balanced bsc

8/9/2019 Balanced BSC

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Gbemiga Adeosun


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The balanced Scorecard is a strategic planning andmanagement system used to align business activities tothe vision statement of an organization or morerealistically it attempts to translate the sometimesvague, pious hopes of a companys vision/missionstatement into the practicalities of managing thebusiness at every level

A balanced scorecard is a system that balances thehistorical accuracy of financial numbers with the drivers

of future performance It is a performance management system that translates

organizational strategy into actions


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The balanced scorecard retains traditional financial measures.But financial measures tell the story of past events, anadequate story for industrial age companies for whichinvestments in long-term capabilities and customer relationshipswere not critical for success. These financial measures are

inadequate, however, for guiding and evaluating the journey thatinformation age companies must make to create future valuethrough investment in customers, suppliers, employees,processes, technology, and innovation.

Source: Robert S Kaplan and David P. Norton, Using theBalanced Scorecard as a Strategic Management System,

Harvard Business Review (Jan-Feb 1996)

You can't tell when you're winning if you don't keep score. TheBalanced Scorecard helps track your hits and misses.

Eric Berkam


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Perspectives: Four top-down perspectives on enterpriseperformance (Financial, Internal Business Process,Innovation & Learning, Customer)

Goals (Strategic Objectives) - strategic vision andbusiness objectives of the organization/department. What

the company needs to do to accomplish its strategy; Key Result Areas (Metrics) - Which areas do you wish to

see results in? Actionable and tangible measurementswhich support achieving objectives; this is what makes itreal.

Key Performance Indicators (Objectives) - How do wemeasure success? one guideline is to have up to sixteenmeasurable objectives.

Performance Standards (Targets)- What is the idealperformance goal? Performance level expectations setagainst the strategic plan. For each metric, set a goal orplan so progress against the objective can be evaluated.


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When choosing measures in this perspective,the organization must answer two criticalquestions

Who are our target customers? What is our value proposition in serving them?

Many of the organizations will choose one of the3 disciplines : Operational Excellence, ProductLeadership, Customer Intimacy

Irrespective of the discipline chosen, this

perspective will normlly include such measuresas: Customer satisfaction, Customer Loyalty,Market Share, Customer retention etc


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The measures here are the enablers for theother three perspectives.

Once measures in the customer and internalbusiness perspectives are identified, one can becertain of discovering some gaps between thecurrent organizational infrastructure ofemployee skills and information systems and thelevel necessary to achieve desired results.

The measures here will help close the gap and

ensure sustainable performance for the futuree. Employee Skills, Availability of information,alignment to values etc


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The measures here tell whether the strategy executionwhich is detailed through the measures chosen in the otherperspectives is leading to improved bottom line results

All energy and capabilities could be focused on improvingcustomer satisfaction, quality, on-time delivery etc butwithout an indication of their effect on the organizationsfinancial results, they are of limited value

Timely and accurate funding data will always be a priority,and managers will do whatever necessary to provide it

Some likely measures include Revenue growth, profitability,Return on investment etc


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Encourages innovation Expands business units objectives beyond financial measures Enhances internal capabilities, investment in people, systems and

procedures to improve future performance Captures critical value-creation activities Clearly reveals the value drivers for superior long-term financial

and competitive performance Serves as a long term strategic management system Focuses the whole organization on the few key things needed to

create breakthrough performance. Helps to integrate various corporate programs, such as quality,re-engineering, and customer service initiatives.

Breaks down strategic measures to local levels so that unitmanagers, operators, and employees can see what's required attheir level to roll into excellent performance overall.


