HR Scorecard

HR Scorecard: 

HR Scorecard Prepared by : Gihan Aboueleish

Our Learning Objectives : 

Our Learning Objectives Describe the value and role of the HR Scorecard/Dashboard . Discuss the difference between leading and lagging indicators as measures of HR effectiveness . Identify the components of the HR Scorecard. Identify the key performance drivers and enablers that constitute the primary HR deliverables. Develop some preliminary HR Scorecard/Dashboard measures for your HR department and company. 2 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

PowerPoint Presentation: 

Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish 3

HR Terminology; : 

HR Terminology; BSC : Balanced Scorecard. Effectiveness VS Efficiencies. NGOS : Non-profit governmental organization Enablers Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish 4

The Failure of HR Strategy: 

The Failure of HR Strategy In a 2002 industry survey by SHRM . . . Only 34% of executives view HR as a strategic partner Only 44% of respondents indicated that their organization communicates its strategy well Only 22% indicated that general employees understand company’s strategy 21% indicated that HR only deals with operational issues vs. strategic ones Only 23% indicated that HR strategy was tightly integrated with company strategy Only 25% of HR departments use a balanced scorecard on HR’s contribution to strategy [ SHRM Research, N=1310, Aligning HR with Organization Strategy Survey] 5 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Why Track HR Effectiveness?: 

Why Track HR Effectiveness? To guide decision making — It helps HR staff in how best to manage the HR system to support the company . To evaluate program/department effectiveness — It constitutes a “ report card ” to guide improvement efforts. 6 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

The most effective measures of HR :: 

The most effective measures of HR : Identify a clear, consistent, and compelling connection between the company’s strategy and the work of each employee. Zero in on the critical few measures that have the greatest impact on the company’s bottom line . Document the effects of HR on company performance in credible ways that employees , line supervisors, and managers can understand. 7 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

What’s wrong with Strategic Planning Today?: 

What’s wrong with Strategic Planning Today? L ong-term Plans O bjectives S trategies E nablers R esources Also known as L.O.S.E.R. 8 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

What’s wrong with Strategic Planning Today?: 

What’s wrong with Strategic Planning Today? Biggest Threats often come from OUTSIDE your normal industry Planning from the base of an ‘Existing’ organization vs. zero-based Traditional Analysis (e.g. SWOT) based only on known or existing assumptions or knowledge Spending too much time in market research and analysis Defining the company from a Product/Service perspective vs. Category vs. JTBD (e.g. Coca-cola ) Wrong Benchmark – already successful vs. what made them successful Implementing BSC and PMS to improve Business Model and Strategy New strategy, same people 9 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

The HR Scorecard : 

The HR Scorecard 1 . Focuses on leading indicators. 2. Identifies the differences between HR doables and HR deliverables . 3. Demonstrates HR’s contribution to strategy implementation and to the company’s bottom line. 4. Helps HR managers focus on and manage their strategic responsibilities . 5. Encourages HR flexibility and change. 10 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Balanced Scorecard: Corporate: 

Financial “To satisfy our stakeholders, what Financial objectives must we accomplish?” Internal Process “To satisfy our customers, in which internal business processes must we excel?" Customer “Who are our target customers? What is our value proposition?” Learning & Growth “What capabilities and tools do our employees require to help them execute our strategy? Balanced Scorecard: Corporate 11 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Balanced Scorecard: NGOs, Non-Profits, Governments: 

Mission “Who are our targets? What is our value proposition?” Internal Process “To satisfy our targets, in which internal processes must we excel?" Learning & Growth “What capabilities and tools do our staff require to help them execute our strategy? Financial “To fulfill the Mission, what Financial, how do we fund Internal Processes?” Balanced Scorecard: NGOs, Non-Profits, Governments 12 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Side notes on BSC: 

Side notes on BSC BSC should be a Thought Process and a Tool not a Religion (e.g. Excel ™ vs. Budgeting) BSC ≠ Appraisal New BSC implementations should start linking with Budgeting right from the beginning The ‘proper’ BSC approach should rightly fully be heavily customized to the organization ‘Strategic Planning’ trainings should be provided before ‘BSC’ trainings Clear definitions for Accountability vs. Impact vs. Influence vs. Assistance 13 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

The HR Deliverables : 

The HR Deliverables HR Performance Drivers Results HR Performance Enablers Reinforcing the Drivers 14 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Measuring HR Results . . . : 

