Balanced Scorecard
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A balanced scorecard is a strategic management performance metric that helps companies identify and improve their internal operations to help their external outcomes.
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Balanced Scorecard
- 2. MEANING A balanced scorecard is a strategic management performance metric that helps companies identify and improve their internal operations to help their external outcomes. It measures past performance data and provides organizations with feedback on how to make better decisions in the future.
- 3. PROCESS OF BALANCED SCORECARD Building the scorecard • Assessment of organizations • Development of overall business strategy • Decomposition of business strategy • Creation of strategic map • Measurement of performance • Review Phase 1: Implementing the scorecard • The organization balanced scorecard is further broken down into departmental level scorecard so that each department can focus on the elements of the complete organization scorecard. Phase 2:
- 7. HR SCORECARD The HR balanced scorecard is a mix-up of the HR scorecard and the balanced scorecard. HR scorecard is heavily influenced by the business scorecard. Indeed, the HR scorecard takes the strategy as defined in the balanced scorecard as the starting point and then identifies the HR deliverables that drive these outcomes.
- 8. Talent Strategy with HR Balanced Scorecard
- 11. BALANCED SCORECARD AUDIT A Balanced Scorecard Audit is a structured review of both the content and the usage of an organization's Balanced Scorecard. Organizations use Balanced Scorecards for a range of purposes. The two most common are: Performance reporting (generating and distributing historical performance performance information) Performance management (acting on the performance information in support of information in support of improved future performance).
- 12. ADVANTAGES OF BALANCED SCORECARD Consensus on the strategy at Executive level Communicates strategy to the organization Translates strategy into meaningful goals Processes focus to achieve strategic goals Periodic reporting of status of strategic goals
- 13. DISADVANTAGES OF BALANCED SCORECARD Performance is subjective Lacks direct links between financial and non-financial segments A scorecard and not decision making tool Ignores bottom-up perspective High initial cost
Editor's Notes
- Financial Perspective What financial outcomes can an organization expect after successful execution of this strategy? Goal 1 Teams Create More Value at Lower Cost Measured by lagging metrics: Cost to hire Revenue per employee ROI for customer value Customer Perspective Who are the customers of HR? Other business units who need good specialists to execute their strategies. What do HR customers need? Following the trends discussed above, we can formulate these two goals. Goal 1. Improve talent attraction strategy Measured by lagging metrics: Yield ratio – helps tracks the efficiency of the hiring process. Yield ratio in HR shows the percentage of candidates from the recruitment sources that were selected for the next stage of a hiring process. It allows HR and CEO focusing recruitment strategy on reaching the right candidates at a lower cost. Time to hire – helps to focus on the proper number of interviews and organize them in the best way. Time to hire might be a good indicator of the HR hiring process, but it should be more about the way talent managers spend their time budget than about the time itself. Cost to hire – helps to make sure that recruiting is financially efficient. The sum of Recruiting Costs (Internal and External) / Total number of new hires Leading performance comes from the “Recruitment programs improvement” goal from the Internal perspective. Goal 2. Widening the potential talent pool Measured by lagging metrics: Employee engagement index, % High-Performing Employee Turnover, % Leading performance comes from the “Diversity and inclusion” goal from the Internal Perspective.
- Internal Processes Perspective How can HR specialists achieve these goals internally? Goal 1 Recruitment programs improvement Measured by leading metric: % of referral hires Measured by lagging metrics: % of new hires completing probationary period % of new hires present after 1 year Performance of new hires (as measured after 1 year and 3 years) Possible initiatives: Focus on referral recruitment Goal 2 Diversity and inclusion Measured by lagging metric: % of international hires Other Diversity and inclusion metrics (a specific metric is formulated depending on the diversity dimension that is monitored) Possible initiatives: Leverage professional associations and networking groups Learning and growth perspective Where should the learning efforts of HR be focused on? Goal 1 Formulate New Recruitment Principles Measured by lagging metric: Referral recruitment training penetration, % Possible initiatives: Research the profile of candidates needed Training program for referral recruitment Goal 2 Understand Diversity and Inclusion Measured by leading metric: % of diversity-aware HR activities Measure by lagging metric: Diversity culture awareness, % Possible initiatives: Re-formulate the company’s culture to support diversity and inclusion Learn to recruit internationally Cascading HR Goals A good strategy is a product of discussion.