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Key Result Areas Key Performance Indicators Threshold Normal StretchActual

Achieved

2004

Trend

2003

TrendWeightings Rating

0

Innovation&

LearningDimens

Notes:

Cus

tomerDimens

Goal

BusinessProces

Dimension

Section 1: The Balanced Scorecard (2010)

0

0

0

0

Financial

Dimension


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Section 2: *Implementation Plan

BSC Perspective

KRA

Key Drivers

Measurements

Standards

Definition

Description/What Needs

to be Done

Tools RequiredSource of Information

Owner

Frequency/Review Time

Other Condiderations

Customer Satisfaction


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Perspectives

KRA Key Drivers Measurements Standards What Needs to be Done Tools Required Review Time Who

Turnover Employee Productivity NPS/Employee No. > Growth over last year,

BU/Peer Bench mark

Right Sizing, Training &

Development, Counselling &

Mentoring, Provision of Tools,

Incentives - Recognition &

Reward, Obtain Industry

Statistics for Benchmark; Work

scheduling, Performance Status

Communication.

Set and agree

Optimal Manning

Level, Training

Curriculum, Monthly

HR reviews, SHRP

reviews, Meeting

BSC Reviews

Month ly/ Quarterly HHR. DMDs,

HRMs,

HRSM,

CMO,

CTDM,

AOPCM.

Profitability Employee Productivity Operating

profit/Employee No.

> Growth over last year,

BU/Peer Bench mark

Control of HR Cost, Outsourcing,

Performance Related

Compensation,

Set and agree

Optimal Manning

Level, Training

Curriculum - (Profit

Orientation), Monthly

HR reviews, SHRP

reviews, Meeting

BSC Reviews

Weekly/Monthly/

Quarterly

HHR. DMDs,

HRMs,

HRSM,

CMO,

CTDM,

AOPCM.

FinancialDimension


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Perspectives


Employee

Satisfaction

Improved

Communications, Work

Environment,

Compensation,

Recognition & Reward,

Target Setting, HR

Admin/Process

Efficiency, Coaching &Mentoring, Induction

Survey Feedback,

Quality of Key HR

Processes (Salary,

Induction, Fringes &

Benefits, Leave,

Appraisal ), Integrity of

BSC Targets,

Improvement on

Previous Survey, Prompt

Salary Advise,

Comprehensive

Induction,

Communication of

Fringes & Benefits,

Leave Rostering,Timeliness of Appraisal

Conduct surveys and

benchmarks, Incentives

schemes, Prompt

Communication, Parenting

Interaction, Coaching, Mentoring

Survey Instruments,

SPSS,

Communication Tools

- WWP Link,

Circulars, Intranet, )

BSC, BU Visits,

Monthly HR Meetings

Month ly/Quarterly HHR. DMDs,

HRMs,

HRSM,

CMO,

CTDM,

AOPCM.

BU

Satisfaction

Improved

Communications, , H R

Admin/Process

Efficiency, Training

Survey Feedback,

Quality of Key HR

Processes, Integrity of

BSC Targets,

Recruitment Cycle - 2

months, Job Evaluation -

10 working days; Salary

Advice - 1st April; Cycle

time of Pre-employment

Test - 3 days; PostTraining Assessment,

Monthly Circularisation of

Management Moves,

Conduct surveys and

benchmarks, Prompt


Interaction, Improvement in Key

HR Service delivery, Training on

Job Description

Survey Instruments,

SPSS,

Communication Tools

- WWP Link,


BSC, BU Visits,Training, Monthly HR

Meetings


HRMs,

HRSM,

CMO,

CTDM,

AOPCM.

CustomerSatisfaction


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Perspectives


Right Sizing Review of strategy &

structure; Work

Process;

Span of Control;

Manager/Employee

Ratio; NPS/Employee;

Benchmark Work

Processes against

competition;

International/ BU/

Industry specific

Review structure of Bus and

employee numbers, align with

current operation; Review current

employee yield against target;

clean redundant processes from

work systems;

Strategy; LTP; SHRP;

Systems Audit; List of

Processes; Systems

/Work Study;

Bi-annual; HRMS, HHR,

AOPCM,

DMDs,

EXCO; CMO

EmployeeCost

Medical Cost; TravelCost; Salaries;

Employee No.;

Overtime

Medical cost per capita;travel cost/man power

cost; Employee

cost/NPS; Cost per

Employee; Employee

cost/Total Cost;

