Balanced Scorecard & HR ScoreCard Balanced Score
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Balanced Scorecard HR ScoreCard Balanced Score Card The Balanced Scorecard is a Strategic Planning and Management System that is used in business industry, government, and nonprofit organizations worldwide to align business activities
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01
Balanced Scorecard
&
HR ScoreCard<br>
&
HR ScoreCard<br>
02
Balanced Score Card The Balanced Scorecard is a Strategic Planning and Management System that is used in business & industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization.
It was originated by Drs. Robert Kaplan and David Norton as a performance measurement framework that added strategic non-financial performance measures to traditional financial metrics to give managers and executives a more 'balanced' view of organizational performance.<br>
It was originated by Drs. Robert Kaplan and David Norton as a performance measurement framework that added strategic non-financial performance measures to traditional financial metrics to give managers and executives a more 'balanced' view of organizational performance.<br>
03
Cntd. The Balanced Scorecard was found to be the sixth most widely used management tool across the globe which also had one of the highest overall satisfaction ratings.
In its simplest form the Balanced Scorecard breaks performance monitoring into four interconnected perspectives: Financial, Customer, Internal Processes and Learning & Growth.<br>
In its simplest form the Balanced Scorecard breaks performance monitoring into four interconnected perspectives: Financial, Customer, Internal Processes and Learning & Growth.<br>
04
Balanced Scorecard Perspectives The Financial Perspective covers the financial objectives of an organisation and allows managers to track financial success and shareholder value
The Customer Perspective covers the customer objectives such as customer satisfaction, market share goals as well as product and service attributes.
The Internal Process Perspective covers internal operational goals and outlines the key processes necessary to deliver the customer objectives.
The Learning and Growth Perspective covers the intangible drivers of future success such as human capital, organisational capital and information capital including skills, training, organisational culture, leadership, systems and databases.<br>
The Customer Perspective covers the customer objectives such as customer satisfaction, market share goals as well as product and service attributes.
The Internal Process Perspective covers internal operational goals and outlines the key processes necessary to deliver the customer objectives.
The Learning and Growth Perspective covers the intangible drivers of future success such as human capital, organisational capital and information capital including skills, training, organisational culture, leadership, systems and databases.<br>
05
Designing of BSC This is illustrated well by the four steps required to design a balanced scorecard:
Translating the vision into operational goals;
Communicating the vision and link it to individual performance
Business planning
Feedback and learning, and adjusting the strategy accordingly.<br>
Translating the vision into operational goals;
Communicating the vision and link it to individual performance
Business planning
Feedback and learning, and adjusting the strategy accordingly.<br>
06
Considerations To embark on the Balanced Scorecard path an organization first must know (and understand) the following:
The company's mission statement
The company's strategic plan/vision
The financial status of the organization
How the organization is currently structured and operating
The level of expertise of their employees
Customer satisfaction level<br>
The company's mission statement
The company's strategic plan/vision
The financial status of the organization
How the organization is currently structured and operating
The level of expertise of their employees
Customer satisfaction level<br>
07
Balanced Scorecard implementation Implementing the Balanced Scorecard system company-wide should be the key to the successful realisation of the strategic plan/vision.
A Balanced Scorecard should result in:
Improved processes
Motivated/educated employees
Enhanced information systems
Monitored progress
Greater customer satisfaction
Increased financial usage<br>
A Balanced Scorecard should result in:
Improved processes
Motivated/educated employees
Enhanced information systems
Monitored progress
Greater customer satisfaction
Increased financial usage<br>
08
How many companies use the Balanced Scorecard? More than half of major companies in the US, Europe and Asia are using Balanced Scorecard approaches.
Balanced Scorecard is one of the top-ten most widely used management tools around the world.
The widest use of the BSC approach has traditionally been in the US, the UK and Northern Europe, but there is very strong growth in Balanced Scorecard adoption in South America, the Middle East and Asia.<br>
Balanced Scorecard is one of the top-ten most widely used management tools around the world.
The widest use of the BSC approach has traditionally been in the US, the UK and Northern Europe, but there is very strong growth in Balanced Scorecard adoption in South America, the Middle East and Asia.<br>
09
Key Benefits of Balanced Scorecards Better Strategic Planning –The business model is visualised in a Strategy Map which forces managers to think about cause-and-effect relationships.
