Human Resource

Management
Balanced Score Card

Where it started..
Introduced in 1992 by Drs. Robert Kaplan

(Harvard Business School) and David Norton

as a performance measurement framework

The Balanced Scorecard is the most

commonly used framework for ensuring that

companies execute their strategies

What is Balance
Scorecard?
A Balanced Scorecard monitors the

performance of all or part of an organization,

towards strategic goals
It is used in business, industry, government,

and nonprofit organizations worldwide to align

business activities
It gives a framework and helps planners

identify what should be done and measured

Why Implement a
Balanced Scorecard ?
Increase focus on strategy and results
Align organization strategy with the work people

on day-to-day basis
Improve communication of the organizations

Vision and Strategy

To provide a more reliable basis for awarding

incentive based pay

Why Implement a
balanced Scorecard ?
To give managers a comprehensive view of the

performance of an employee and business

Employee Satisfaction
To survive and prosper in todays world
It provides feedback to both the internal business

processes and external outcomes in order to

continuously improve strategic performance and
results

Four Strategic
Perspectives

Financial
Examines

companys

implementation

and

execution
of its strategy
Three possible stages as described by Kaplan

and Norton
Rapid Growth
Sustain
Harvest

Customer
Customer Satisfaction
Retention
Marketing
Product/Service in the eyes of the customer

Internal Business Process

Metrics based on this perspective allow the

managers to know how well their business is

running
Innovation - Measures how well the company

identifies the customers future needs

Operations Measures quality ,costs,

technology & plant infrastructure

Learning and Growth

Training
Forward Focused
Concerned with

-Human capital
-Information capital
-Organizational capital

Process

Philips
Balanced Score Card

Philips

Philips is world leader in healthcare, lifestyle and

lighting
Philips integrates technologies and design into

people life
Mission :Improve the quality of peoples lives

through timely introduction of meaningful

innovations

Issues
During the mid-90s, Netherlands based Royal Philips

reported losses
Due to rapid changes in the external environment

and growing competition of Asian companies like LG

and Samsung
Led to the Company initiating
High manufacturing costs
Initiating job cuts
Selling unprofitable businesses

Why Balance
Scorecard ?
The initiative to implement the Balanced

Scorecard came from the top management at its

HQ in the Netherlands
Need to shift focus from high-volume business to

high-value business
They realized they had to make operations
Flexible
Innovative

Implementation
This led the Company to introduce a program

called Business Excellence through Speed and

Teamwork (BEST) in July 1999
The Balanced Scorecard was one of the tools of

the BEST
There were four perspectives in Philips' Balanced

Scorecard:
Competence
Processes
Customers
Finance

Implementation
They used Balanced Scorecard strategy across

Philips divisions with more than 1,20,000

employees spread across 150 countries

They established the Critical Success Factors

(CSFs)

Philips used the traffic light system to measure

the level of achievement of the key indicators:

Green light Target that had been met
Amber Performance in line with the
target
Red A problem area

Measuring Results
The Balanced Scorecard was used as an

instrument to
Evaluate actual performance against
targets
Monitor future plans

It enabled employees understand the existing

policies and plans for the future

Achieving revenue growth, employee satisfaction,

customer satisfaction were the common indicators

in all business units

Call center
Balanced Score Card

Unified CallSoft

It is based in Canada, has been providing Call

center and related BPO services since the past

one and a half decade
It has operations in over seventeen countries

includes United States, Eastern Europe, India and

Japan

Issues

Lately it has been confronting difficulties in

tracking and monitoring the performance of the

employee
Managers were unable to decide the reason for

significant dips in progress of employees and in

revenues volume
Need to optimize the service delivery processes

Why Balance
Scorecard ?
Amongst the several options for resolving the

issue the top management used Balanced

Scorecard approach as it was most feasible

Implement a rigorous mechanism of checks across

several delivery centers

Improving the overall productivity and employee

performance

Implementation
A team was created that had members from all

the major divisions to pool in their plausible

causes for the decline being experienced

A criteria was developed for filtering the collected

measures and used to arrive at the most relevant

group of KPIs (Key performance Indicators)

The software chosen was such that it permitted

arranging the scorecards in the form of cascade

Measuring Results
Huge cost savings

Total amount came down by 10%

Employee contribution rose by a 40%

Motivation levels too increased by 60%

Coordination between different delivery centers

was achieved
There was transparency of the system , thus

making it easy to spot the weakest link

Measuring Results

Cleary defined performance metrics supported by

an reward system helps in motivating the work

force in a call center
The managers no longer required to fight with

numbers and values

By using the values presented on scorecards, they

could take quick decision

Zenith

SystEms
Balanced Score Card

Zenith Systems

Zenith is a leading independent IT

infrastructure services provider

It provides services throughout the UK, Europe

and
internationally to more than 80 countries

Issues
Lack of board clarity
Lack of progress
Some occasional disharmony
Need to focus on strategic performance

Implementation
2GC was appointed to assist the Board to create a

Corporate Balanced Scorecard

2GC helps in addressing the strategic and

performance management issues

They worked for 8 months with Executive Board

and Quality manager

The firm had good financial reporting systems in

place

Implementation

2GC worked with two main divisions Client

Services and Business Development

An analysis of how the three Balanced

Scorecards interacted with each other was

shown

Measuring Results

The board agreed on a clear set of strategies

The two divisions established a clear statement
The managers for the first time developed long-term

view of the objective ,the organization was trying to

achieve
Reporting on relevant information back to the centre

Conclusion

Balanced scorecard is a powerful strategic tool

It represents a fundamental change in how an

organization is measured and held

accountable for results
It also poses threats to an established

corporate culture and has potential

weaknesses if it isn't executed properly

THANK YOU