BBSC Wizard

The following manual

delineates the nuances of
efficient BBSC writing.
 Table of Contents

1. The Balanced Business Scorecard

1.1. Why a Balanced approach is required?
1.2. The 4 Perspectives
1.3. BBSC Cascading
2. How to write your BBSC?
2.1. The SMART Principle
2.2. Definitions in your BBSC
2.3. Weightages
2.4. Some Do’s and Do Not’s
2.5. BBSC Score Calculation
3. Key parts of a BBSC

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BBSC

The Balanced Business Scorecard (BBSC) is a tool for measuring whether

the smaller-scale operational activities of a company are aligned with its
larger-scale objectives in terms of vision and strategy. It motivates & tracks
performance against established goals.
The Scorecard helps implement an individuals plan and facilitates growth by
presenting, in a simple fashion, many of the seemingly disparate elements of
the role & responsibility in a meaningful way. Each individual thus has a clear
understanding of the quality and quantity of work expected from him.

BBSC is filled at the beginning of the financial year.

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________Why a Balanced Approach is required?

The underlying objective of a BBSC is to achieve a right balance on the 4

perspectives considered critical for the organization and specific to its
industry and business. If the organization has to have a consistent and long
term growth and profitability, it is essential that these perspectives are
addressed in a balanced manner. Over emphasizing on one may jeopardize
development of other perspectives. High performance requires a balanced
approach to each of the key elements of business.

Balanced Business Scorecard is an approach which combines all the vital

perspectives to give a comprehensive approach.

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________The four perspectives

At RPG Life Sciences, we have classified the performance parameters under 4

major sub heads each forming a BBSC perspective.

Finance

Innovatio RPG LS
Customer
n/HR Ltd.

Strategy/
Internal
Process
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1. Financial Perspective: How do we look at our shareholders? The basic

aim is to increase value for our shareholders.

2. Customer Perspective: To achieve our vision how should we look at our

customers? If customers are not satisfied, they will eventually find other
suppliers that will meet their needs. Poor performance from this perspective
is thus a leading indicator of future decline, even though the current financial
picture may look good.

3. Strategic/Internal Process Perspective: Organizational Strategy

provides a general scope and direction of the desired organizational
activities. A long term strategic goal is broken down into yearly plans in a
BBSC. These objectives have a gestation time period and start reflecting in
the top and bottom line figures in a few years. This perspective also refers to
internal business processes. Metrics based on this perspective allow the
managers to know how well their business is running, and whether its
products and services conform to customer requirements (the mission)

5. Innovation/HR Perspective: This perspective reflects the organization

culture and climate incubating activities. The objectives under this
perspective contribute to creating a ‘high performance work system’.

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________BBSC Cascading:
The BBSC cascade follows downwards post the BBSC’s of functional heads
with the cross functional synergies built in. The BBSC process must occur in
successive stages, each of which is dependent on the preceding one, to
produce a culminating effect which is of achieving organizations goals.
To put it simply, the business strategy and goals
are set by the top management. The success of MCM Members (VPs /GMs)
which is dependent on the performance of each
and every individual in the organization. Thus once DGM
the Business Strategy for the year is in place, it
sets the responsibilities of the MCM members i.e.
our Top Management. This is in turn percolated to MG I
the next in line, who further cascade it to their
Direct Reports, in order to achieve the overall
targets. This process continues to the bottom line MG II

MG III (A&B)

4 MG IV
in each function thus aligning the day to day work processes in an
organization to the Organizational Vision and Strategy.

The organizational vision and strategy thus cascades through the

organization with precision and transparency clearly stating the
responsibilities of individuals at each level in the following manner

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3. How to write your BBSC?

BBSC has to be prepared mutually by the individual and his Reporting

Manager.

The goals set in the BBSC must have

• An objective statement
• A measurable standard

These goals must be in line with the SMART Principle

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SMART Principle

 Specific (well defined, concrete)

 Measurable (numbers, quantity, comparable)

 Achievable (attainable, actionable)

 Realistic (considering resources)

 Time bound (end date)

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________Definitions in your BBSC

5
 The minimum acceptable (baseline) performance
Floor Level

The goals set by you

Target Level

Goals actually accomplished by you

Achievement

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Weightage
The sum total of all KRAs in the BBSC must equal 100. Each KRA is given a
weightage depending on its criticality and its impact on achieving the final
target. This again is mutually decided by the individual and his Reporting
Manager.

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________Some Do’s & Do Not’s while preparing your BBSC

S. No. Do’s Do Not’s and examples

1 Format should have all the 4
perspectives along with all the
values (Measure, Target, Floor and
Weightage).
2 KRA’s should be specific to
individual’s responsibility. His/her
individual contribution to overall
company objectives must be clear
and under the control of the
individual.
3 All 4 perspectives should have
appropriate weightage, however as
a thumb rule not more that 25 and
not less than 5 to any perspective.
4 While writing target and floor
values, instead of %ages, actual
number must be written.
5 The KRA should be the
achievement of end-result and not
intermittent activities.
6 Along with time frame, delivery
should also reflect the qualitative
aspect. If qualitative aspects are
difficult to find, line managers’
subjective score can be
considered.
The Floor level should be either
7 greater or equal to last year
actual.
Avoid deviating from the standard
format.
Avoid individual carrying entire
company objectives where he/she is
not directly responsible. Eg. if the
company objective is to achieve a
score of 550 in RPG OE, the
respective functions/individual should
break this in such a way that each
function/individual should know
exactly what their specific target is.
They should not take the uniform
objective of achieving 550 points.
Avoid disproportionate score assigned
across the 4 perspectives. Eg. Some
BBSC’s may have very low
Organization/Customer weightings.
Avoid Target & Floor values that are
defined in %age. Eg. Instead of
mentioning 10% growth of sales over
last year put actual number either in
units or Rupees.
Activities like conducting surveys,
meetings, paying visits, making
customer calls are not KRA’s. They
are activities.
Eg. Instead of evaluating a project
proposal based on time lines only its
quality should also be evaluated by
the line manager to see whether the
proposal is worth taking forward.
Same can be applied to audits, MIS
etc.
Eg. If the company has achieved a
sales turnover of X, as a thumb rule
and if the environmental factors have
not changed drastically, the next
year’s floor level should be X and
target level should be X+.

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 Guidelines for preparing BBSC

• KRAs must cover all 4 areas/perspectives of the BBSC

• They have to be in line with your Reporting Managers KRAs
• They must also be an improvement from previous years KRAs
• KRAs must be described in terms of outcomes
• They have to be relevant to your role
• Weightage should be given based on the criticality of the job and its impact on
the achieving your final targets
• Routine activities should not be mentioned
• The unit for target level and floor level should be the same
• Mutually identify necessary skills, resources etc. necessary to meet an objective.
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BBSC Score Calculation

BBSC Score = Achievement Level – Floor Level X Weight

Target Level – Floor Level

Note:
• The BBSC made has to be approved by the reporting manager
• KRAs and weightage can be changed during the year if required. This
would be done in agreement by the reportee and the manager. The
one up superior has to approve any change made by the reportee
online
• If the total weightage of the KRAs is not 100 the BBSC Score will not
get generated

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Key parts of a BBSC

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