Measuring HR Results . . . How do you know if your HR efforts are successful? How do you measure the effects or results of these HR, training , and OD efforts? How will you know that your efforts and initiatives have paid off? 15 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Lagging Indicators: 

Lagging Indicators Lagging indicators are outcome measures that help you gauge your HR progress by examining the final end result or outcomes of your collective efforts. Use of the “lagging” term reflects the delay or gap between your actions and a change in the final end result. Characteristics • Outcome measure. • Indicates the end result of the system. • Tells you what happened , not what is happening . • Less effective at measuring the effects of specific changes made to the system. 16 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Lagging Indicator Examples : 

Lagging Indicator Examples Non-HR Examples; Health — heart attack, liver failure, stroke, death! Automobile — arrived safely at destination (or not ), engine failure , blown tire, citation from traffic enforcement , etc. Economy — GNP growth, national debt, unemployment rate , etc . HR Examples; Employee retention. Employee performance. Organizational performance. Customer retention. Employee productivity. Lagging indicators have a direct bearing on a company’s bottom line. There is a business interest in and a direct financial benefit from improvement in these areas. 17 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Your Turn; : 

Your Turn; What are some lagging indicators that you could use to measure the results of the effectiveness of your HR efforts? 18 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Leading Indicators: 

Leading Indicators Leading indicators are process measures that help you gauge incremental progress you are making toward key HR outcome (lagging ) measures . Since leading indicators measure the results from your processes, there is less of a delay between your actions and a change in the system. They are the performance drivers — the key factors that enable the overall end result (outcome) you want to achieve. Characteristics • Process measure. • Immediate feedback to the system. • Tells you what is happening now. • Can be tracked over time. • Provides an “early warning” of emerging results. • Very responsive to changes in the system 19 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Leading Indicator Examples : 

Leading Indicator Examples Non-HR Examples ; Health — Heartbeat, body temperature, blood sugar levels, cholesterol levels, blood pressure, etc . Automobile — gas gauge, engine temperature, speedometer , odometer, oil level, indicator lights, rumble strips on the roadway, GPS coordinates, etc. Economy — home starts, capital equipment purchases, layoffs , stock market value, public confidence, exchange rates , etc. HR Examples; Increasing retention A reduction in absenteeism in key positions. % increase in internal people expressing interest in position Number of positive comments from customers Leading indicators have an indirect bearing on a company’s bottom line. While there is a business interest in improvement in these areas, there may not be an immediate financial benefit to the company. 20 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Developing Your Scorecard : 

Developing Your Scorecard 1 . Define/Describe Your Business Strategy. 2 . Develop a Strategy Map. 3 . Identify the High Leverage HR Deliverables . 4 . Identify Key Components of the HR Architecture that Support the HR Deliverables . 5 . Develop the HR Scorecard/Dashboard. 21 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

High Leverage: 

High Leverage Specific actions where a small , well-focused effort could produce the most significant and enduring improvements or changes in the target outcomes. Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish 22

The HR Scorecard: 

The HR Scorecard Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish 23 Balancing value creation with cost controls and efficiencies Involves identifying both performance drivers and enablers to support the company’s strategic priorities

HR Competencies : 

HR Competencies Operational efficiency High Performance Work System — knowledge and use of best practices in HR Employee relations/advocacy Strategy execution Change agent Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish 24 HR Competencies

HR Practices ;: 

HR Practices ; Staff competency model Recruitment and selection Employee orientation Compensation and benefits Performance measurement Labor-management relations Effective work design Internal customer satisfaction Communication Training and development Succession planning Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish 25 HR Practices

HR System ;: 

HR System ; Internal HR alignment HR alignment with company strategy Matching HR strategy to the company culture Differentiating HR services to match the different needs of different departments/strategic business units Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish 26 HR Practices

Creating Measures of Your HR System Alignment: 

Creating Measures of Your HR System Alignment Assessing staff perceptions of the internal alignment of your HR practices — Are they internally consistent with one another? Assessing staff perceptions of the external alignment of your HR practices : To what extent do your HR deliverables enable the company’s performance drivers and strategic objectives? To what extent do your HR practices enable/support your HR deliverables? Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish 27

Measuring Internal HR System Alignment: 

Measuring Internal HR System Alignment HR Value HR Control Work Org. Compensation & Benefits Performance Management Training & Development Recruitment & Selection HR Practices -10 +25 -35 -50 0 -25 --- Recruitment & Selection -20 +45 +75 0 +25 --- -25 Training & Dev. +5 +10 -5 +20 --- +25 0 Per. Management -35 0 0 --- +20 0 -50 Comp & Benefits -15 0 --- 0 -5 +75 -35 Work Org. Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish 28 Measuring the “fit:” -100 = at cross purposes 0 = little or no effect 100 = mutually reinforcing

The HR Dashboard: 

The HR Dashboard 29 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish What is the HR Dashboard? The Credit Union’s HR Dashboard is a panel of indicators that present a reading of the relative health/satisfaction of credit union employees on three dimensions: QWL Score , Core Values , and Overall Job Satisfaction .

