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BALANCED SCORE CARD

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BALANCED SCORECARD (BSC)
–While working, in general, trend is towards focusing on Today only.
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–BSC is a strategy map for balancing Today and Tomorrow. –Integrates the immediate & future: Set targets, measure and reward. At same time, orients one towards the future desired state of affairs, as set by Mgt.
–Setting targets involves all concerned. Fosters team spirit and group motivation.

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BALANCED SCORECARD (BSC)
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A Gap Exists Between

Mission-Vision-Strategy
and

Employees’ Everyday Actions
The Balanced Scorecard Describes How the Strategy will be Executed
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- –Using the BSC to transform the strategic plan into a strategic map that tells the story of the strategy. –Providing an opportunity for top executives to compare notes with colleagues on the issues of getting started and implementing a BSC system. 4 .BALANCED SCORECARD (BSC) Objectives -Understanding the basic concepts of the Balanced Scorecard.

5 . 3. 2. Learn.BALANCED SCORECARD (BSC) - D T S A (for BSC) DREAM – The Vision TARGET – SMART STRATEGY – Map it ACTION -Do it. innovate 1. 4.

realistic T .specific M .measurable A .achievable R .BALANCED SCORECARD (BSC) Target Mapping (for BSC) - Targets have to be S M A R T S .time bound 6 .

BALANCED SCORECARD (BSC) What is the Balanced Scorecard ? –The balanced scorecard is a management system to help a business unit focus on achieving current financial results and on creating future value through strategic activities. 7 .

BALANCED SCORECARD (BSC) What is the Balanced Scorecard?  The BSC translates mission and strategy into four dimensions:1. Financial 2. Customer 3. Internal Process 4. Innovation and Growth 8 .

Customer: " How do we become our customers’ most valued supplier?” 9 . Financial: " How do we look to our shareholders?” 2.BALANCED SCORECARD (BSC) - The Four Perspectives 1.

and structure?” 10 . systems. Internal Process: “What processes must we excel at to achieve our financial and customer objectives?” 4.BALANCED SCORECARD (BSC) The Four Perspectives - 3. Innovation and Growth: “How can we continue to improve and create value with employee capabilities.

Strategic objectives must be translated into linked sets of measures so that they can be communicated and implemented.BALANCED SCORECARD (BSC) Why Use a Balanced Scorecard ? - Financial results report past performance but do not adequately drive future performance. 11 . No single measure is appropriate.

WHAT IS THE BALANCED SCORE CARD ? PROFITABLE GROWTH FINANCIAL PERSPECTIVE NEW REVENUE CURRENT BUSINESS PRODUCTIVITY USE OF ASSETS CUSTOMER VALUE PROPOSITION CUSTOMER PERSPECTIVE BEST IN PRODUCT/SERVICE BEST TOTAL SOLUTION The BSC contains the traditional financial measures The BSC links the financial measures with the drivers of future performance BEST TOTAL COST INTERNAL PERSPECTIVE PRODUCT INNOVATION CUSTOMER INTIMACY OPERATIONAL EXCELLENCE LEARNING & GROWTH 12 SKILLS TECHNOLOGY ENVIRONMENT .

BALANCED SCORECARD (BSC) .Balanced Scorecard must tell the The story of the strategy To tell the story of the strategy we begin with the process of… Strategy Mapping 13 .

MODIFY EXISTING PRODUCTS. REDUCE LEAD TIMES INTERNAL PROCESS PERSPECTIVE DEVELOP NEW PRODUCTS. FEEDBACK FROM CUSTOMERS. EXTEND PRODUCT RANGE REDUCE STOCK LEVELS. IDEAS FROM EMPLOYEES. MARKET RESEARCH 14 LEARNING & GROWTH PERSPECTIVE .A COMPANY’S BALANCED SCORECARD FINANCIAL PERSPECTIVE IMPROVE RETURNS INCREASE SALES TURNOVER IMPROVE ASSETS UTILIZATION CUSTOMER PERSPECTIVE CAPTURE NEW MARKET. IMPROVE STOCK CONTROL.

