BALANCED

SCORECARDS
Human Resource Management
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Balanced Scorecards
Translates mission and strategy into objectives
and measures
Organized into four different perspectives:
Financial
Customer
Internal Business Process
Learning and Growth
Balanced Scorecards
Provides a framework to communicate mission
and strategy
Uses measurements to inform employees
about drivers of current and future success
Evaluates performance & measures smaller-
scale operational activities
The History of Balanced
Scorecard
The first balanced scorecard.
1990 Nolan Norton Institute study
The word balanced means?
Why Use a Balanced Scorecard?
A comprehensive view about the overall organization
performance
A guidance for management & staff to determine the critical
success factors and performance indicators
A tool to help in making strategic review or analysis according
to the organizational capabilities and performance
Focuses the whole organization on the few key things
needed to create advance performance
Integrating and expressing the performance and efforts from
the lowest levels in the organization to achieve excellent
overall performance

Major aspects of balanced
scorecard
Financial perspective
Customer perspective
Internal process perspective
Learning and growth
Major aspects of balanced
scorecard
Measures the companys success in
implementing financial strategies:
Operating income
Net Income
ROA, ROI, ROE
Cash inflow & cash outflows
Banks consolidations
Sales growth
Revenue and inventory turnover
Account payable and accounts
receivable
Define the market segment and
target
Identify the efficiency to operate in its
market
Answer the following questions:
Is the company complying with the
customers' needs& wants?
Is the company achieving the planned
market share?
Is the company satisfying its
customers?
Financial Perspective Costumer Perspective
Major aspects of balanced
scorecard
Innovation process
Operations process.
Considers the support
background that allow the
company to keep the
innovation & development
process
Measures performance in
both the operational &
development sides
Position out the availability of
infrastructure within an
organization.
Contains 3 key factors
The people
The systems
The organizational procedures
A way to find discrepancy
between the 3 key factors and
develop effective tools to
minimize the variances to
improve the business
Internal Process Perspective Learning and Growth
Balanced Scorecard Implementation
Plan
The balanced scorecard is not a template, which
can be transposed from one company to another.
A company's measures should relate directly to
their competitive advantage. Therefore, not easily
shared with others.
The leadership of a company must believe that
the Balanced Scorecard is appropriate for the
organization to achieve their strategic objectives.
Balanced Scorecard Implementation
Plan
Preparation
First Round Interviews
First Executive Workshop
Second Round Interviews
Second Workshop
Third Round Executive Workshop
Implementation
Periodic Reviews
Balanced Scorecard Implementation
Plan
Success
=
Measurement Technique Control
Focused Persistence Consensus
Keeping in mind these factors when implementing the balanced scorecard will substantially increase your chances of success.
Though every factor in the equation above does not have to be perfect, and can compensate for one another, all must be present
to some extent for BSC to be implemented.


Succe
ss
Balanced Scorecard Implementation
Plan
Measurement
Success is a function of what Measures you use.
Techniques
Techniques or methods have a significant bearing on
success:
Techniques fall into two categories:
Large-scale, or major techniques
Small-scale, or minor techniques
Balanced Scorecard Implementation
Plan
Control
Once management has brainstormed a list of possible
actions that might accomplish its target, these actions need
to be categorized into four levels:
Level 1 action: in control of action and effects are inside your
organization
Level 2 action: in control of action, but effects are outside your
organization
Level 3 action: not in control of action, but it affects your driver
Level 4 action: not in control of action, but does not affect your
driver
Balanced Scorecard Implementation
Plan
Focused Persistence
Otherwise known as project management
Consensus
Key power brokers
Gantt Chart PERT Chart
Balanced Scorecard Implementation
Plan
Focused Persistence
Otherwise known as project management
Consensus
Key power brokers
What is a KPI?

KPIs are essentially a performance
management tool that helps a company to
track and measure factors that contribute to its
success over time
KPIs Targets Objectives Strategy
Thinking Doing
History of KPIs
Price 1908: US$950 Price 1927: US$250
SMART is often used to describe
KPIs
Specific
Measurable
Achievable
Relevant
Time
SMART is often used to describe
KPIs
Specific
Focus on the
behavior itself,
rather than
personality attributes
such as 'attitude to
customers'.
Measurable
Provide employees
with ongoing
feedback on their
standard of
performance.
SMART is often used to describe
KPIs
Achievable
Must be seen as
attainable and
achievable.
Relevant
It is essential that
employees clearly
understand the KPIs.
Timely
KPIs should have an
appropriate
timeframe.
Balanced Scorecard vs. KPI
Both refer to the business performance
management.
We can think about KPI as a part of Balanced
Scorecard. Balanced Scorecard measures
business using several (usually 4 or 5) basic
groups. Each group has indicators inside.
Balanced Scorecard vs. KPI
Scorecard for HR will include various
viewpoints on HR process, including financial
aspect, management and educational aspects.
All Balanced Scorecard groups will include
several indicators that will help to measure
business. HR KPI will focus only on some
certain aspects of HR.
HR BSC Strategic Objectives and
Performance Measures
Customer Perspective: Improve Customer
Satisfaction
Financial Perspective
Internal Perspective
Learning and Growth Perspective
HR BSC Strategic Objectives and
Performance Measures
Customer Perspective: Improve Customer
Satisfaction
Here we need to study actions related to what
customers need and work hard to meet and exceed
their expectations as they are the cornerstone for any
company success.
After we study these actions we need to check if we
have achieved those needs through some measures
like what actions have been accomplished and what
products, services, and values have been delivered to
our customers
HR BSC Strategic Objectives and
Performance Measures
Financial Perspective
Reduce Certain HR Related Costs
Enhance the value and return on HR investment
HR BSC Strategic Objectives and
Performance Measures
Internal Perspective
Improve employee
satisfaction
Improve employee
commitment
Strengthen Rewards &
Recognition Program
Strengthen recruiting &
hiring of the right person,
in the right job at the right
time
Workforce Planning

Succession Planning
Enhance information &
data availability
A diverse workforce
Reduce risk related to non-
compliance with laws,
policies and labor
contracts
Enhance HR staff
accountability
HR BSC Strategic Objectives and
Performance Measures
Learning Growth perspective:
Enhance HR Staff knowledge & skills in strategic
areas
Create, model performance management &
communication best practices in HR
Criticisms of Balanced Scorecard
The scores are not based on any proven economic or
financial theory, and therefore have no basis in the decision
sciences.
Balanced Scorecard does not provide a bottom line score or
a unified view with clear recommendations: it is simply a list
of metrics.
Positive feedback from users of Balanced Scorecards may be
due to a placebo effect
Balanced Scorecard Approach does not easily apply to the
public sector
Balanced Scorecard Consulting
Services
Choosing a consulting partner is one of the most
difficult choices you'll face when embarking on a
Balanced Scorecard implementation
Many years of consulting and practitioner
experience along with in-depth Balanced
Scorecard knowledge will help you find the best
consulting company along with the expertise you
need to develop a performance management
system that ensures you effectively execute your
unique strategy