balanced score card implementation
TRANSCRIPT
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Performance Management -Balance Score Card ImplementationWorkshop
POLARIS
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Objective
To develop finer elements of Company,Geography and SEC targets
To cascade the targets derived from the aboveto Individual performance targets up to ProjectDirector including performance indicators formeasurement
To develop action plans for achieving thetargets
To establish a performance review mechanism
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WHAT IS BSC
IT IS A PROCESS
For establishing a shared understanding
of the strategy and what is to beachieved & How it is to be achieved onthe vital pillars of Organisationalperformance
And an approach to managing people
Which increases the probability ofachieving job related success.
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BSC facilitates both at the Team and Individuallevel
Focus on Priority Areas for performance
Specifying the desired Results in the priority area
(Objectives)Identifying Actions required to get those results
(Action Plans), and
Monitoring and ensuring that the actions arecompleted fully and in time (Performance Reviews)
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Main Features of BSC
Emphasis of significant Priority areas ( KRAS)
Objectives at all levels
ParticipationPeriodic review
Appropriate systems and procedures
Role clarityMultiple accountability
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KEY CONCEPTS IN BSCMISSION
BUSINESS PLAN
KEY RESULT AREAS AND TARGETS FOR
Geography / SEC
INDIVIDUAL OBJECTIVES SETTING ( up to PDlevel)
ACTION PLANS FOR INDIVIDUAL
REVIEWS
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REPRESENT PRIORITY AREAS (PARETO PRINCIPLE)
VERY PRECISE
NOT DIRECTIONAL
INTERNAL PROCESS
FINANCIAL
CUSTOMER
LEARNING AND GROWTH
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EIGHT MOST COMMONLY USED PRIORITY AREAS FORBUSINESS ORGANISATION
> Profitability>
Market share> Productivity> Cost of quality> Product development
> People performance> Public responsibility> Financial Resources
Corporate HR
(Peter Drucker, John Humble)
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SET IN THE KEY RESULT AREAS
Functions:1. It guides and stimulates action2. It provides a basis for evaluation
and control of performance
HIERARCHY OF OBJECTIVE
TIME
LEVEL
Qualifying conditions:1. TANGIBLE INTENTIONS WHICH
LEND THEMSELVES TOEVALUATION
2. AT THE END OF A SPECIFICPERIOD OF TIME / DATE
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-SPECIFIC
- MEASURABLE
- AGREED
- REALISTIC
- TIME BOUND
Quantity,Quality,Cost and Time)
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BSC comprises of the following
key steps:
Identifying Key result areas at EG & Team levels inconsonance with the elements of BSC
Setting objective for the EG / TEAM or work groupsand individual managers #
Directing activities (action plan) towards theachievement of these objectives.
Reviewing individual, work group, Team and EGperformance against these objectives at periodicintervals
# we will be focusing upto PD level for 2005-6
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Why Company level objectives?
1. It is a basis for formulation ofGeography and SEC Objectives
2. It integrates the Organisation with theEnvironment
Why Geography or SEC level Objectives ?
1. It is a basis for formulation of EGand.Individual Objectives
2. It Integrates the Teams and EGs andSECs with the Organisation
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WHY INDIVIDUAL
OBJECTIVES SETTING ??
Clarify the Individuals role vis--vis hisseniors,peers and subordinates
Integration of Individual needs andobjectives with that of the organisation
Availability of relevant basis for
performance assessmentDevelopment of Manager
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Objective Setting process
Definition of the purpose of theorganisation
Understanding long range and strategicobjectives
Setting short term Co./ Geography / SECobjectives
Setting EG objectives
Setting individual manager objectives
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Balance Score Card System
An objectiveshould :
Be Within a Priority Area ( KRA)
Clearly outline the results to be achieved
Define the time within which it is to be achieved
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Balance Score Card System
Any team level objective should be cascaded down to the working
level on the frame work for performance
Company level
Geography / SEC level
EG level
Team/Work Group level ( PD)
Individual level
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1. TELL ME WHAT YOU
EXPECT FROM ME ?
2. GIVE ME AN
OPPORTUNITY TOPERFORM.
3. GIVE GUIDANCE
WHENEVER I NEED.
4. LET ME KNOW HOW
I AM DOING.5. REWARD ME
ACCORDING TO MYPERFORMANCE.
GoalSettingProcessAgreedupon KRAs/Objectives
Goal/role Clarity,
Empowerment toperform
PerformanceDevelopment Coaching
Reviews & feedback.