Making the strategy more understandable by redrawing the balanced scorecard…… STRATEGY MAP Improve Returns Increase Sales Turnover Improve Asset Utilization Capture New Market Reduce Stock Levels Extend Product Range Improve Stock Control Reduce Lead Times Develop New Products Modify Existing Products Ideas From Employees 15 Feedback From Customers Market Research .

CAUSE & EFFECT RELATIONSHIPS & BALANCED SCORECARD STRATEGY MAPS.THEN WHAT ? INTERNAL QUALITY PRODUCTION QUALITY MATERIALS HOW ? CAPABILITIES ENABLERS 16 LEARNING & GROWTH SKILLED WORKFORCE + TECHNOLOGY .A CHAIN OF CAUSE AND EFFECT LOGIC THAT CONNECTS THE DESIRED OUTCOMES WITH THE DRIVERS REVENUE GROWTH EFFECT VALUE PROPOSITION FINANCIAL CUSTOMER LOYAL CUSTOMERS CAUSE QUALITY PRODUCT IF.

CAN MEASURE INTERMEDIATE PROCESSES & ACTIVITIES • NUMBER OF VISITS TO CUSTOMER FINANCIAL MEASURES THE RESULT OF AN ACTION AFTER A TIME PERIOD SALES CUSTOMER • HOURS SPENT WITH CUSTOMERS HISTORICAL INTERNAL PREDICTIVE LEARNING& GROWTH 17 AFTER THE FACT CAN MAKE ADJUSTMENTS .PERFORMANCE MEASURES IN THE BALANCED SCORECARD PERFORMANCE MEASURES LAG LEAD MEASURES THE ‘LEAD’ OR DRIVER TO THE LAG MEASURES .

ALIGNING CUSTOMER VALUE MANAGEMENT WITH BALANCED SCORECARD Financial Results Financial Perspective Customer Value Value Proposition Customer Perspective Process Capabilities Capabilities Internal Process Perspective Enabling Infrastructure Systems/skills/assets/IT 18 Enablers Learning & Growth Perspective .

–The BSC operationalizes Strategy into Targets. –Translate the Strategy into Operational Terms. –Develop the Vision and Strategy.BALANCED SCORECARD (BSC) In a Nutshell : Principles for Implementation (Long-Term for SJVN) –Establish a sense of urgency. –Build an Executive leadership team to mobilize change. 19 .

Incentive Compensation. . personal alignment.BALANCED SCORECARD (BSC) In a Nutshell : Principles for Imple-mentation (Long-term for SJVN) –Link and align the Organization around its strategy. –Link strategy and budgeting. 20 –Make Strategy/BSC a Continuous Process. –Make strategy everyone’s job – communication & education for awareness.

BALANCED SCORECARD (BSC) Conclusion –As .The real problem isn’t bad strategy – it’s bad execution –As per Fortune magazine. less than 10% of strategies effectively formulated are effectively executed –The Balanced Scorecard will help in successfully executing the Corporate Strategy 21 .said earlier. In the majority of cases – the estimate is 70% .

–The real benefit comes from making the Scorecard the cornerstone of the way one runs the business. Are we Game? 22 . –The BSC enables managers to see the breadth and totality of Company operations.BALANCED SCORECARD (BSC) Conclusion –The BSC has emerged as the remedy to the limitations of measuring only short-term financial results.

5 2 1. Lacs Rs.t. economic buying. Lacs Rs. Lacs 10 1 6 10 2 6 8 1. FINANCIAL PERSPECTIVE 1.1. No Strategic Objective Weightage (out of 100) Unit Target 5 Excellent 1. manpower and improvement initiatives w. Lacs 135 33 20 135 33 20 132 30 15 130 28 12 125 27 10 120 26 8 23 . Lacs Rs.BALANCED SCORE CARD 2005-06 FOR HR DEPARTMENT Sr.1.5 3 2 0. Lacs Rs. rationalization of services. plan/target •Township •HRDC •Canteen -Revenue generation in the areas: •Township •HRDC •Canteen Criteria Value 4 Very good 3 Good 2 Average 1 Poor 2 2 2 Rs.1 1.2 4 2 2 Rs.1 Expense rationalization -Cost saving in Rs. through various methods such as wastage reduction.r.5 5 6 1 4 4 0.

