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Balanced Scorecard and Strategic HR - Coggle Diagram
Balanced Scorecard and Strategic HR
Performance measures of traditional management to have lost their relevance.
Kaplan and Norton developed the theory of the balanced scorecard (BSC)
as an approach to integrating financial and non-financial measures into management in the hyper-competitive environment.
Diverse organizations around the world have used that BSC to achieve performance breakthroughs through focused and effective strategy execution.
manufacturing and service, private sector and public sector, for profit and not-for-profit organizations
When the organization aligns the HR strategies with Organizational Strategies there should be a HR BSC.
(Аlthough) financial earnings are still an important indicator of valuation
a recent trend in evaluation is the increasing emphasis on the intangible, qualitative and non-financial sides of the companies.
Аn important preliminary step prior to choosing the scorecard goals and measures is to “map” the strategy in detail.
Typical scorecard would include at least four perspectives: financial, customers, internal processes, and learning and growth
for each of which the organization has to identify a number of goals and measures for gauging the degree of goal attainment.
BSC may bring a significant change in the way employees view their jobs.
Therefore, it is important to ensure that everyone is involved at every level of the organization.
The implementation of BSC in HR strategic management could be complex.
Managing people is the most prioritized action in the organization because all HR programs and policies are integrated within the framework of the organizational strategy.
HR will thus be defined by what it delivers. This is a challenge for HR. This mandates HR to partner with senior and line managers in strategy execution.
HR has assumed a new role and in strategy terms, is described as SHRM – strategic human resources management.
Balanced Scorecards highlight the knowledge, skills and systems that the employees would need to innovate and build the right strategic capabilities and efficiencies that deliver specific value to the market (customer), which will eventually lead to higher shareholder value (financial) .
Strategy map showing logical sequence with cause and effect relation among the strategies.
It provides the visual framework for integrating the organization’s strategies in the four perspectives of a Balanced Scorecard
We should have the BSC automated. It will facilitate the strategy implementation. We should identify the HR KPIs, set objectives and measures, update the information system design and many other factors will need our close attention.
Urgent task is to identify HR strategies and supporting HR processes & KPIs in line with Organizational Business Strategies.
The best tool will be the Balanced Scorecard Concept