BALANCED SCORE CARD

BALANCED SCORECARD (BSC)

While working, in general, trend is towards focusing on Today only.
-

BSC is a strategy map for balancing Today and Tomorrow. Integrates the immediate & future: Set targets, measure and reward. At same time, orients one towards the future desired state of affairs, as set by Mgt.
Setting targets involves all concerned. Fosters team spirit and group motivation.

BALANCED SCORECARD (BSC)

-

A Gap Exists Between

Mission-Vision-Strategy
and

Employees Everyday Actions

The Balanced Scorecard Describes How the Strategy will be Executed
3

BALANCED SCORECARD (BSC)

Objectives
-Understanding the basic concepts of the Balanced Scorecard.
-

Using the BSC to transform the strategic plan into a strategic map that tells the story of the strategy.
Providing an opportunity for top executives to compare notes with colleagues on the issues of getting started and implementing a BSC system.

BALANCED SCORECARD (BSC)

-

D T S A (for BSC)
DREAM The Vision TARGET SMART STRATEGY Map it ACTION -Do it, Learn, innovate

1. 2. 3. 4.
5

BALANCED SCORECARD (BSC) Target Mapping (for BSC)

-

Targets have to be S M A R T

S - specific M - measurable A - achievable R - realistic T - time bound

BALANCED SCORECARD (BSC)

What is the Balanced Scorecard ?

The balanced scorecard is a management system to help a business unit focus on achieving current financial results and on creating future value through strategic activities.

BALANCED SCORECARD (BSC)

What

is the Balanced Scorecard?

The BSC translates mission and strategy into four dimensions:1. Financial 2. Customer 3. Internal Process 4. Innovation and Growth
8

BALANCED SCORECARD (BSC)

-

The Four Perspectives

1. Financial: " How do we look to our shareholders?

2. Customer: " How do we become our customers most valued supplier?

9

BALANCED SCORECARD (BSC)

The Four Perspectives

-

3. Internal Process: What processes must we excel at to achieve our financial and customer objectives? 4. Innovation and Growth: How can we continue to improve and create value with employee capabilities, systems, and structure? 10

BALANCED SCORECARD (BSC)

Why Use a Balanced Scorecard ?

-

Financial results report past performance but do not adequately drive future performance. No single measure is appropriate.

Strategic objectives must be translated into linked sets of measures so that they can be communicated and implemented.
11

WHAT IS THE BALANCED SCORE CARD ?

PROFITABLE GROWTH
FINANCIAL PERSPECTIVE
NEW REVENUE

CURRENT BUSINESS

PRODUCTIVITY

USE OF ASSETS

CUSTOMER VALUE PROPOSITION

CUSTOMER PERSPECTIVE
BEST IN PRODUCT/SERVICE BEST TOTAL SOLUTION

The BSC contains the traditional financial measures

The BSC links the financial measures with the drivers of future
performance

BEST TOTAL COST

INTERNAL PERSPECTIVE

PRODUCT INNOVATION

CUSTOMER
INTIMACY

OPERATIONAL
EXCELLENCE

LEARNING & GROWTH 12

SKILLS

TECHNOLOGY

ENVIRONMENT

BALANCED SCORECARD (BSC)

- Balanced Scorecard must tell the The story of the strategy

To tell the story of the strategy we begin with the process of

Strategy Mapping
13

A COMPANYS BALANCED SCORECARD

FINANCIAL PERSPECTIVE
IMPROVE RETURNS INCREASE SALES TURNOVER IMPROVE ASSETS UTILIZATION

CUSTOMER PERSPECTIVE

CAPTURE NEW MARKET. EXTEND PRODUCT RANGE

REDUCE STOCK LEVELS. IMPROVE STOCK CONTROL. REDUCE LEAD TIMES

INTERNAL PROCESS PERSPECTIVE

DEVELOP NEW PRODUCTS. MODIFY EXISTING PRODUCTS. IDEAS FROM EMPLOYEES. FEEDBACK FROM CUSTOMERS. MARKET RESEARCH
14

LEARNING & GROWTH PERSPECTIVE

Making the strategy more understandable by redrawing the balanced scorecard

STRATEGY MAP
Improve Returns

Increase Sales Turnover

Improve Asset Utilization

Capture New Market

Reduce Stock Levels

Extend Product Range

Improve Stock Control

Reduce Lead Times

Develop New Products

Modify Existing Products

Ideas From Employees

15

Feedback From Customers Market Research

CAUSE & EFFECT RELATIONSHIPS & BALANCED SCORECARD

STRATEGY MAPS- A CHAIN OF CAUSE AND EFFECT LOGIC THAT CONNECTS THE DESIRED OUTCOMES WITH THE DRIVERS REVENUE GROWTH EFFECT
VALUE PROPOSITION

FINANCIAL

CUSTOMER

LOYAL CUSTOMERS CAUSE QUALITY PRODUCT IF- THEN

WHAT ?

INTERNAL

QUALITY PRODUCTION

QUALITY MATERIALS
HOW ?

