balanced bsc
TRANSCRIPT
-
8/9/2019 Balanced BSC
1/18
Gbemiga Adeosun
-
8/9/2019 Balanced BSC
2/18
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
-
8/9/2019 Balanced BSC
3/18
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
-
8/9/2019 Balanced BSC
4/18
-
8/9/2019 Balanced BSC
5/18
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.
-
8/9/2019 Balanced BSC
6/18
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
-
8/9/2019 Balanced BSC
7/18
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
-
8/9/2019 Balanced BSC
8/18
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
-
8/9/2019 Balanced BSC
9/18
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.
-
8/9/2019 Balanced BSC
10/18
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
-
8/9/2019 Balanced BSC
11/18
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
-
8/9/2019 Balanced BSC
12/18
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
-
8/9/2019 Balanced BSC
13/18
Perspectives
KRA Key Drivers Measurements Standards What Needs to be Done Tools Required Review Time Who
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
Communication, Parenting
Interaction, Improvement in Key
HR Service delivery, Training on
Job Description
Survey Instruments,
SPSS,
Communication Tools
- WWP Link,
Circulars, Intranet, )
BSC, BU Visits,Training, Monthly HR
Meetings
Month ly/Quarterly HHR. DMDs,
HRMs,
HRSM,
CMO,
CTDM,
AOPCM.
CustomerSatisfaction
-
8/9/2019 Balanced BSC
14/18
Perspectives
KRA Key Drivers Measurements Standards What Needs to be Done Tools Required Review Time Who
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,
Induction, Fringes &
Benefits, Leave,
Appraisal, Counselling)
Timeliness & Accuracy
of HR Services; Cycle
time of key processes;
Error rate in Salary/
Benefit Advice
Recruitment Cycle - 2
months, Job Evaluation -
10 working days; Salary
Advice - 1st April; Cycle
time of Pre-employment
Test - 3 days; Post
Training Assessment,
Monthly Circularisation of
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
-
8/9/2019 Balanced BSC
15/18
Perspectives
KRA Key Drivers Measurements Standards What Needs to be Done Tools Required Review Time Who
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, , HR
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
Communication, Parenting
Interaction, Improvement in Key
HR Service delivery, Training on
Job Description
Survey Instruments,
SPSS,
Communication Tools
- WWP Link,
Circulars, Intranet, )
BSC, BU Visits,Training, Monthly HR
Meetings
Month ly/Quarterly HHR. DMDs,
HRMs,
HRSM,
CMO,
CTDM,
AOPCM.
CustomerSatisfaction
-
8/9/2019 Balanced BSC
16/18
Lets discuss challenges we have faced
with BSC implementation in our various
businesses
-
8/9/2019 Balanced BSC
17/18
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
-
8/9/2019 Balanced BSC
18/18
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