Balanced ScorecardManagerial Case Study 1By Amy Albaugh, Michael Bolin, Yonathan Garnelo, Jason Contino

Case Background• Financial Services Corporation (FSC) is a national

Financial Services company with branches across the country but based primarily on the east coast.

• The company’s growth is owed largely to several mergers over the past few years and as the latest one approaches several changes are being implemented.

• Amy Paul, Measurement Coordinator for the Human Resources (HR) Division of (FSC) has a meeting with the new HR CFO to discuss the progress and implementation of the Balance Scorecard program begun in 2004.

• These are the main points she should consider.

Outline• Difficulties in implementing BSC in HR department• Strengths and Weaknesses in the current BSC

model• Opportunities for modification of the current model• Advantages and disadvantages of BSC as a

performance tool• Advantages of BSC in a merging department• Employee Survey Results• Recommendation #1• Recommendation #2• Recommendation #3

Difficulties in implementing BSC in HR Department

• BSC is a tool using numerical measurements to implement company strategies

• HR is not a generally considered a pathway to achieving company goals.

• Humans present issues with useful ways to quantify performance.

Strengths and Weaknesses of Current BSC Model

• The current model is the culmination of several prior versions.

• Starting with Amy Paul’s initial setup combined with improvements made as more managers were involved with the process.

• The current model is stronger than it’s prior incarnations but still has a couple of obvious weaknesses

• The Metrics have been reduced from 80 to 20 but that still leaves a lot of work to interpret and makes it difficult to be sure that the numbers lead to an effective indicator of progress

• There needs to be an overall approach to the measurement of progress that is not based solely on the BSC

BSC as a Performance Tool

• Advantages• Temptation to manipulate/falsify data• Subjectivity in weighting

• Disadvantages• Employee’s goals not aligned with company’s goals• No motivation to innovate

What are the advantages of using BSC in an organization that is merging in different department score

•BSC as a system to define and measure performance across HR Divisions

•BSC to help companies to identify variations

•Improvement of knowledge and application of the BSC to HR Division functions

•The leaders can agree about the most critical areas and have mutual agreement across the divisions

•A continuous reviewing process of all the divisions together

•At the end there is no one person that is going to be responsible for it all

Employee Survey Results

Employee Survey Analysis

Key Comparisons• HR 2006 VS. HR 2005

(77.56 – 73.67) - Averages

• HR 2006 VS Industry Standard (77.56 – 69.56) Averages

• FSC Overall VS HR 2006 (71.67 – 77.56) Averages

• FSC Overall VS Industry Benchmark (71.67 – 69.56) Averages

Recommendation #1

• Survey Results - Recap• BSC Overall VS. HR

Overall

• Proper Install• Consultants

• Get the Ball Rolling • Process takes time

• Long Run Goals• Increased Profits• Lower Turnover• Higher Customer

Satisfaction

Implement BSC across FSC

Recommendation #1 – Implement BSC across FSC

Aliant Corporation• CEO Jay Forbes• Implemented 2002• Completed 2006• Improved Profits• Reduced Turnover• Increased Customer

Satisfaction

Success Stories with Balanced Scorecard

Recommendation #2

• Validate the Data• Possibility of Manipulated/Falsified Data• Possibility of Data Input Errors

• Analyze Results• Provide Unbiased Analysis• Used by HR to Improve Processes

Recommendation #3

Build a strong commitment and active engagement from every level of leadership

Educate all employees on the strategy of the company

Align employees goals with the goals of the company