Benchmark againstindustry; Peer ranking;

Collate cost from all Bus; Reviewretainerships; Firm control on

medical administration; Intensify

preventive health care;

Circularise approved transport

fares; monitor

movements/travels; Moderate

rate of transfers; Maintain cap on

overtime

Policy onRetainership; Health

promotion

programmes;

schedule of approved

transport rates;

Monthly/Quarterly CMO;HRMS, HHR,

AOPCM,

DMDs,

EXCO;

Process

Review

Review of Key HR

Processes

(Recruitment, Salary

Advice, Job Ev aluation,

Appraisal, Medical

Administration, Value

Added Training,

Communication,


Benefits, Leave,

Appraisal, Counselling)

Timeliness & Accuracy

of HR Services; Cycle

time of key processes;

Error rate in Salary/

Benefit Advice






Test - 3 days; Post

Training Assessment,


Management Moves; 4%

Error Margin;

Improve Response Time to BU

requests; Refresher courses for

HR practitioners; Thoroughness

& Review of Benefit

Communication; Finalise Process

Documentation

Process Manual;

Training;

Quarterly HHR. DMDs,

EXCO,

HRMs,

HRSM,

CMO,

CTDM,

AOPCM.

InternalBusinessProcess


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Perspectives


Employee

Satisfaction

Improved

Communications, Work

Environment,

Compensation,

Recognition & Reward,

Target Setting, HR

Admin/Process

Efficiency, Coaching &Mentoring, Induction

Survey Feedback,

Quality of Key HR

Processes (Salary,


Benefits, Leave,

Appraisal ), Integrity of

BSC Targets,

Improvement on

Previous Survey, Prompt

Salary Advise,

Comprehensive

Induction,

Communication of

Fringes & Benefits,

Leave Rostering,Timeliness of Appraisal

Conduct surveys and

benchmarks, Incentives

schemes, Prompt


Interaction, Coaching, Mentoring

Survey Instruments,

SPSS,

Communication Tools

- WWP Link,


BSC, BU Visits,

Monthly HR Meetings


HRMs,

HRSM,

CMO,

CTDM,

AOPCM.

BU

Satisfaction

Improved

Communications, , HR

Admin/Process

Efficiency, Training

Survey Feedback,

Quality of Key HR

Processes, Integrity of

BSC Targets,






Test - 3 days; PostTraining Assessment,


Management Moves,

Conduct surveys and

benchmarks, Prompt


Interaction, Improvement in Key

HR Service delivery, Training on

Job Description

Survey Instruments,

SPSS,

Communication Tools

- WWP Link,


BSC, BU Visits,Training, Monthly HR

Meetings


HRMs,

HRSM,

CMO,

CTDM,

AOPCM.

CustomerSatisfaction


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Lets discuss challenges we have faced

with BSC implementation in our various

businesses


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Lack of Understanding: Many employees especiallythose in remote locations are yet tounderstand/appreciate BSC ; planning, cascading,information gathering, arriving at metrics,performance appraisal etc

Subjectivity: Non validation of BSCs by lineManagers leaving BSC holders to fix actualachieved (Still seen as payment time)

Ambiguity: Some KPIs not explicit as a result oflack of knowledge

No regular review of performance/set targets BSC holders not taking ownership Changes in Market place not communicated to GHR No seriousness on the part of BSC holders e.g in

submission


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Top Management and other Managers to believe/support use of BSCs

Regular Sessions on BSC (present situation), Personal updating ofknowledge through studying etc

BUs to resuscitate BSC committee in the various units

Quarterly or otherwise review of BSCs to be carried out in all Bus

Line Managers to review direct reportees BSCs Early submission of BSCs to P&C unit for validation (why submit

initially?)

BSC holders to be sincere during appraisals and back up achievementwith documented data and information

Employees to periodically monitor/measure performance

Very many companies that have implemented the BSC have recordeddramatic positive Financial gains,

WE MUST GET IT RIGHT. INTEGRITY REQUIRED

balanced bsc

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