Balanced scorecard

HR Balanced Scorecard How to Measure Results
“Adding HR Value through Strategic Alignment”
Andrew Klein, Ph.D.

Key Topics for Today
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What is a “Balanced Scorecard”? How to make the Balanced Scorecard (BSC) a strategic tool? What are the HR measures for a strategic Balanced Scorecard?

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What is a “Balanced Scorecard”?

Whatis a BSC?

“When you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind”
Lord Kelvin,1824-1907

“Not everything that can be counted counts, “Not everything that can be counted counts, and not everything that counts can becounted” and not everything that counts can be counted”
Albert Einstein Albert Einstein
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What is a BSC?

“What gets measured and rewarded gets done.”
On the folly of rewarding A, while hoping for B, Academy of Management Executive, 1996, Kerr, Steve
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What is a BSC?

Assists organizations with: – effectiveorganizational performance measurement – implementing strategy

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What is a BSC? Definition
s easure m set of d The electe tegy. s ra refully on’s st ati d “A ca rganiz orecar n o a sc or the d from in d f derive o use electe s s t asures leader al r me ool fo extern t d sent a ees an loy nce repre o emp forma g t per nicatin e s and e achiev commu utcom o will rsthe ation lde niz s.” takeho e orga s h th ective hic obj s by w tegic ra driver and st ion s miss it
2002 iven, Paul N
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What is a BSC?

The balanced scorecard consist of three things:

Strategic Management System

Balanced Scorecard

Communication Tool Measurement System

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What is a BSC? The Four QuadrantsCustomer Process

What is the value propositions for serving them?  Operational excellence  Product leadership  Customer intimacy  Process perspective How do our processes fulfill the value of propositions for our customers?
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How do our processes provide or link to value for our customers

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What is a BSC? The Four Quadrants
Learning & GrowthFinancial

Enabler of the other three perspectives Need to fill the gaps between desired state and current state Includes  employee skills  employee satisfaction  availability of information  alignment
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Is the strategy execution, as indicated by the other three perspectives producing the desired financial outcomes?

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What is the BSC? Measurement SystemLagging indicators – Financial measurers are lagging indicators because they report the outcomes of actions taken in the previous year Leading indicators – Customer, process, and innovation and growth measures are drivers of future economic performance, which is why they are “lead indicators”

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What is a BSC Public/Non Profit vs. Private Sector Publicand/or non profit BSCs differ from for profit BSCs because: – Mission, not financial goes at the top of the framework – The customer may be donors vary (ie., donors and recipients) – Caution about unintended linkages

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What is the BSC? Objectives of the BSC Objections
– What I do is not measurable! Outcomes vs – – – – –

outputs Results will be usedto punish (or reward?) What is our mission? The public won’t understand negative results This is a fad Is there a “burning platform” for change (management commitment over time)?

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What is a BSC? BSC Development Questions
Mission
Customer
Who do we define as our customer? How do we create value for our customer?

Financial
How do we add value for...