Applying the balanced scorecard
| Published date | 01 January 2006 |
| DOI | https://doi.org/10.1108/14754390680000856 |
| Pages | 7-7 |
| Date | 01 January 2006 |
| Author | Sue LaChance |
| Subject Matter | HR & organizational behaviour |
7
Volume 5 Issue 2 January/February 2006
METRICS
,
The latest ideas on how to approach
measurement and evaluation of HR activities
DEPARTMENTS AT A GLANCE
STRATEGIC COMMENTARY
,
e-HR
,
HOW TO…
,
PRACTITIONER PROFILE
METRICS
HR AT WORK
REWARDS
,
RESEARCH AND RESULTS
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Applying the balanced scorecard
R
unning a business without a
consistent picture of performance
versus goals is a bit like walking
into an electronics store where all the
televisions are broadcasting different
programs. Depending on which
“picture” you look at, you’d come away
with totally different information than
the person standing in front of the
screen beside you.
It would be nearly impossible to get
all the TV viewers in the store to act and
react in the same way if they were
responding to diverse stimuli. Likewise,
it’s nearly impossible for an organization
to perform in concert at a very high level
unless all the employees are responding
to the same feedback from a single
digital dashboard. Many organizations
are introducing a balanced scorecard to
guide performance.
A flexible approach
The balanced scorecard doesn’t have to
be confined to the four measurement
sections used by balanced scorecard
concept developers Kaplan and Norton –
financial goals, customer perspective,
internal processes, and learning and
growth (or innovation). Rather, the more
critical factor is to ensure the scorecard
fits your organization’s needs and is
purposefully woven into the culture.
ENSR’s digital dashboard
Environmental consultancy, ENSR, took a
“home-grown” approach to building a
balanced scorecard. Guided by a vision
of creating a real-time digital dashboard
that would give every employee access
to key performance indicators (KPIs)
versus company goals from the
corporate level to the individual level,
ENSR rolled up its sleeves and went to
the design table.
The first task for the team was to
agree on the critical metrics that drive
appropriate behavior. The discussion
spanned six months. The silver lining in
the metric selection process is that you
will define the “heart” of your
organization. In ENSR’s case, the end
result was a balanced scorecard with six
categories that mapped directly to its
five-year vision:
1. health and safety;
2. employee engagement;
3. client loyalty;
4. cost management;
5. profitability; and
6. revenue growth.
This tight alignment ensured that
measurements, communications and
values were all aimed at a consistent set
of goals for the future.
Beyond the numbers
Challenge your imagination by asking
“How can we utilize this tool to greatest
effect?” Consider doing some internal
benchmarking at the same time. ENSR’s
scorecard displays current performance
(at corporate, regional, business unit,
and individual levels) against “average”
internal performance and “top 25
percent performance.”
Displaying scorecard results as a
graphic is very effective. ENSR displayed
graphs showing 13-month rolling data
for each metric area on a single page
(or screen). You can promote the
scorecard as an effective learning tool
and provide a glossary of “terms” to
ENSR
Sue LaChance is director of organizational
development at ENSR, a global provider
of environmental and energy development
services to industry and government. The
organization employs 1,600 people, in
more than 70 worldwide locations,
including 45 in the U.S.
educate employees on how you derive
your metrics. Ensure that managers rely
on the scorecard when they routinely
discuss performance at staff meetings,
and know how to show inter-
relationships between the metrics, and
adjustments in management’s directives
based on metric shifts. Used as a
learning tool versus a control tool, it
takes on a whole new meaning.
Link to employee engagement
If communicated well, a balanced
scorecard’s easily accessible data
provides:
• transparency into the organization
• understanding of business drivers; and
• motivation to strive for peak
performance.
When business is good, it’s critical to
communicate the positive
trends…success breeds success. When
numbers go south, it’s a friendly early
warning system – and should be
embraced that way. What better
opportunity to engage the employees
in helping you correct your course?
When the balanced scorecard is used as
a compass to guide your future
destination – it truly will provide each
employee with a clear picture that
directs their day-to-day decisions.
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