Improved Strategy Communication & Execution – The fact that the strategy with all its interrelated objectives is mapped on one piece of paper allows companies to easily communicate strategy internally and externally.<br>
Improved Strategy Communication & Execution – The fact that the strategy with all its interrelated objectives is mapped on one piece of paper allows companies to easily communicate strategy internally and externally.<br>
10
Cntd. Better Management Information: BSC approach tend to report higher quality management information and gain increasing benefits from the way this information is used to guide management and decision making.
Improved Performance Reporting – companies using a Balanced Scorecard approach tend to produce better performance reports than organisations without such a structured approach to performance management.<br>
Improved Performance Reporting – companies using a Balanced Scorecard approach tend to produce better performance reports than organisations without such a structured approach to performance management.<br>
11
Cntd. Better Strategic Alignment: . In order to execute a plan well, organisations need to ensure that all business and support units are working towards the same goals.
Better Organisational Alignment: – well implemented Balanced Scorecards also help to align organisational processes such as budgeting, risk management and analytics with the strategic priorities.<br>
Better Organisational Alignment: – well implemented Balanced Scorecards also help to align organisational processes such as budgeting, risk management and analytics with the strategic priorities.<br>
12
The HR scorecard - should be looked at as a strategic asset It 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 revolutionize the way business perceives HR.<br>
It is based on the Balanced Scorecard framework developed by Kaplan and Norton and is set to revolutionize the way business perceives HR.<br>
13
HR Score Card A scorecard for HR provides management a set of metrics with which to benchmark performance of an HR department and to show its value as a whole. The scorecard helps to present an HR department as a strategic asset and establish it as a partner in the organization.
It also provides a basis for defining what functions the HR department does and does not do, as well as provide cost savings by optimizing solutions and balancing duties within the department. Having a measurement system in place helps an organization to define HR strategically and organizationally.<br>
It also provides a basis for defining what functions the HR department does and does not do, as well as provide cost savings by optimizing solutions and balancing duties within the department. Having a measurement system in place helps an organization to define HR strategically and organizationally.<br>
14
Economic paradigm - speed, innovation, quality and customer satisfaction
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 organizations
Human capital is an intangible asset and HR’s influence on firm performance is difficult to measure<br>
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 organizations
Human capital is an intangible asset and HR’s influence on firm performance is difficult to measure<br>
15
The standard elements of a firm’s resource architecture that are measured include total compensation, employee turnover, cost per hire, and percentage of employee satisfaction etc.<br>
16
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
managers tend to avoid dealing with intangible assets as far as possible
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<br>
managers tend to avoid dealing with intangible assets as far as possible
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<br>
17
Solution 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 able to link HR functions, activity and investment with the overall business strategy<br>
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What is HR Score Card Strategic HR Performance Drivers HR SCORECARD
HR’s “internal” efficiency and effectiveness<br>
HR’s “internal” efficiency and effectiveness<br>
19
Steps to develop HR Scorecard There are seven steps required to develop HR score card , so that the result are statistically measure-
Define business strategy
Outline company value chain
Identify business required organizational outcomes strategy
Identify required workforce
Identify relevant HR system
Design of HR score card for measurement purpose<br>
Define business strategy
Outline company value chain
Identify business required organizational outcomes strategy
Identify required workforce
Identify relevant HR system
Design of HR score card for measurement purpose<br>
20
Cntd. You can’t achieve this type of strategic alignment
and performance improvement without:
Fully understanding how value is created in your business
Then designing a measurement system based
on that story.<br>
and performance improvement without:
Fully understanding how value is created in your business
Then designing a measurement system based
on that story.<br>
21
High Performance Work System HR System Alignment HR Deliverables HR Efficiency Strategic Objective HR Value Chain<br>
22
Structure of HR ScoreCard Financial Outcome Perspective : HR Deliverables
1. Skills
2. Motivation
3. Work Environment HR Efficiency
Relative Cost
Timeliness<br>
1. Skills
2. Motivation
3. Work Environment HR Efficiency
Relative Cost
Timeliness<br>
23
Customer Perspective : HR Alignment
