The balanced score card is by itself a comprehensive management system with roots in the vision and mission statements. Therefore, all Key Performance Indicators defined to measure employees' performance (for example) are already tied to the overall organizational objectives which if achieved increases employees effectiveness. However, the biggest challenge is the start. It necessitates an organizational culture change and full management commitment as you know. The second challenge is the capacity of the employees to be allowed to be involved in the initial design of the instruments (KPIs) needed to measure their performance.

Every exercise has its own particularities but all exercises follow the same process.

The balanced score card is a comprehensive management system that emanates from the vision and mission of the organization, therefore, employees' performance is tied to the essence of the model and the organization. However, there are challenges to overcome including top management commitment and organizational culture which permits the employees' full involvement. Therefore, to promote employees' effectiveness necessitates that the model be well implemented. However, the greatest challenge is culture related which regulated the extent of employee full engagement and therefore ti their performance to organizational effectiveness as well.

Dear Hussin, Thanks for your two threads, which are indeed interesting. I agree with what you are saying that all KPIs created under BSC are linked to employee effectiveness. Especially, your second thread talks about this issue far more clearly. But when we compare the literature and illustrations on BSC and employee engagement, you will agree that BSC mostly does not treat employee engagement issues as seriously and comprehensively as perhaps they need to be looked at. By and large, we note the interventions of training & development or some welfare benefits in most BSCs so far as employees' role is concerned. It was with point in mind that I thought scholars like you could reflect on this issues more comprehensively. 

In my experience with implementing BSC, many entrepreneurial organizations, the financial indicators are not transparent and hence i had to customize it with Policy deployment as in Hoshin Kanri and hybrid model was implemented in Dr.Reddy's, Godrej, Nelcast, Nippo Batteries etc.,

There are four perspectives in organizations as per Kaplan and Norton: Financial, Customer, Internal Business, and Learning and Growth perspectives. Each perspective has its own indicators and measures.  All of these measures can be connected to organizational effectiveness.

Any case history for NGO  sector?

Some organizations have five indicators in place of the usual four given by Kaplan and Norton, with sustainability as the fifth indicator especially those organizations that are not substantively  driven by financial performance for their survival. They raise their  KPI keeping in view the environmental considerations and viability. 

The Balanced Scorecard (BSC), a strategic surveillance tool created in the past decade by Norton and Kaplan, aims to remedy the limitations of the models of traditional monitoring, as well as to translate strategies into competitive performance indicators (scorecard) ensuring equilibrium (balance) between the performance of short-term, measured through financial parameters, and those non-financial factors that should lead the company to higher performance competitive and sustainable over time. Italian companies have recently begun to adopt the Balanced Scorecard. According to recent research on the prevalence of the BSC in Italy, carried out by the University in collaboration with Cattaneo-LIUC OutlookSoft Italian, a quarter of the companies surveyed have adopted or is approaching the Balanced Scorecard. It 's a percentage not higher than that of other countries and the importance that the instrument has in helping to translate strategy into operational management actions, providing strategic input to the budget. However, it seems that the BSC as a model for an effective management control, will have a spread in Italy equal to that today the budget.

 How will it be possible to combine this concept with the heavy political interference in hiring public and private in a country where even to exercise a right is sometimes required "the recommendation"?

Balanced Scorecard is devoted to Organisation Learning, for fulfillment of Vision and Mission, and seeks to involve then for organisation Growth, matching the financials, resources, priorities and processes, in tune for a holistic perspective of sustainability (success). If environmental conscientiousness is an objective, balance within that. There are no organisations who may ignore financial perspective. Not even 'not for profit' organisations, or even philanthropy. Even if you have donated money, you wanna ask for accountability in the back of donor's mind. .  

So all KPO's to improve Internal Business systems through people competence.

