HRCustomer Perspective in HR

Strategic ObjectivesStrategic Objectives Objective: ImproveObjective: Improve

Customer satisfactionCustomer satisfaction

Define Customer ServiceDefine Customer Service Validate customersValidate customers

expectationsexpectations

Enhance service standardsEnhance service standards

Evaluate results fromEvaluate results fromSurveySurvey

MeasuresMeasures Customers satisfactionCustomers satisfaction

Retention of CustomersRetention of Customers

Acquisition of newAcquisition of newcustomerscustomers

Profitability of the theProfitability of the the

organisationorganisation


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Learning and Growth Perspective inLearning and Growth Perspective in

HRHR Strategic ObjectivesStrategic Objectives Objective: ImprovingObjective: Improving

HR personnelHR personnel

knowledge & skills inknowledge & skills inkey areaskey areas Identify skillsIdentify skills Measure gapsMeasure gaps

Develop learning toolsDevelop learning toolsand plansand plans

Develop trainingDevelop trainingProgramsPrograms

MeasuresMeasures HR skills learning planHR skills learning plan

completecomplete

Courses conductedCourses conducted

Validate HR competencyValidate HR competencylevellevel

Enhancing IT andEnhancing IT andsystemssystems


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SummarySummary

Balance scorecard is a tool which tells us theBalance scorecard is a tool which tells us the

knowledge, skills and systems that employeesknowledge, skills and systems that employees

will need (will need (Learning & growthLearning & growth) to innovate) to innovate

build and adopt the right strategic capabilitiesbuild and adopt the right strategic capabilities

and efficiencies (and efficiencies (Internal processInternal process) that delivers) that delivers

desired value to the market (desired value to the market (CustomerCustomer) which) which

will eventually lead to the accumulation ofwill eventually lead to the accumulation ofshareholder value (Fshareholder value (Financialinancial))


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Thank youThank you

Documents

Balanced Score Card in HR