04.04.05 05.04.04.7 8.2 4 2 2 Score 6 6. revamping the ESS conductance procedure -Improvement in Employee Satisfaction Score -Enhancement in Society Satisfaction Survey Score .05 28.05 30.05 08.05 14.05.05 26.05.05 18.6 8 7 Date 30.05 12.05 10.8 5.1 2.1.25 6 5.05 2. STAKE HOLDER PERSPECTIVE 2.3 Score 8.1 Employee Satisfaction Keeping in view the past experience.4 6.BALANCED SCORE CARD 2005-06 FOR HR DEPARTMENT Sr.1.Conductance of Leadership Effectiveness Survey & its analysis by specified date 4 Very good 3 Good 2 Average 1 Poor 1 Date 12.1.04.8 8.7 2.04.04.04.04.05 02. No Strategic Objective Weig htag e (out of 100) Unit Target Criteria Value 5 Excellent 2.04.6 8.05 24 .

03.06 15.02.2 2 3 % of Emplo yees Nos.02.3 -Structured Communication meetings of HR-Head 2 2 Nos 1 2 1 1 0 0 2.4 -Joint improvement Projects with educational institute -Implementation of Global Compact Programme (Construction of school building in adopted village) -People involvement in QC/Suggestion/ and Improvement Projects: •Non Executives •Executives 2.02.01.1.5 Date 28.06 28.BALANCED SCORE CARD 2005-06 FOR HR DEPARTMENT 2.06 15. 35 75 10 65 85 12 50 80 10 35 75 10 30 70 8 25 60 7 4 25 .03.1.06 31.06 31.06 2.

1 Process Improvement -To comply with the requirements of ISO9001.1. INTERNAL PROCESS PERSPECTIVE 3.2 4 % 90 90 89 88 85 80 3. ISO-14001 & ISO18001 (OHSAS) status (enclosed) . No Strategic Objective Weightage (out of 100) Unit Target 5 Excelle nt 3.1.Implementation of planned Improvement Projects (one/executive) registered through online system 4 Very good Criteria Value 3 Good 2 Average 1 Poor 2 No. of NCRs 5 3 4 5 6 7 3.1 3.3 -Constitution of Nagar Rajbhasa Samiti by specified date 2 Date Dec’ 05 Oct’05 Nov’05 Dec’05 Jan’06 Feb’06 26 .BALANCED SCORE CARD 2005-06 FOR HR DEPARTMENT Sr.1.

1.6 2 Nos 4 6 5 4 3 2 3.05 0.05 0.03 0. 2 Nos 4 6 5 4 3 2 27 .1.07 3.1. Sister units Trg.5 -Improving IR to minimize interruption/production loss with respect to available mandays -Project on knowledge management 3 2 2 % mandays lost 0.BALANCED SCORE CARD 2005-06 FOR HR DEPARTMENT 3.06 0.04 0. 4 6 5 4 2 communication through theme based Open Forum 3.4 -Strategic Nos.7 -Organising special training programmes like Customer Trg.1.

BALANCED SCORE CARD 2005-06 FOR HR DEPARTMENT Sr.1.1.1.12 % increase over previous year 15 25 20 15 10 5 28 . INTERNAL PROCESS PERSPECTIVE contd 3.1.9 3.10 3.1.8 3.11 -Completion of identified training needs -Organising GMPs -Closing of Vigilance Cases -5 S Implementation: a) 5 S Audits -Tree Plantation Criteria Value 4 Very good 3 Good 2 Average 1 Poor 2 2 1 2 2 % Nos Days 5 S index 65 2 168 55 75 2 160 45 70 2 165 45 65 2 168 55 60 1 175 55 0 180 3. No Strategic Objective Weightage (out of 100) Unit Targe t 5 Excellent 3.

