Team Members:

Binu Joseph (06)

Divya Boddu(07)

Aikta Dube (08)

Meghraj Gawande(09)

Saurabh Goswami(10)

BALANCED SCORE CARDApplication in Performance Appraisal

PERFORMANCE APPRAISAL

• The process of evaluating the performance of the holder of the job based on the requirements contained in his/her job description.

• This is the most helpful tool an organization can use to maintain and enhance productivity and facilitate progress towards strategic goals.

• It is a means to monitor the way employee work and assess how this matches with organizational needs.

• Through this managers form impressions about the employees and seek to maximize the contribution of each individual.

THE BALANCED SCORE CARD

• Developed by Harvard Professors Robert Kaplan and David Norton in early nineties

• The logic of BS is that learning and people management help organizations improve their internal processes(product development, service etc.) which are critical for creating customer satisfaction and loyalty

• Customer value creation in turn drives financial performance and profitability

• BS enables to translate broad corporate goals into divisional, departmental and team goals in a cascading fashion which helps an individual to see clearly how his performance ties with overall performance of the firm.

THE FOUR PERSPECTIVES OF PERFORMANCE:

 • Customer

• Internal business process

• Learning and Growth

• Financial  

STRATEGIC MAPS

• It is a one-page graphical representation of what we must do well in each of the four perspectives in order to successfully execute our strategy

• “What we must do well” is answered in the form of objectives in a strategy map

• A few strategic objectives within each of the perspectives are selected, and then the cause-effect chain among these objectives are defined by drawing links between them.

• The whole idea is represented in a compelling way so that it is easily understood and embraced by all employees.

STEPS FOR BALANCED SCORE DEVELOPMENT

• Assessment of vision, mission and values of the organization.

• Strategy –Customer values, strategic themes and strategic results.

• Objectives- Strategy elements• Strategic Maps- Objectives are linked • Performance Measures- Targets and baselines• Projects• Application and Automation- Knowledge sharing and

performance measurement software.• Cascade- Business units and Support units• Evaluation- Performance results and Revise strategy

STEPS FOR BALANCED SCORE DEVELOPMENT

USES OF BALANCED SCORE CARD

• Translating the vision into operational goals.

• Communicating the vision and link it to individual performance

• Business planning.

• Feedback, learning and adjusting the strategy accordingly.

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 a business unit.

Continued..

• It aligns the strategic initiatives in order to attain the long-term goals.

• It aligns everyone within an organization so that all employees understand how they support the strategy.

• It provides a basis for compensation for performance.

• The scorecard provides a feedback to the senior management if the strategy is working.

Continued..

• 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.

Disadvantages of Balanced Score Card

• 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.