9. The BSC Defined “ A carefully selected set of measures derived from an organization’s strategy. The measures selected for the scorecard represent a tool for leaders to use in communicating to employees and external stakeholders the outcomes and performance drivers by which the organization will achieve its mission and strategic objectives.” Paul Niven, 2002
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11. The BSC Defined Communication Tool Strategic Management System Measurement System Balanced Scorecard
30. Situation: In 1992, Sears, Roebuck and Company was experiencing a difficult financial condition. The company was losing $3.4 billion annually. Actions: The CEO and the executive team used the balanced scorecard framework to create a culture of feedback and learning by implementing three strategies to make Sears “a compelling place to shop” (the customer perspective), “a compelling place to work” (the employee perspective), and “a compelling place to invest” (the financial perspective). . Results: By 1999, the company had $2.41 billion in operating earnings and it was named the most innovative general merchandise retailer by Fortune.
31. Situation: Conventional satisfaction surveys and the Skandia “Navigator” (balanced scorecard) were unable to pinpoint specific cultural hot spots and managers who do not support entrepreneurial and innovative culture, key for future growth and development. Actions: The HR department refocuses employee-sensing efforts by creating an employee survey that focuses on determining whether employees perceive their unit, their work environment, and their managers as fostering and supporting entrepreneurial behavior. Line managers who, appear to have unsatisfactory behavior receive coaching. Line managers who are unable to make the necessary changes in their management style are asked to leave the company. Results: The assessment process enables accurate pinpointing of problem areas, allowing effective and timely interventions.
32. Situation: After the 2000 merger between GTE and Bell Atlantic, Verizon needed to amalgamate and recalibrate the new HR function with the corporate goals. Actions: Verizon’s HR function formed a core team that identified goals, pertinent metrics and implemented a balanced scorecard composed of HR metrics that link directly to the organization’s business priorities Results: Following the creation of a joint scorecard, HR can explain and defend project and staffing decisions that may be out of the ordinary or counter to perceived strategic necessities. HR leaders now have a tool which supports a focus on tactical excellence while ensuring alignment with business strategy.
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34. Situation: Alterra Health Care, a leading provider of assisted living facilities for the elderly, faced 145 percent turnover and financial losses in 2001. In order to overcome these obstacles, the company needed to transform the HR function to align it with the company’s overall mission and goals. Actions: The Senior Vice President requested assistance from the “Balanced Scorecard Collaborative Incorporated” organization to create an HR Balanced Scorecard. Alterra’s corporate strategy map focused on these elements: financial, customer, business, processes, and organizational learning. To track those elements, the Senior Vice President created a people and culture balanced scorecard that describes HR’s strategic role in improving shareholder value. Results: Within six months, the company had a positive cash flow and the turnover fell 26 percent in 2002 from the year before. Alterra’s customer and employee satisfaction scores show that eight out of ten are “satisfied” or “more than satisfied.”
37. Where must HR excel to ensure that the business meet its goals
38. How can HR add financial value to the business
39. How do HR improve its standing/status in the eyes of the customer
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41. ? Question Decision Should the process of identifying aligned metrics flow from the top down or from the bottom up? Decision #1—If metrics are to be truly aligned with business imperatives, identification of metrics must be top down, starting with business strategy and cascading downward into the domain of HR until suitable measurement items can be identified. Who in the organization can and should decide which HR metrics are value-added? Decision #2—For the strategic perspective, HR should identify metrics because HR is best positioned to answer people capability questions. Decision #3—For all other categories, line input should drive metrics decisions because only the line can determine which measures will enable it to assess whether HR is meeting its requirements.
42. Question Decision Should the process of identifying aligned metrics flow from the top down or from the bottom up? Decision #1—If metrics are to be truly aligned with business imperatives, identification of metrics must be top down, starting with business strategy and cascading downward into the domain of HR until suitable measurement items can be identified. Who in the organization can and should decide which HR metrics are value-added? Decision #2—For the strategic perspective, HR should identify metrics because HR is best positioned to answer people capability questions. Decision #3—For all other categories, line input should drive metrics decisions because only the line can determine which measures will enable it to assess whether HR is meeting its requirements.
56. Tools Result: List of HR Deliverables HR creates a list of total people and service requirements that provides the basis for HR strategy making and measurement