06.06.05 24.05 20. No Strategic Objective Weigh tage (out of 100) Unit Target Criteria Value 5 Excellent 4 Very good 3 Good 2 Average 1 Poor 4.2 Completion of MAP activities as per schedule 29 .05 28.1.05 26.06.05 22.1 Implementation of MAP for 2005-06 Updation of e-MAP database with Head of Deptt/Head of section identities for purposes of assigning stretch 2 Date 24.06.06. STRATEGIC CAPABILITIES PERSPECTIVE 4.1 4.06.05 4.BALANCED SCORE CARD 2005-06 FOR HR DEPARTMENT Sr.

1 100 % of the performance plans to be completed by the first announced date (to be certified by Corp. MAP team) 3 before/after scheduled date 4 -2 0 4 7 10 4. MAP team) 100 % of the final reviews to be completed by the first announced date (to be certified by Corp. MAP team) 3 before/after scheduled date 4 -2 0 4 7 10 4.2.2.3 3 before/after scheduled date 4 -2 0 4 7 10 30 .2 100 % of the mid year reviews to be completed by the first announced date (to be certified by Corp.BALANCED SCORE CARD 2005-06 FOR HR DEPARTMENT 4.2.

11.05 20.7.05 15.11.05 31.3 Creation of system for skill upgradation & multiskilling through identifying the activities of Core & Non – core Area for outsourcing and effective manpower planning by specified date Assessing effectivemess of training programmes through external agency as per the guidelines of HRDI Review and modify the HR systems to align them to Business requirements 4 Date 25.12.07.05 25.05 10.1.05 4.07.05 25.11.05 15.05 20.BALANCED SCORE CARD 2005-06 FOR HR DEPARTMENT Sr.07. No Strategic Objective Weight age (out of 100) Unit Target Criteria Value 5 Excellent 4 Very good 3 Good 2 Average 1 Poor 4.11.5 3 31.205 31 . STRATEGIC CAPABILITIES PERSPECTIVE contd 4.08.4 2 No of days before/ after schedul ed date Date 4 -2 0 4 7 10 4.7.05 31.05 05.

05 20.05 25.7.8 3 2. % of identif ied emplo yees 4 7 6 4 2 0 4.8 2.05 10.07.7 4.9 2.05 31.1 -Development / Review of Incentive Scheme 3 1 2 Date 31./ year 2.6 4. Programmes % of Identified employees trained in multi-skilling training modules a) Turner/Machinist b) Welder/Fitter -No of training mandays/employee No of progm s.7. No Strategic Objective Weighta ge (out of 100) Unit Target Criteria Value 5 Excellent 4 Very good 3 Good 2 Average 1 Poor 4.2 % 60 55 50 45 40 4.08.7 2.0.07.7.08.05 15.05 Enhancing Technical capabilities of Manpower -Enhancement of employee skills through competency development trg.07.3 2 Nos/ emp.6 32 .BALANCED SCORE CARD 2005-06 FOR HR DEPARTMENT Sr.

9 2 No. No Strategic Objective Weightage (out of 100) Unit Target Criteria Value 5 Excellen t 4. .10 2 No of initiatives 04 06 05 04 03 02 4. of projects 20 24 22 20 18 15 4.11 5 100 % 80 100 90 80 70 60 Total 33 .BALANCED SCORE CARD 2005-06 FOR HR DEPARTMENT Sr.% Completion of Action plan for CSF 12 (05-06) 4 Very good 6 3 Good 5 2 Average 4 1 Poor 3 2 No.8 -Introduction of New Initiatives in canteen for qualititative improvement in Canteen Services -Improvement in internal customer satisfaction score through ICPS improvement projects Identification & implementation of new initiatives for the benefit of society at large. of initiatives 5 7 4.