Dear @ Priyavrat, I fully support your point  of the need to carefully look at the financial viability of all spending on developing the human resource.  But it is also true that chief finance officers do not see the soft aspects of human working and commitment  in the same sense in which they are seen by enlightened HR people as also those with mindsets of transformational leadership. Often, they disagree with HR people and ask about the ROI of all HR investment. There lies the whole problem.

When we see the term "Learning and Growth" perspective in the BSC, it is more of an instrumental intervention which directly links people expenditure in terms of company benefits. But some of the employee engagement interventions lead to very long-term benefits to the company by building a facilitating culture. That does not convince the CFO or even the traditional minded HR chief.

I am advising a large automobile company, and helping its 147 first line managers develop competencies for engagement of the common worker. I suggested to them to have two types of food to be served to the employees during lunch hour as there are several Indians from other parts of the country in the work force, which is provided free to all employees. The HR chief himself  rejected the idea as he  thought that we should not appease the workers. This is called rent-seeking by those in power (HR here) in economics. Similar attitudes are often shown by finance managers who are always in the control mindset. One wonders why Google provides 18 different types of foods to its employees and have a market cap of 386 Billion dollars as of today.

I agree with Ierardi!

NGOs can also use BSC, Amongst the four verticals of

The catch in NGO, (in may cases) these are operated as sister concerns of bigger organizations, may have the willingness to implement but with subjective transparency. BSC is good for team based SELF MANAGEMENT.

I think this can be achieved through understanding of certain basic precepts:

organizational culture of the company in question

financial situation

position regarding the promotion of his acting, services and products

versatility to change

internal training capabilities

update of the description of jobs and work caracterisitcas for each position

analysis of international trends for each type or job

Perhaps these articles help you:

Kettunen, J. (2008). Human resources in the Balanced Scorecard system, In Teresa Torres-Coronas & Mario Arias-Oliva (eds.), Encyclopedia of Human Resources Information Systems: Challenges in e-HRM, Hershey: IGI Global, 464-470.  

Kettunen, J. (2005). Implementation of strategies in continuing education, International Journal of Educational Management, 19(3), 207-217.

Kettunen, J. (2008). A conceptual framework to help evaluate the quality of institutional performance, Quality Assurance in Education, 16(4), 322-332.

Kettunen, J. (2011). Strategy and quality maps in higher education, US-China Education Review, 8(2), 149-156.

Thanks dear @Juha. I will look into these papers. I do hope to get satisfactory answers to my queries. Thanks also to Aleimys as for her useful thread.

I didn't know that Google provides 18 types of food to employees! This fact by itself could mean that the mere BSC adoption, say in a Southern region of Mediterranean area, would not be enough at all...

—g

BSC has been an effective strategic management approach. However, it just be true  as company can get people's engagement in developing KRIs and KPIs for each department and person to realize the company's strategic objectives. These KPIs much be in employee's job description, and are criteria for evaluating the performance of employee, and managers as well.

Thank you Kettunen,

The titles of your papers look interesting, and worthy of application in academics. Are your articles available somewhere for reading?./ downloading?

some readers have requested my papers too, available on  ssrn.com 

i have not known how to respond to them, but since the papers are available, I only prayed, they find the needed.

if your papers are available. shall be obliged for a re-look

Thanks Mr Priyavart Thareja 

Actually, I do not think that any BSC approach could be sort of a remedy to the tragic situation that most employees do not feel very engaged towards their company. Actually, I do think that BSC (not only BSC but BSC as part of a certain mindset) is actually one cause of low engagement.

BSC improves the performance of Self and that of the Inter departmental contribution. So every individual employee is synergically connected with other employees as well. This bring in more of coordination than competition and rivalry at work. At the same time the concerted effort of all the employees is towards the Organization Goal with concentration of Control Control, improving the People capability and Market share.

I'm not an expert on this tool. Just participated in one avaliation of a Dissertation focused on the subject, in one Master Program; and of course, read various texts. I see that the evaluation of people is very difficult to be completely reduced to quantitative measures subject. Thus, these can be used, but, in my view, just as footholds to other forms of assessment of Human Resources, which, although subjective, are more effective since used correctly.