CAPABILITIES ENABLERS

16

LEARNING & GROWTH

SKILLED WORKFORCE + TECHNOLOGY

PERFORMANCE MEASURES IN THE BALANCED SCORECARD

PERFORMANCE MEASURES

LAG

LEAD MEASURES THE LEAD OR DRIVER TO THE LAG MEASURES , CAN MEASURE INTERMEDIATE PROCESSES & ACTIVITIES
NUMBER OF VISITS TO CUSTOMER

FINANCIAL

MEASURES THE RESULT OF AN ACTION AFTER A TIME PERIOD SALES

CUSTOMER

HOURS SPENT WITH CUSTOMERS

HISTORICAL

INTERNAL

PREDICTIVE

LEARNING& GROWTH
17

AFTER THE FACT

CAN MAKE ADJUSTMENTS

ALIGNING CUSTOMER VALUE MANAGEMENT WITH BALANCED SCORECARD

Financial Results

Financial Perspective

Customer Value

Value Proposition

Customer Perspective

Process Capabilities

Capabilities

Internal Process Perspective

Enabling Infrastructure Systems/skills/assets/IT

18

Enablers

Learning & Growth Perspective

BALANCED SCORECARD (BSC) In a Nutshell : Principles for Implementation (Long-Term for SJVN) Establish a sense of urgency. Build an Executive leadership team to mobilize change. Develop the Vision and Strategy. Translate the Strategy into Operational Terms. The BSC operationalizes Strategy into Targets.
19

BALANCED SCORECARD (BSC) In a Nutshell : Principles for Imple-mentation (Long-term for SJVN)
Link and align the Organization around its strategy.

Make strategy everyones job communication & education for awareness, personal alignment, Incentive

Compensation.
Link strategy and budgeting.
20

Make Strategy/BSC a Continuous Process.

BALANCED SCORECARD (BSC) Conclusion

As - said earlier, In the majority of cases the estimate is 70% - The real problem isnt bad strategy its bad execution As per Fortune magazine, less than 10% of strategies effectively formulated are effectively executed The Balanced Scorecard will help in successfully executing the Corporate Strategy
21

BALANCED SCORECARD (BSC) Conclusion

The BSC has emerged as the remedy to the limitations of measuring only short-term financial results. The BSC enables managers to see the breadth and totality of Company operations. The real benefit comes from making the Scorecard the cornerstone of the way one runs the business.

Are we Game?
22

BALANCED SCORE CARD 2005-06 FOR HR DEPARTMENT

Sr. No Strategic Objective Weightage (out of 100) Unit Target 5 Excellent 1. FINANCIAL PERSPECTIVE 1.1 1.1.1 Expense rationalization -Cost saving in Rs. through various methods such as wastage reduction, economic buying, rationalization of services, manpower and improvement initiatives w.r.t. plan/target Township HRDC Canteen -Revenue generation in the areas: Township HRDC Canteen Criteria Value 4 Very good 3 Good 2 Average 1 Poor

2 2 2

Rs. Lacs Rs. Lacs Rs. Lacs

10 1 6

10 2 6

8 1.5 5

6 1 4

4 0.5 3

2 0.5 2

1.1.2

4 2 2

Rs. Lacs Rs. Lacs Rs. Lacs

135 33 20

135 33 20

132 30 15

130 28 12

125 27 10

120 26 8

23

BALANCED SCORE CARD 2005-06 FOR HR DEPARTMENT

Sr. No Strategic Objective Weig htag e (out of 100) Unit Target Criteria Value

5 Excellent 2. STAKE HOLDER PERSPECTIVE 2.1 2.1.1 Employee Satisfaction Keeping in view the past experience, revamping the ESS conductance procedure -Improvement in Employee Satisfaction Score -Enhancement in Society Satisfaction Survey Score - Conductance of Leadership Effectiveness Survey & its analysis by specified date

4 Very good

3 Good

2 Average

1 Poor

Date

12.04.05

08.04.05

10.04.05

12.04.05

14.04.05

18.04.05

2.1.2

4 2 2

Score

6.4

6.25

5.8

5.7

2.1.3

Score

8.6

8.8

8.7

8.6

Date

30.04.05

26.04.05

28.04.05

30.04.05

02.05.05

05.05.05

24

BALANCED SCORE CARD 2005-06 FOR HR DEPARTMENT

2.1.4 -Joint improvement Projects with educational institute -Implementation of Global Compact Programme (Construction of school building in adopted village) -People involvement in QC/Suggestion/ and Improvement Projects: Non Executives Executives 2.3 -Structured Communication meetings of HR-Head

2 2

Nos

2.1.5

Date

28.02.06

31.01.06

15.02.06

28.02.06

15.03.06

31.03.06

2.2

2 3

% of Emplo yees
Nos.

