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SUBJECT: Performance and Rewards Management
TASK: Group Presentation

Participants Names:
John M. Shiti 13336/T.11
Schola E. Ndonyo 13217/T.11
Nitishe Emmanuel 15423/T.11
Vintan Nchimbi 13355/T.11
Joyce Andrew 13250/T.11
Claudia Simon 13191/T.11
Tonny Mafole 13315/T.11

What is the balanced scorecard? Identify the four perspectives including in the balanced scorecard.
How can HRM practices influence the four perspectives?


Definitions of the key term
- Balanced scorecard

- Four perspectives of a balanced scorecard.
- How HRM practices influence the four perspectives



The Balanced scorecard is a strategic planning and management system that is used extensively in
business, industry, government, and nonprofit organizations worldwide to align business activities to
the vision and strategy of the organization, improve internal and external communications, and
monitor organization performance against strategic goals. It was originated by Drs. Robert Kaplan
(Harvard Business School) and David Norton in the early 1990s as a performance measurement
framework that added strategic non-financial performance measures to traditional financial metrics
to give managers and executives a more 'balanced' view of organizational performance.
This new approach to strategic management was first detailed in a series of articles and books by
Drs. Kaplan and Norton. Recognizing some of the weaknesses and vagueness of previous
management approaches, the balanced scorecard approach provides a clear prescription as to what
companies should measure in order to 'balance' the financial perspective. The balanced scorecard is a
management system (not only a measurement system) that enables organizations to clarify their
vision and strategy and translate them into action. It provides feedback around both the internal
business processes and external outcomes in order to continuously improve strategic performance
and results. When fully deployed, the balanced scorecard transforms strategic planning from an
academic exercise into the nerve center of an enterprise.

Vision and Strategy

Financial perspective
To satisfy our constituents,
what financial objectives
must we accomplish?
Customer perspective
To achieve our vision, what
customer needs must we
Internal process
To satisfy our customers and
stakeholders, in which
business must we excel?
Learning and growth
To achieve our goals, how must
we learn, communicate and
The following are the four perspectives of balanced scorecard and HRM practices that influence the
four perspectives.

Financial Perspective:
The financial perspective indicates whether the transformation of a strategy leads to improved
economic success. Thus, the financial measures assume a double role. On one hand, they define the
financial performance a strategy is expected to achieve. On the other hand, they are the endpoint of
cause and effect relationships referring to the other balanced scorecard perspectives. In explain this
perspective, Kaplan and Norton do not disregard the traditional need for financial data. Timely and
accurate funding data will always be a priority, and managers will do whatever necessary to provide
it. In fact, often there is more than enough handling and processing of financial data. With the
implementation of a corporate database, it is hoped that more of the processing can be centralized
and automated. But the point is that the current emphasis on financials leads to the "unbalanced"
situation with regard to other perspectives. There is perhaps a need to include additional financial-
related data, such as risk assessment and cost-benefit data, in this category.
Customer’s perspective
Recent management philosophy has shown an increasing realization of the importance of customer
focus and customer satisfaction in any business. These are leading indicators: if customers are not
satisfied, they will eventually find other suppliers that will meet their needs. Poor performance from
this perspective is thus a leading indicator of future decline, even though the current financial picture
may look good. In developing metrics for satisfaction, customers should be analyzed in terms of
kinds of customers and the kinds of processes for which we are providing a product or service to
those customer groups.
Internal Business Processes Perspective:
This perspective focuses on the internal business results that lead to financial success and satisfied
customers. To meet organizational objectives and customers’ expectations, organizations must
identify the key business processes at which they must excel. Key processes are monitored to ensure
that outcomes will be satisfactory. Internal business processes are the mechanisms through which
performance expectations are achieved.
Learning and Growth Perspective:
This perspective looks at the ability of employees, the quality of information systems, and the effects
of organizational alignment in supporting accomplishment of organizational goals. Processes will
only succeed if adequately skilled and motivated employees, supplied with accurate and timely
information, are driving them. This perspective takes on increased importance in organizations. In
order to meet changing requirements and customer expectations, employees may be asked to take on
dramatically new responsibilities, and may require skills, capabilities, technologies, and
organizational designs that were not available before.
After we have seen the four perspectives of Balance Score Card in details, let’s see how these
perspective can be influenced by HR practice as its playing field. What has to be noted here is that,
every perspective influenced by a number of practices which are relevant to the given perspective.
This is to say that not every practice will influence a certain perspective. The above explanation
show how different practices influence different perspectives.
Learning and growth influenced by training and development as one of the HR practices. As the
matter of fact this perspective emphasize on the development of HR capabilities and skills. HR
officer also focus on the same aspect in boosting employees motivation and organization
performance towards realization of mission and vision of organization. So by making strategies and
plans to train and develop the HR in an organization, HR officer puts this perspective into action.
Financial perspective, this perspective emphasizes on the timely and accurate process in provision of
funding data and organization financial position. HR officer in any organization needs these
information to execute some duties and responsibilities accurately. In planning and budgeting HR
officer influences the presence of this perspective. HR officer plans for recruitment and selection
issues including the number of employees to be employed, the budget for whole process and their
compensation which include salaries and bonuses. Without financial information, training and
development, recruitment and selection (few to be mentioned) as one of HR practices cannot easily
be executed. So we can say that among other practices this perspective is influenced by planning and
Customer perspective as it holds that, customers should be satisfied to make sure that they are
becoming loyal to the organization; is influenced by a number of HR practices which are impliedly
meant to provide an output which is in line with customer’s expectations and satisfaction. Those
practice includes Performance Management whereby so as to meet the customer satisfaction,
performance standard is agreed, monitored and measured. At the same time as a means of satisfying
internal customers who are determinant of the loyalty and satisfaction of external customers,
rewarding, job satisfaction, motivation and other ways of customer retention are practiced in an
organization. Through these practice, there is no doubt that HR practices influence the above
mentioned perspectives respectively.
Internal business process is another perspective which is also influenced by HR practices. As it has
been explained prima facie, this perspective allows the manager to know how well the business is
running and whether its products and services conform to customer requirements. Again this
perspective is influenced with a number of practice which aims at knowing how well is the business
and the outputs satisfaction. Those practices are performance appraisal, performance management
and training and development. By looking into these practices in details one may find out that they
plays a major role of dealing with what is going on within the organization and to ensure the
required output is produced. Taking performance evaluation as an example we can see that,
individual employees performance is reviewed periodically in relation to pre-established criteria and
organization objectives. This meant to assess how well is the business running and whether or not
the output satisfies the customers since the objectives of any organization is to make sure that its
customers are satisfied.

I summation, a balanced scorecard is not a strategy making tool but is important to strategic
management because it serves as not a typical type of information sheet but one that presents the
core information needed in strategy making. It provides data which should be clear to everyone in
the organization. With the use of balance score card, executives real execute their strategies and help
the planners to plan since it provides a framework that not only provides performance
measurements, but helps planners identify what should be done and measured.

Dr. Kaplan S.R and Dr. Norton P.D (1992).The balanced scorecard- measures that drive
performance. Harvard Business School Publishing, U. S and Canada.
Rao T.V (2004). Performance management and appraisal systems, sage publication