The engagement of an employee occurs when the goals of the business are confused with their own goals, so it is necessary that the results obtained through the BSC have consequences, positive or negative, to the career of the employees involved.

Mr  Priyavart  Thareja

Are your papers in ssrn.com are free to down load? How to navigate to reach your papers?

Well Mr Kettunen, papers are freely downloadable through Google. They are good readings for learning Balanced score card designing and implementation.

Thanks to Mr Kettunen too

Well, I am working on  one day training module for  Ngos .  The trainer is expecting inputs for the following. 

^What are the most appropriate metrics to track for the organization / project ?

- A balance of outcome, output, process and input measures

- Covering various stakeholders (Donors, Beneficiaries, Regulators, Employees, Volunteers, community, etc)

- Measurable with limited amount of time, effort and money investment

- Process to be followed to come up with this set of metrics

Please refer my earlier reply on NGO's

Output Goal

• What is the expectation that is aimed to be achieved this Financial Year
•  The four verticals, these will fit into the process

Before you go with the process, you need to create Matrix of Input - Process

• Each of these to be in columns

Divide each Stake Holder as three columns (as suggested) Time, Money and effort etc.,

Fix the Value and derive the goals.

Fixing the goals is a collaborative process, hence the participants should not be told what there goal is in the initial stage. It should be articulated and then aligned with you workings and their expectations as reasonable deliverable.

Thanks,Krishnan

I do have communicated your earlier reply. The trainer is dedicated  with corporate Exposure. The coordinator is an young post graduate in social work. Hence I will do the research and see your inputs are internalised and delivered.

Wishlist  - a review paper  and a research topic to germinate in this process!!

i believe that this is not a fit tool for measurement of employee effectiveness. It is evaluate the organization from strategic view. The level of evaluation is different from your intention. finally, Despite it has indirect effect on personnel, but not directly. find another measurement.

Performance Prism vs BSM

BSC / BSM is a nice tool but it's all about the underlying indicators. If tou want to encourage employees you need to have indicators which also respect their social life - quite simple actually since we know that the employees' performance also depends on his social staifaction. From a pur business persepctive this is not plausible - it counts monetary values only but from the human persepcitve it is. Now consider implementing a hard fact based BSC - it will show positive results short term. Take a more social and empathy-related BSC - it's long term positive. We should consider the difference between the short term impact and thinking and the loing term thinking

Dear Yahya and Dirk, The question is not of BSC as a tool of measurement. But in case you are promoting HR and business strategy alignment, and in the process  discover that one of the reasons for gap in business strategy realization is the  lack of employee engagement. And,  then you want to do the correction through a BSC framework, as BSC has been  implemented  in the organization. Now, the question is how to build those linkages.

Nirmal Kumar Mudaliar,

Not all. Those who choose to make them available.

Some are paid, most are free.  You may visit to my page thareja dot com to find some links. most papers on that page are downloadable, free

Thanks, Mr. Priyavart Thareja!!

Dear Debi,

I think that incentives are needed in order to increase employee engagement, either intrinsic or monetary. I assume that the most employees regard their job as a source of finance of their private needs. Not all of them are concerned with career advancement or with enhancing their company. However, a proper structure of awards may trigger engagement. As other metrics, the grade of employee participation can be measured using the Balanced Scorecard. You can choose among several key performance indicators. For example, you can use financial indicators (amount of special monetary awards per period) as well as procedural indicators (number of participating employees in voluntary engagement meetings / number orf employee proposals).

For a general overview about the application of the Balanced Scorecard please feel free to refer to my research paper: "The Balanced Scorecard and Beyond – Applying Theories of Performance Measurement, Employment and Rewards in Management Accounting Education".  In the paper you can find further references. It was published in the International Research Journal of Management Sciences 4 (7), pp. 483-491 and thus can be used for referencing.

Paul

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