Applying the Dashboard : 

Applying the Dashboard 1 . HR programs and services. 2. Managerial performance feedback. 3. Variable pay. 4. Lessons learned — What did we do that worked? Didn’t work? Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish 30

Applying the Dashboard: 

Applying the Dashboard 5 . Relationship to other critical measures: Member/Customer Satisfaction Member Retention Financial Performance Employee Satisfaction Internal Customer Service 6. Focus of monthly management meetings. 7. Explore the differences between groups (retail vs. support). Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish 31

Quarterly HR Dashboard: 

Quarterly HR Dashboard 1 . Quarterly Survey; ( a) 20 questions, (b) five core values, (c) overall satisfaction, and (d) two open-ended questions . 2. Sample Size — 60 to 65 employees. 3. Validity — accurate +/- 1%. 4. Administration — e-mail link to survey. 5. Confidentiality — external consultant. 6. Reporting Results — Three “instruments” on the HR Dashboard Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish 32

Example Survey Statements: 

Example Survey Statements I feel pride and a sense of accomplishment in the work that I do . I have input into how I perform my job. I feel appreciated for the good work that I do. My direct supervisor gives me clear performance expectations that enable me to do quality work . The Credit Union’s managers and supervisors have clearly communicated the future direction and goals of the Credit Union to me . Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish 33

What is the Business Model?: 

What is the Business Model? USP Market Discipline Profit Model Google Air Asia 34 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

What is the Business Model?: 

What is the Business Model? USP Market Discipline Profit Model 35 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Business Model: Profit Model: 

Business Model: Profit Model 36 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Strategy + BSC: 

Revenue Financial Learning & Growth Internal Process Customers Cost Margin Strategy + BSC Cash Flow Asset 37 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

What is the Business Model?: 

What is the Business Model? USP Market Discipline Profit Model 38 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Intro: Market Discipline: 

Intro: Market Discipline "They are the most innovative" "Constantly renewing and creative" "Always on the leading edge" "A great deal!" Excellent/attractive price Minimal acquisition cost and hassle Lowest overall cost of ownership "A no-hassles firm" Convenience and speed Reliable product and service "Exactly what I need" Customized products Personalized communications "They're very responsive" Preferential service and flexibility Recommends what I need "I'm very loyal to them" Helps us to be a success Product Leadership Operational Excellence Customer Intimacy 39 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Strategy: Value Disciplines: 

Operational Excellence (low cost producer) Product Leadership (best product) Customer Intimacy (best total solution) Strategy: Value Disciplines 40 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Strategy: Value Disciplines: 

Operational Excellence (low cost producer) Product Leadership (best product) Customer Intimacy (best total solution) Strategy: Value Disciplines 41 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Strategy: Value Disciplines: 

Operational Excellence Competitive price Error free, reliable Fast (on demand) Simple Responsive Consistent information for all Transactional 'Once and Done' Customer Intimacy Management by Fact Easy to do business with Have it your way (customization) Market segments of one Proactive, flexible Relationship and consultative selling Cross selling Product Leadership New, state of the art products or services Risk takers Meet volatile customer needs Fast concept-to- counter Never satisfied - obsolete own and competitors' products Learning organization Strategy: Value Disciplines 42 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Strategy: Disciplines: 

Operational Excellence (low cost producer) Product Leadership (best product) Customer Intimacy (best total solution) Strategy: Disciplines 43 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Strategy: Disciplines: 

Operational Excellence (low cost producer) Product Leadership (best product) Customer Intimacy (best total solution) Strategy: Disciplines HP well-balanced portfolio, mass customization Acer super lean cost structure, aggressive pricing Apple powerful products, premium pricing, limited range Still Doing well in 2009 44 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Strategy + BSC = How : 

Strategy + BSC = How What is your Goal? Cost Reduction Growth Both? 45 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Growth Strategy: 