Performance relatedPays, bonuses etc
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Individual Objective
setting Process
1. EG Council Meeting to understandIndividuals unique contribution to
achieve the EG Objectives2. DRAFT objectives document preparation
3. Agreement Meeting
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Balance Score Card System
PROFITABILITY
Company objective
To increase return on net assets
from 20% to 23%
by March 2006
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Balance Score Card System
Co. objective
To increase
return on net
assets from
__% to __%
by March 2006
FINANCIAL
Increase sales from 500 units in 2004-05 to 600
units in 2005-06 : Geography/Marketing
Increase realisation from _____% to ____%(
Goegraphy and SECs)
Improve collection on sales from ____ days to ___
days in March 2005-06 from 2004-05 Geography
Achieve cost reduction of 5% on expenses by March2005-06 -All SECs
Increase throughput from __% in 2004-05 to __% in
2005-06SECs
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Balance Score Card System
Company
objective
To reduce
cost by 5% on
expenses
by March 2006
Geography / SEC OBJECTIVES
Reduce overhead cost from ___during 2005-2006 to
: Geography
Reduce unbillable travel costs from ___to _______during 2005-06 : SECs
Reduce Estate administration charges by 10 % I.e.
from. To.: Corporate Administration
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ACTION PLANNING
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Action Planning
Definition of responsibilities for specificresults / Actions
Formulation of action plans- prioritising /sequencing tasks, assigning responsibilityand fixing time targets
Implementation of plans
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MAJOR ACTIVITIES OF
ACTION PLANNING.
Deciding on appropriate strategies for achievingthe objectives.
Assigning responsibility for the achievement ofan objective.
Allocating resources people, materials,facilities, funds etc. required to achieve theobjectives.
Programming the specific activities based on thebest possible alternative for effective use ofallocated resources to achieve agreedobjectives.
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ACTION PLANNING
INVOLVES:
1. Generation of alternative(s)
2. Evaluation of alternatives
3. Selection of the best alternative(s)4. Detailed programming.
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GROUP ACTION PLANNING ON
THE GEOGRAPHY AND SEC
OBJECTIVES
1. After agreement on the objectives ,identify thesub objectives
2. Assign responsibilities for each activity andidentify support roles (contributing Managers)and the support contribution
3. Establish critical relationship among majoractivities
4. Estimate the Time required for each activity
5. Identify resources required for the variousactivities
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BENEFITS OF ACTION PLAN
It identifies accountability for performance
It identifies the nature of support contribution inwork relationship
It validates objectives and increases theconfidence in their feasibility
Ensures selection of the best possible alternative
It identifies potential problem areas
It provides a basis for estimating time and cost
It facilitates planning,mobilsation and allocationof resources
It establishes intermediate milestones
It facilitates delegation of authority
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Foundation of BSC
PERFORMANCE REVIEW
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Performance review
Periodic review and control (takecorrective action)
Annual review of overall performanceReinforcement of desired actions through
Management policies and practices
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Balance Score Card implementation-
PROBLEM AREAS
Lack of clarity in identifying contributions
No reward to Managers who develop theirsubordinates
Managers reluctance to have face to face anddiscomfort in playing god
Managers lack skills for appraisal
Seen as an annual activityAppraiser and appraisee operate from different
frames
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PERFORMANCE REVIEW
FEATURES1. Focus on performance
2. Emphasis on improvement
3. Future Orientation
4. Frequent reviews5. Involvement of self in appraisal
Conditions for Effective Review
Preparation for review Concern for performance
Quality of analysis
Avoid Hand holding and Crucification
Need for Time
FORMAL PERFORMANCE
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FORMAL PERFORMANCE
REVIEWS
Formal Performance Reviews are must:
1.To convey seriousness of BSC
2.Identify reasons for non-achievement3.Modifying / dropping irrelevant
objectives
4.Adding fresh objectives
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IDENTIFICATION OF GEOGRAPHY OR SEC LEVEL
OBJECTIVES
Element : ________________
a) What will be achieved / completedb) Improve from _____ to ______
c) Reduce from ______ to ______
When (Target Date)
1
2
3
4
Whom
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BSC Review
It is the basic spirit of BSC to have regularreview-preferably monthly at each level-therespective Teams which had done the Goal /
Objective settingFor facilitating ease of review and monitoring,
we use an X Matrix
Usually, the essence of the objectives and theaction plan is captured in the X Matrix andeach action plan is supported by a detailedworkout using MS project
HOW INDIVIDUAL OBJECTIVES ARE FORMULATED
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FORMULATION OF GEO / SEC
LEVEL KRA/OBJECTIVES
GROUP MEETING TO IDENTIFYUNIQUE CONTRIBUTION
ROLL DOWN/ROLL UP
PROCESS
PREPARATION INDIVIDUAL
OBJECTIVES
PREPARATION INDIVIDUAL
OBJECTIVES
PREPARATION INDIVIDUAL
OBJECTIVES
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EXERCISE
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RESPONSIBILTY MATRIX
S.NO GEO / SEC OBJECTIVE ACTION PLAN FORACHIEVING OBJ
TargetDate
PRIMARYRESPONSIBILITY
SUPPORTROLE (WITHIN
ANDOUTSIDEDEPT
REMARKS
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THANK YOU.ALL THE BEST