balance score card pv

8/7/2019 Balance Score Card pv

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BACKGROUND

Earlier we focused on Financial measures like:

Return on Capital

Operating Income Sales Growth

Fund Flows

Financial Statements

Balance sheet

Ratios & Analysis


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BACKGROUND

But we did not lay any emphasis on Performance

measures like:

Customers Suppliers

Employees

Internal Process

Learning & Growth


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WHY TO BALANCED SCORE CARD?

Important to have a plan, set goals, and measure

your success

Having a plan is more important than the specifictool you use

Holistic approach that extends beyond financial

measures and incorporates other priorities

Linking strategic institutional plans and priorities


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BALANCED SCORECARD OBJECTIVES

Consistently deliver superb customer

experience

Optimize resource utilization and beaccountable and financial stewards

Achieve operational excellence in our

internal processes

Our organization must consistently strive for

learning and growth


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IMPORTANCE

Gives Competitive Advantage to theOrganization

Improves Organizational Performance

Performance is documented Increased Focuson Strategies and Results

Aligns Organisational strategies with the work

people do on a day to day basis Improves communication of the Organization

Vision and Strategies


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HOW PERFORMANCE IS MEASURED?

Vision, Goals, Objectives and Strategies are signalled

downwards from top to the bottom in the organisation.

These signals should be clear and should have value. Users should understand the signal and sends it further

down the organisation.

The users should be involved in its development.Feedback and performance report should travel from

bottom upwards to the top.


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BALANCED SCORE CARD

ABalanced Scorecard is a framework that

focuses on shareholder,customer, internaland

learningrequirements ofa business inorder to

createa systemoflinked objectives,measures,targets and initiatives which collectively describe

the strategy ofanorganizationand how that

strategy can beachieved.

BSC is a tool toconvert a strategy intoaction


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BALANCED SCORE CARD FRAME


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B S C PERSPECTIVE

Financial Perspective in HR

Traditional need for financial data

Processing can be centralized and automated

Additional financial-related data, such as risk

assessment and cost-benefit data.

Objective reduce HR related cost:: measure ::

Reduce turnover Cost # turn over rate

Engage staff to identify # absenteeism rate

areas of opportunities.

Reduce absenteeism. # Worker compensation rate Reduce workers

compensation cost # lost work day rate


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CUSTOMER PERSPECTIVE::

Customer focus

Customer satisfaction Changing customer demands and needs.

Strategic Objectives

Objective: Improve

Customer satisfactionDefine Customer Service..

Validate customers

Expectations.

Enhance service standards.

Evaluate results from

Survey.

Measures

Customers satisfaction

Retention of Customers.

Acquisition of new

Customers.

Profitability of the the

Organisation.


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INTERNAL PROCESS PERSPECTIVE::

Internal business processes

How well are processes running?


Objective:

Improve employeesatisfaction

Continue efforts to brand

the organization as the

great place to work

Effective Strategies within

the organisation to

Measures

Employee Opinion

Survey.

Turnover data.

Identify new process of

growth and development

of the organisation


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INNOVATION & LEARNING PERSPECTIVE

Employee training

Individual and institutional improvement Continuous learning mode

Focusing training funds on results

Learning' is more than 'training'


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Objective: Improving

HR personnel

knowledge & skills in

key areas

Identify skillsMeasure gaps

Develop learning tools

and plans

Develop training

Programs

Measures

HR skills learning plan

complete

Courses conducted

Validate HR competency

level

Enhancing IT and

systems


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TREE OF B S C


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Planning Principles

Link strategic planning to mission

Improve communication Establish mutual accountability and responsibility

Provide programs and services that add value and

minimize bureaucracy

Solve problems proactively

What gets measured gets done


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ADVANTAGES OF BALANCED SCORE

CARD

It translates vision and strategy into action.

It defines the strategic linkages to integrate

performance across organizations.

It communicates the objectives and measures to abusiness unit.

It aligns the strategic initiatives in order to attain

the long-term goals.

It aligns everyone within an organization so that allemployees understand how they support thestrategy.


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CONTINUED..

It provides a basis for compensation for performance.

The scorecard provides a feedback to the senior management if

the strategy is working.

Focusing 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.

Breaking down strategic measures towards lower levels, so that

unit managers, operators, and employees can see what's

required at their level to achieve excellent overall performance


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CONTINUED..

A means for implementing strategy by drawing managers

attention to strategically relevant critical success factors, and

rewarding them for achievement of these factors

A framework firms can use to achieve a desired organizational

change in strategy, by drawing attention to and rewardingachievement on factors that are part of a new strategy.

A fair and objective basis for firms to use in determining each

managers compensation and advancement

A framework that coordinates efforts within the firm to

achieve critical success factors. BSC enables managers to seehow their activity contributes to the success of other


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LIMITATIONS

Nonfinancial information is subject to the

reliability of the source and processes used

Some information are required to be handledconfidentially.

require timely, appropriate reporting of

some elements of the scorecard


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CONTINUED..

It is not easy to implement this tool because it

involves a lot of subjectivity.

The tool is much more complex compared to the

other tools The measures that need to be taken is

contingent upon the kind of environment,

industry and the business the organization is in.

A lot of refinement is still required to be done so

that it becomes understandable to every

stakeholder associated with the organization.


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SUMMERY

Balance scorecard is a tool which tells us the

knowledge, skills and systems that employees

will need (Learning & growth ) to innovate buildand adopt the right strategic capabilities and

efficiencies (Internal process ) that delivers

desired value to the market (Customer ) which

will eventually lead to the accumulation ofshareholder value (Financial).


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THANXS..

balance score card pv

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