Growth Strategy GROWTH “Double-Digit Growth”, Michael Treacy 46 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Growth Strategy: 

Growth Strategy GROWTH “Double-Digit Growth”, Michael Treacy Increase switching cost Customize products Preempt Defections Brand Neutralize Competitor advantages Superior Value Buy market share Spot growth opportunities Organized search Promising Market? Make or Buy? 47 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

How Markets determine Growth Strategies (1): 

How Markets determine Growth Strategies (1) Growth Rate Growth Rate Strategy Why? Fast Market Positioning Share Gain Base Retention Maintain market share in strategic segments Prepare for market decline Competitors focus too much on getting new customers Flat Base Retention Share Gain (Acquisitions) Lose customers slower than competitors Create scale economics, squeeze costs 48 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

How Markets determine Growth Strategies (2): 

Churn Rate Strategy Why? Low Share Gain (Acquisitions) Adjacent Markets Buying customer base is cheaper than own efforts New products, old customers strategy High Base Retention Share Gain Adjacent Market Lose customers slower than competitors Customers are always open to the best value and offer Desperate to gain revenue How Markets determine Growth Strategies (2)

How Markets determine Growth Strategies (3): 

How Markets determine Growth Strategies (3) Fast Growth, Low Churn Market Positioning Share Gain Base Retention Adjacent Markets 50 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Strategy + BSC: 

Revenue Base Retention Share Gain Positioning Adjacent Market New Business Financial Learning & Growth Internal Process Customers Cost Margin Strategy + BSC Cash Flow Asset Satisfaction 51 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Strategy: Disciplines, Priorities, and KPIs: 

Operational Excellence (low cost producer) Product Leadership (best product) Customer Intimacy (best total solution) Strategy: Disciplines, Priorities, and KPIs 52 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Strategy: Disciplines, Priorities, and KPIs: 

Operational Excellence Competitive price Error free, reliable Fast (on demand) Simple Responsive Consistent information for all Transactional 'Once and Done' Customer Intimacy Management by Fact Easy to do business with Have it your way (customization) Market segments of one Proactive, flexible Relationship and consultative selling Cross selling Product Leadership New, state of the art products or services Risk takers Meet volatile customer needs Fast concept-to- counter Never satisfied - obsolete own and competitors' products Learning organization Strategy: Disciplines, Priorities, and KPIs 53 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Strategy: Value Disciplines: 

Operational Excellence Move know-how from top performing units to others Benchmark against best in class Ensure operations training for all employees Use disciplines like TQM for continuous learning to reduce costs and improve quality Strategy: Value Disciplines 54 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Strategy: Value Disciplines: 

Strategy: Value Disciplines Customer Intimacy Capture knowledge about customers Understand customer needs Empower front line employees Ensure that everyone knows the customer Make company knowledge available to customers 55 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Strategy: Value Disciplines: 

Product Leadership Reduce time to market Commercialize new products fast Ensure that ideas flow Reuse what other parts of the company have already learned Ensure there are multiple sources of funding Strategy: Value Disciplines 56 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Strategy: Value Disciplines: 

Operational Excellence (low cost producer) Product Leadership (best product) Customer Intimacy (best total solution) Strategy: Value Disciplines 57 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Strategy + BSC: 

Revenue Base Retention Share Gain Positioning Adjacent Market New Business Financial Learning & Growth Internal Process Customers Cost Margin Strategy + BSC Cash Flow Asset Operational Excellence Product Leadership Customer Intimacy Investment Strategy Satisfaction 58 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Alignment: 4-Wheels Model: 

Alignment: 4-Wheels Model Culture Business Model Strategic Planning Structure Person Leadership Resources 59 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Alignment: Framework: 

Alignment: Framework Focus point Alignment Quality Innovation & Differentiation Risk taking Performance Management Corporate obsession Decision making Culture 60 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Alignment: Framework: 

Alignment: Framework Org Structure Job Design Policies & procedures Decision making Job fit Management Systems BSC and KPIs Decentralized & Empower Structure 61 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Strategy: Framework: 

Strategy: Framework Role modeling Vision/Mission/Philosophy Leadership Style Delegation & Empowerment C&B, Promotions Sense of Urgency Speak regularly about Performance Leadership 62 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Strategy: Framework: 

Strategy: Framework Recognition Recruitment Training Profit sharing Values Motivation Self Efficacy Awareness Useful Competencies Career aspirations Attribution (control) Person 63 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Strategy: Framework: 

