A balanced scorecard is a strategic management performance metric that helps companies identify and improve their internal operations to help their external outcomes.
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.
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
Hinweis der Redaktion
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.