Internal alignment (Fit) among HR Mgt practices
2. External alignment (Fit) with line manager’s strategic goals<br>
Internal alignment (Fit) among HR Mgt practices
2. External alignment (Fit) with line manager’s strategic goals<br>
24
Internal Business Perspective : High performance work system :
1. Selection and promotion linked to competency model
2. Development and promotion linked to needs of business
3. Performance Management and compensation systems to attract and select and motivate employees<br>
1. Selection and promotion linked to competency model
2. Development and promotion linked to needs of business
3. Performance Management and compensation systems to attract and select and motivate employees<br>
25
Learning and Growth HR Manager Competencies:
1. Personal Credibility
2. Change Management
3. Culture Management
4. Delivery of HR Basics
5.Knowledge of the business
Strategic performance management<br>
1. Personal Credibility
2. Change Management
3. Culture Management
4. Delivery of HR Basics
5.Knowledge of the business
Strategic performance management<br>
26
High Performance Work System The HR policies, processes and practices
Each element is designed to maximize the overall
quality of human capital throughout the organisation
Focused on implementing strategy through the HR
Deliverables
Typical elements are:
Appraisal process
Recruitment
Incentive rewards and recognition
Training and development
Employee communication and feedback system<br>
Each element is designed to maximize the overall
quality of human capital throughout the organisation
Focused on implementing strategy through the HR
Deliverables
Typical elements are:
Appraisal process
Recruitment
Incentive rewards and recognition
Training and development
Employee communication and feedback system<br>
27
HR System Alignment Two perspectives:
Alignment between the HR system that produces
the HR deliverables and the organisation’s strategic implementation system
Alignment between the expectations of the HR
function and the individual competences
required to deliver<br>
Alignment between the HR system that produces
the HR deliverables and the organisation’s strategic implementation system
Alignment between the expectations of the HR
function and the individual competences
required to deliver<br>
28
HR Deliverables It means by which the HR system generates value in your organisation
The points of intersection between the organisation’s strategic implementation plan and HR
The drivers of future performance – lead measures
The HR enablers that reinforce the core performance drivers<br>
The points of intersection between the organisation’s strategic implementation plan and HR
The drivers of future performance – lead measures
The HR enablers that reinforce the core performance drivers<br>
29
HR Efficiency Consider two aspects:
Core efficiency measures that make no direct
contribution to the organisation’s strategy
implementation
Strategic efficiency measures that assess the HR activities and process design to produce the HR deliverables<br>
Core efficiency measures that make no direct
contribution to the organisation’s strategy
implementation
Strategic efficiency measures that assess the HR activities and process design to produce the HR deliverables<br>
30
Examples Strategic Objective
Lower R&D
HR Deliverables
Ensure R&D employees have require technical competencies
Low staff turnover amongst high-performing R&D specialists
HR Efficiency
Minimise recruitment costs<br>
Lower R&D
HR Deliverables
Ensure R&D employees have require technical competencies
Low staff turnover amongst high-performing R&D specialists
HR Efficiency
Minimise recruitment costs<br>
31
Cntd. HR System Alignment:
Internal & external selection process based on competency model
Recruitment process to ensure high-quality recruits
Retention policies developed and Implemented
High Performance Work System:
Establish competency model as basis for recruiting, managing and rewarding R&D employees
Extend appraisals to provide 360
Establish career development process<br>
Internal & external selection process based on competency model
Recruitment process to ensure high-quality recruits
Retention policies developed and Implemented
High Performance Work System:
Establish competency model as basis for recruiting, managing and rewarding R&D employees
Extend appraisals to provide 360
Establish career development process<br>
32
Functional HR Scorecard Strategic
Talent
Capability
Performance Based Culture
Organisational Integration
Leadership
Internal Process
Align HR planning with Business Strategy
Provide proactive workforce solutions
Develop and enhance world-class programmes
Optimise service delivery through streamlined processes<br>
Talent
Capability
Performance Based Culture
Organisational Integration
Leadership
Internal Process
Align HR planning with Business Strategy
Provide proactive workforce solutions
Develop and enhance world-class programmes
Optimise service delivery through streamlined processes<br>
33
Contd. Financial
Contribute to share holder value
Maximize human Capital
Minimize HR Costs
Customer
Business Partner (Strategic Support)
Organisational Health and Competitive Capability
Skills, competencies and leadership
Low cost provider<br>
Contribute to share holder value
Maximize human Capital
Minimize HR Costs
Customer
Business Partner (Strategic Support)
Organisational Health and Competitive Capability
Skills, competencies and leadership
Low cost provider<br>
34
PERSPECTIVE<br>
35
THANKYOU<br>