Strategy: Framework Enablers Technology Equipment Materials Human Intellectual Property Partners Property Resources 64 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Alignment: 4-Wheels Model: 

Alignment: 4-Wheels Model Culture Business Model Strategic Planning Structure Person Leadership Resources 65 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Each Discipline Requires Different Priorities & Resources: 

Operational Excellence Customer Intimacy Product Leadership Organization, jobs, skills Management systems Information and systems Culture, values, norms Each Discipline Requires Different Priorities & Resources 66 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Each Discipline Requires Different Priorities & Resources: 

Operational Excellence Central authority, low level of empowerment High skills at the core of the organization Disciplined Teamwork Process, product- driven Conformance, 'one size fits all' mindset Integrated, low cost transaction systems The system is the process Command and control Quality management Organization, jobs, skills Management systems Information and systems Culture, values, norms Each Discipline Requires Different Priorities & Resources 67 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Each Discipline Requires Different Priorities & Resources: 

Organization, jobs, skills Management systems Information and systems Culture, values, norms Product Leadership Ad hoc, organic and cellular High skills abound in loose-knit structures Concept, future-driven Experimentation and 'out of the box' mindset Person-to-person communications systems Technologies enabling cooperation Rewarding individuals' innovative capacity Risk and exposure management Product Life Cycle profitability Each Discipline Requires Different Priorities & Resources 68 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Each Discipline Requires Different Priorities & Resources: 

Organization, jobs, skills Management systems Information and systems Culture, values, norms Customer Intimacy Empowerment close to point of customer contact High skills in the field and front-line Customer-driven Variation and 'have it your way' mindset Strong customer databases, linking internal and external information Strong analytical tools Customer equity measures like life time value Satisfaction and share management Focus on ‘Share of Wallet’ Each Discipline Requires Different Priorities & Resources 69 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Strategy + BSC: 

Revenue Base Retention Share Gain Positioning Adjacent Market New Business Financial Learning & Growth Internal Process Customers Cost Margin Strategy + BSC Cash Flow Asset Operational Excellence Product Leadership Customer Intimacy Investment Strategy Competencies Information Systems Motivation, empowerment, alignment Satisfaction 70 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

PowerPoint Presentation: 

Which comes first? Strategies -> KPI? KPI -> Strategies? already know our priorities, aware of all strategy options available creating something UNIQUE, INNOVATIVE and DISRUPTIVE e.g. Air Asia conducting a business Turnaround e.g. MAS 71 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

PowerPoint Presentation: 

Which comes first? Strategies -> KPI? KPI -> Strategies? want to find out possible strategies, determine our priorities first thru selection of important KPIs; growing through ‘normal’ business, not a Turnaround. 72 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Example: Selection of KPIs for BSC: 

Example: Selection of KPIs for BSC Customer satisfaction Customer loyalty Market share Customer complaints Complaints resolved on first contact Return rates Response time per customer request Price relative to competition Total cost to customer Average duration of customer relationship Customers lost Customer retention Customer acquisition rates Percentage of revenue form new customers Number of customers Annual sales per turnover Win rate (sales closed/sales contact) Customer visits to the company Hours spent with customers Marketing cost as a percentage of sales Number of ads placed Number of proposals made Brand recognition Response rate Number of trade shows attended Sales volume Share of target customer spending Sales per channel Average customer size Customers per employee Customer service expense per customer Customer profitability Frequency (number of sales transactions) 73 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Wrong KPIs: 

Wrong KPIs “What is the moral of the story?” 74 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

KPIs and Behavior: 

KPIs and Behavior Before: “Handle Time” Per Call Motivated Call Centre staff to transfer callers, getting rid of complainers, making them someone else’s problem Callers at 45% chance of being transferred 7,000 customers each week suffered transfers 7 times or more 75 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

KPIs and Behavior: 

KPIs and Behavior After: “Minutes Per Resolution” of a problem Resolution in ONE CALL become the core goal Reduced probability of call transfers from 45% to 18% 76 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Cause and Effect: 

Revenue Base Retention Share Gain Positioning Adjacent Market New Business Financial Learning & Growth Internal Process Customers Cost Margin Cause and Effect Cash Flow Asset Operational Excellence Product Leadership Customer Intimacy Investment Strategy Competencies Information Systems Motivation, empowerment, alignment Satisfaction 77 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Cause and Effect: An Example: 

