HR strategy forum: Using a balanced scorecardOn 18 Nov 2003 in Personnel Today Ask our experts. Personnel Today would like readers to send in theirstrategic HR dilemma. All questions will remain anonymous and will be forwardedto our strategy forum members, two of whom will provide step-by-step advice inthe magazine. Send your dilemmas to [email protected] dilemma Using a balanced scorecard I am the HR director for an UK-based global technology company employingabout 7,000 people. The company was formed as the result of the merger of twosimilar sized companies, one of which had acquired a company about a third ofits size the year before. As part of building the new company, the chief executive wants to introducea balanced scorecard. He has commissioned the strategic planning director toset it up. She has formed a steering group made up of the finance director, theinternal IT director and me. We have had a presentation from a specialistconsultant, who is expected to work with the committee on applying the balancedscorecard. My experience of scorecards is limited to an aborted initiative in my formercompany. The plan is to introduce the scorecard at board level and the two managementlevels below. I am required to recommend items for inclusion in the ‘People,Learning and Innovation’ perspective. The challenge is not only to choose thefactors to be used, but to ensure they can be measured. Each company had its own performance indicator system and there is littlecrossover in how people are classified. One company used to do regular employeesurveys, but the other two did not. Our aim as an HR team is to be seen as a credible business partner, so howcan we maximise HR’s contribution to the group? Solution 1 By Marie Gill, head of organisational development, AsdaThe balanced scorecard is amanagement system – not only a measurement system – which enables organisationsto clarify their vision and strategy, and translate them into action. You viewyour organisation from four perspectives, each of which needs objectives,measures, targets, and underpinning initiatives. These are: learning andgrowth; business process; the customer; and the financial perspective, ie, howyou appear to your shareholders.Step 1 Clarify your vision andbusiness strategy. Identify the ‘five to drive’ within the combinedorganisation for the next year or so. Integration of key business processeswould be one, maximising sales opportunities internationally another, but therewill be more. When compiling the list, ensure agreement to it from all businessleaders. Step 2 Define the HR strategywhich supports delivery of this vision. This will include integration of peopleissues, management style, morale, employee understanding of business objectivesand how the organisation will work. Articulate what the world will look like atvarious stages along your timeline. Ensure other business leaders can see howyour strategy supports the business plan.Step 3 Develop yourmeasurement processes and targets. Take account of the different mechanismswithin each of the merged businesses as it may be necessary to compromise onaccuracy in order to get common data as you are looking for trends. Considerreinventing your attitude survey across the business for targeted feedback onmorale, style, training, and communication matters. Also consider:– People – absence, payroll, system conversion programmes andattendance at organisational integration workshops– Learning – training completion, succession planning, internalpromotions, mentors– Innovation – good-ideas scheme, speed to market of newproducts, shared process improvements.Step 4 Link achievement of thebusiness priorities into the performance management system. Your seniormanagers should reflect the ‘five to drive’. For each area of the businessthese can be translated into department, team, and individual performance indicatorsand targets. Use behavioural measures as well as hard measures. Your strategyneeds to develop these in conjunction with business leaders and end users. Step 5 Engage those who will have influence. Set a planto communicate the scorecard philosophy and what will be measured to those whowill manage achievement. Until the system is bedded in and robust, it may bethat only the top layers of the organisation are briefed – but have a plan toroll this out provided that the measures and targets are relevant to youraudience. Solution 2 By Andrew Mayo, director, MLIHR needs to be seen as a seriousbusiness partner – not just to co-operate with the business, but to providesome kind of lead. However, you should be wary of the pitfalls arising frompicking measures just to complete the boxes, and the problem of gettingcredible indicators measured in a standardised way.Step 1 The first priority would be to demonstrate abroader interest in performance management than just the ‘people’ perspectiveof the scorecard. The rationale is that the end result is likely to bereflected in incentive schemes and your concern should be that it all hangstogether. You would need to influence the steering group to establishcause-and-effect relationships between the overall business goals and themeasures to be chosen, so that measures are fully integrated. Step 2 The fact there arethree performance indicator systems is a problem that other measurement areaswill have – except for finance, which is usually integrated first. So eachdirector will have the same problem of getting a consistent approach across thenew company. However, do not go just for what is easy to collect – the chosenmeasures must be useful and be critical in the strategic chain of cause andeffect.Step 3 Do not feel you shouldhave all the same measures for each level in the project, or for each businessunit. The object is to effectively manage performance towards strategic goals –what affects performance at level 3 may not be the same as level 1; whatmatters in one business area may be less important in another. It is specificsthat make a difference, not generalisations. Step 4 Across HR, survey andaudit the data you do have, business unit by business unit. Based on the chosenmeasures agreed with the steering group, what can you build on? What do youneed to create? How long will it take? This may lead to a phased introductionof the scorecard. Make sure the consultant does not lead the group into his/herpet solutions – and works only to support the agenda of the steering group.How the forum worksThe HR Strategy Forum, which issupported by some of the industry’s most experienced people (see below), is PersonnelToday’s major new initiative to help readers become more strategic in theirday-to-day operations. Over the coming months, Personnel Today will give a unique,developmental opportunity to hone your strategic skills using a wide range ofHR scenarios submitted by senior HR professionals. Each week, our panel ofexperienced practitioners and consultants will provide solutions to a typicalstrategic HR dilemma. You can get involved by sending in your own problems,marked ‘strategic dilemmas’, to [email protected] Brown, Assistant director general, CIPDPaul Kearns, Director, PWLJim Matthewma,n Worldwide partner,Mercer Human Resource ConsultingAndrew Mayo, Director,MLILouise Allen, Director, LAPartnersPenny Davis, Head of HR operations,T-MobileMarie Gill, Head of organisationaldevelopment, AsdaNeil Roden, HR director, Royal Bankof ScotlandRalph Tribe, Vice-president of HR,Getty ImagesDilys Winn, HR director,Gloucestershire County CouncilMargaret Savage, Head of HR strategy,BT Comments are closed. Previous Article Next Article Related posts:No related photos.