35 75
10

65 85
12

50 80
10

35 75
10

30 70
8

25 60
7

25

BALANCED SCORE CARD 2005-06 FOR HR DEPARTMENT

Sr. No Strategic Objective Weightage (out of 100) Unit Target 5 Excelle nt 3. INTERNAL PROCESS PERSPECTIVE 3.1 3.1.1 Process Improvement -To comply with the requirements of ISO9001, ISO-14001 & ISO18001 (OHSAS) status (enclosed) - Implementation of planned Improvement Projects (one/executive) registered through online system 4 Very good Criteria Value 3 Good 2 Average 1 Poor

No. of NCRs

3.1.2

90

90

89

88

85

80

3.1.3

-Constitution of Nagar Rajbhasa Samiti by specified date

Date

Dec 05

Oct05

Nov05

Dec05

Jan06

Feb06

26

BALANCED SCORE CARD 2005-06 FOR HR DEPARTMENT 3.1.4 -Strategic Nos. 4 6 5 4 2 communication through
theme based Open Forum 3.1.5 -Improving IR to minimize interruption/production loss with respect to available mandays -Project on knowledge management

% mandays lost

0.05

0.03

0.04

0.05

0.06

0.07

3.1.6

Nos

3.1.7

-Organising special training programmes like Customer Trg, Sister units Trg.

Nos

27

BALANCED SCORE CARD 2005-06 FOR HR DEPARTMENT

Sr. No Strategic Objective Weightage (out of 100) Unit Targe t 5 Excellent 3. INTERNAL PROCESS PERSPECTIVE contd 3.1.8 3.1.9 3.1.10 3.1.11 -Completion of identified training needs -Organising GMPs -Closing of Vigilance Cases -5 S Implementation: a) 5 S Audits -Tree Plantation Criteria Value

4 Very good

3 Good

2 Average

1 Poor

2
2 1 2 2

% Nos Days 5 S index

65 2 168 55

75 2 160 45

70 2 165 45

65 2 168 55

60 1 175

55 0 180

3.1.12

% increase over previous year

15

25

20

15

10

28

BALANCED SCORE CARD 2005-06 FOR HR DEPARTMENT

Sr. No Strategic Objective Weigh tage (out of 100) Unit Target Criteria Value

5 Excellent

4 Very good

3 Good

2 Average

1 Poor

4. STRATEGIC CAPABILITIES PERSPECTIVE

4.1
4.1.1

Implementation of MAP for 2005-06

Updation of e-MAP database with Head of Deptt/Head of section identities for purposes of assigning stretch

Date

24.06.05

20.06.05

22.06.05

24.06.05

26.06.05

28.06.05

4.2

Completion of MAP activities as per schedule

29

BALANCED SCORE CARD 2005-06 FOR HR DEPARTMENT

4.2.1

100 % of the performance plans to be completed by the first announced date (to be certified by Corp. MAP team)

before/after scheduled date

-2

10

4.2.2

100 % of the mid year reviews to be completed by the first announced date (to be certified by Corp. MAP team) 100 % of the final reviews to be completed by the first announced date (to be certified by Corp. MAP team)

before/after scheduled date

-2

10

4.2.3

before/after scheduled date

-2

10

30

BALANCED SCORE CARD 2005-06 FOR HR DEPARTMENT

Sr. No Strategic Objective Weight age (out of 100) Unit Target Criteria Value

5 Excellent

4 Very good

3 Good

2 Average

1 Poor

4. STRATEGIC CAPABILITIES PERSPECTIVE contd 4.3 Creation of system for skill upgradation & multiskilling through identifying the activities of Core & Non core Area for outsourcing and effective manpower planning by specified date Assessing effectivemess of training programmes through external agency as per the guidelines of HRDI Review and modify the HR systems to align them to Business requirements

Date

25.7.05

15.7.05

20.07.05

25.07.05

31.07.05

05.08.05

4.4

No of days before/ after schedul ed date Date

-2

10

4.5

31.11.05

20.11.05

25.11.05

31.11.05

10.12.05

15.1.205

31

BALANCED SCORE CARD 2005-06 FOR HR DEPARTMENT

Sr. No Strategic Objective Weighta ge (out of 100) Unit Target Criteria Value

5 Excellent

4 Very good

3 Good

2 Average

1 Poor

4.6
4.7 4.7.1

-Development / Review of Incentive Scheme

3
1 2

Date

31.07.05

20.07.05

25.0.05

31.07.05

10.08.05

15.08.05

Enhancing Technical capabilities of Manpower -Enhancement of employee skills through competency development trg. Programmes % of Identified employees trained in multi-skilling training modules a) Turner/Machinist b) Welder/Fitter -No of training mandays/employee No of progm s. % of identif ied emplo yees 4 7 6 4 2 0

4.7.2

60

55

50

45

40

4.7.3

Nos/ emp./ year

2.8

2.9

2.8

2.7

2.6

32

BALANCED SCORE CARD 2005-06 FOR HR DEPARTMENT

Sr. No Strategic Objective Weightage (out of 100) Unit Target Criteria Value

5 Excellen t 4.8 -Introduction of New Initiatives in canteen for qualititative improvement in Canteen Services -Improvement in internal customer satisfaction score through ICPS improvement projects Identification & implementation of new initiatives for the benefit of society at large. - % Completion of Action plan for CSF 12 (05-06)

4 Very good 6

3 Good 5

2 Average 4

1 Poor 3

No. of initiatives

4.9

No. of projects

20

24

22

20

18

15

4.10

No of initiatives

04

06

05

04

03

02

4.11

5 100

80

100

90

80

70

60

Total

33