Financial Learning & Growth Internal Process Customers / Distributors Revenue Growth Productivity Market Value Department Operations Supplier & Alliances External Involvement Target Markets Products/ Services Channel Strategies Human Resources Technology Information & Intelligence Systems & Processes Cause and Effect: An Example 78 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Sample: Other 1st Level KPIs across industries…: 

Sample: Other 1 st Level KPIs across industries… Financial Services Retail Telecommunications Maximize ARPU Minimize Churn Mutichannel customer service Understand customer behavior related to customer conversion, acquisition, and retention Single view of customer Multichannel customer experience Personalized customer experience Anticipate and prevent churn despite compensation Increase number of products per customer Turn call center information opportunity to up-sell and cross-sell Increase customer satisfaction and loyalty Hospitality Travel & Leisure Manufacturing Personalized customer experience Maximize share of wallet Player/customer loyalty Multichannel customer service Increase customer loyalty and preference Maximize customer revenue Improve service quality and efficiency Capture and close sales opportunities Single view of customers across supply chain Zero-error order capture Streamline opportunity to cash processes Leverage investment in ERP and backoffice systems 79 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Sample KPIs for Each Discipline: 

Sample KPIs for Each Discipline Operational Excellence Price Selection Convenience Zero Defects Growth Customer Intimacy Customer Knowledge Solutions Offered Penetration Customer Data Customer-success focus Product Leadership Marketing Functionality # of Successes # of Failures Learn from key users Interdisciplinary teams Pipeline 80 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

B2B/B2G BSC Matching: 

B2B/B2G BSC Matching Customer/Client/ Government BSC Your BSC Draw your ‘customer’s’ BSC Match their CP/IP with your CP Identify IPs that support/conflict 81 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

What’s In Between Planning and Execution?: 

What’s In Between Planning and Execution? Succession Planning (Business Continuity) Talent Management Differentiation Performance Management System Budgeting + Planning KPIs BSC Business Model 82 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

What’s In Between Planning and Execution?: 

What’s In Between Planning and Execution? Succession Planning (Business Continuity) Talent Management Differentiation Performance Management System Budgeting + Planning KPIs BSC Business Model a.k.a. Strategy Planning a.k.a. Strategy Implementation 83 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Performance Execution Clarity: 

Performance Execution Clarity A Excellent B Good C Average D Poor E Useless

Performance Execution Clarity: 

Performance Execution Clarity A Excellent B Good C Average Good D Poor E Useless

Performance Execution Clarity: 

Performance Execution Clarity A Excellent Excellent B Good Very Good C Average Good D Poor Not Good E Useless Commit Suicide

Performance Execution Clarity: 

Performance Execution Clarity A Excellent Consistently achieved 4 for 3 quarters B Very Good Higher than planned results C Good Achieved Planned Results D Not Good Did not fully meet planned results E Commit Suicide Unacceptable performance

Performance and Pay Clarity: 

Performance and Pay Clarity Pay for Service Pay for Job Pay for Performance Pay for Competency 88 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Compa Ratio Table: 

Compa Ratio Table Use this if your company: Pays for Performance , and Pays for Job rates Def : Mid-Point = Mid Point of Pay Grade Grade E2 Min RM2,000 MID RM2,500 Max RM3,000 89 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Performance and Pay Clarity: 

Performance and Pay Clarity < 0.7 ≥0.7 - ≤0.9 >0.9 - <1.1 ≥1.1 - ≤1.3 > 1.3 5 20 15 12 8 5 4 18 12 9 5 3 3 9 7 5% 4 3 2 1 1 1 0 0 1 0 0 0 0 0 90 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Curse of the Bell Curve: 

Curse of the Bell Curve ‘A’ Staff ‘B’ Staff ‘D’ Staff ‘E’ Staff ‘C’ Staff 91 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Review processes: 

Review processes Result Planning schedule. BSC, Budget Quarterly Performance Appraisals Sales performance reviews Non-sales performance reviews Annual Appraisals Specialized KPI committees Internal Audit & process problems HRM & TND – people problems 92 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Problems, problems and more problems…: 

Problems, problems and more problems… 93 Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish

Application; : 

Application; How aligned is your HR system? Do your HR practices work together or at cross purposes Building from your HR Deliverables . . . Identify your key “high leverage” HR “doable” and enablers in your; HR Competencies HR Practices HR System Saturday, January 21, 2012 HR Scorecard - Gihan Aboueleish 94

Thank you: 

Thank you