GTI Greentech Industries (India) Pvt. Ltd.

Balance Score Card for HR

21/07/2017

QA-143-2 Greentech Industries (India) Pvt. Ltd. 01.01.2016

 Diffusion of a New Idea

• “The Balanced Scorecard: Measures

that Drive Performance” (Robert S.
Kaplan and David P. Norton, Harvard
Business Review, February 1992)

• About 35% of Fortune 2000 firms

have adopted a balanced scorecard,
55% of those firms are very satisfied
with it. (R. D. Banker, C. Konstans and S.
Janakiraman; January 2000)

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 Balanced scorecard primarily refers to a
performance management report used
by a management team
Balanced Scorecard is also used by
individuals to track personal
performance
Balanced Scorecard elements to inform
personal goal setting and incentive
calculations.
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 • It focus on the strategic agenda of the

organization concerned

• The selection of a small number of

data items to monitor

• A mix of financial and non-financial

data items.
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 Balanced scorecard is an example of a
closed-loop controller or cybernetic
control applied to the management of the
implementation of a strategy
Closed-loop or cybernetic control is where
actual performance is measured,

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 The measured value is compared to a
reference value and based on the difference
between the two corrective interventions
are made as required.
Such control requires three things to be
effective:
1. A choice of data to measure,
2. The setting of a reference value for the
data,
3. The ability to make a corrective
intervention.
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 Prepared : Prasad 21/07/2017 01 of 35

Organizations have used systems consisting of

a mix of financial and non-financial measures
to track progress for quite some time.
One such system was created by Art
Schneiderman in 1987 at Analog Devices, a
mid-sized semi-conductor company; the
Analog Devices Balanced Scorecard.
Schneiderman's design was similar to what is
now recognised as a "First Generation"
Balanced Scorecard design.
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 In 1990 Art Schneiderman participated in an
unrelated research study led by Robert S. Kaplan in
conjunction with US management study described
his work on performance measurement.
Subsequently, Kaplan and David P. Norton included
anonymous details of this balanced scorecard
design in a 1992 article.
Kaplan and Norton's article wasn't the only paper
on the topic published in early 1992 was a popular
success, and was quickly followed by a second in
1993.
In 1996, the two authors published a book The
Balanced Scorecard.
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 Evaluation Methods
Balanced Scorecard – Four Perspectives

Financial Perspective
How should we appear to
our shareholders?

Internal Business
Customer Perspective
How should we Vision Perspective
appear to our And At what business
customers? Strategy practice must we
excel?

Learning and Innovation

Perspective
How should we sustain our
ability to change and
improve?

IHW 2005 Balanced Scorecard 9

 Balanced Score Card Prepared : Pavan 12.04.2017 01 of 35
• Kaplan and Norton describe the innovation of
the balanced scorecard as follows:

“The balanced scorecard retains traditional

financial measures. But financial measures tell
the story of past events, an adequate story for
industrial age companies for which investments
in long-term capabilities and customer relation-
ships were not critical for success.
These financial measures are inadequate,
however, for guiding and evaluating the journey
that information age companies must make to
create future value through investment in
customers, suppliers, employees, processes,
technology, and innovation."

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 Balanced Scorecard
Financial Perspective

How do we look to our

shareholders?

Customer Perspective Internal Process Perspective

How do we look to our Vision & What business processes are

customers? the value drivers?
Strategy
Learning & Growth
Perspective
Are we able to sustain
innovation, change and
improvement

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 Balanced Scorecard for HR
Financial Perspective

Human Cost Control

Return on investment
Budgeting of activities

Customer Perspective Internal Process Perspective

•Employee Satisfaction Vision & •Service quality

•Employee Retention •Policies implementation
•Customer is top Priroity •Strategic management
Strategy
Strategic / Learning & Growth
Perspective
•Employee Training
•Career Growth options
•Employee training

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 Balanced Scorecard for HR
Plan activities considering 4 perspectives
Define the activity
Prepare individual target
Measure each activity log
Make sure quantitative objectives
Compare actual achievement with Plan in
each perspectives
Initiate the activity
Monitor the success
Evaluate
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Re arrange
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