Human Resource

Management
Project Proposal

Balanced Score Card for

Performance Management

Group 6

1. AkhilBansal
2. ApurvaRathore
3. Avi Jain
4. GauravBhutada
5. HeenaAfshan
6. RohanGarg
 Table of Contents

Sr. No. Topic Page

No.
1 Literature Review 2
2 Company Details and Overview 4

1
Literature Review

As a part of literature review, the group has thoroughly explored the research papers available
online and tried to build a solid familiarity with the concept and usage of Balanced Scorecards
and understood how management makes use of it. Heres a short description of the knowledge
gained post perusal of the research papers:

Research Paper - 1:

Balanced Scorecard in Indian Companies - ManojAnand, B S Sahay, and SubhashishSaha

(VIKALPA VOLUME 30 NO 2 APRIL - JUNE 2005)

The Balanced scorecard is used to align the performance evaluation and controls the customers
perspective, internal processes, growth perspectives and analyze their impact on the financial
indicators. It is expected for the Balanced Scorecard to be unbalanced as per the strategy of the
firm. The study focused on the usage of Balanced Scorecard in the Indian context. It was found
that the adoption of Balanced Scorecard was higher in corporate India in comparison with the
U.S. It was also found that the financial perspective to be the most important perspective
followed by the customers, shareholders, internal business, and learning and growth
perspective. The study further focused on Extent of usage, coverage of all four perspectives,
management motivations, identifying KPIs, performance of Balanced Scorecard as a
management tool

The most critical issue faced by the corporate India in implementing the Balanced
Scorecard was establishing cause and effect relationship between the perspectives and assigning
suitable weights.

Research Paper - 2:

Balanced Scorecard Implementation in SMEs: Reflection on Literature and Practice

-Henrik Anderson, Ian Cobbold and Gavin Lawrie (Fourth SME International Conference
- 2001)

This paper deals with the challenges of implementing the Balanced Scorecard. Balance card is
now widely used and recognized internationally and is used in private, public and not for profit

2
organization. A balanced scorecard is a set of measures that reveals the interdependency of the
organization, its employees and other stakeholders. Senior management must translate the
strategies to key drivers which shall be mapped into actionable items. However many small and
medium enterprises face certain problems while implementation.

The scorecard translates the vision and strategy into objectives in: financial, customer, internal
business process and learning perspectives. Despite these powerful results, SMEs are reluctant
to introduce BSC because cost of implementing and purchasing such system remains issue in
SMEs. Certain problems are-

1. Reliability of the data on which the measures of BSC are applied.

2. Half of the companies that implemented BSC were not able to obtain cause and effect
relations.
3. BSC cannot be applied to companies in highly dynamic surroundings because measures
in such companies change frequently.
4. Lack of senior management and too involvement of too few individuals.
5. Development process takes too long.
6. Introducing the Balanced Scorecard only for compensation.

A top down approach is more suitable in implementing BSC. To get an effective BSC it needs to
be shared with the whole organization.

Research Paper - 3:

A Review of Performance Management using the Balanced Scorecard in Public Sector

- AmanahPasaribua,M. GilangDwiAndikab,RezaRachmandac, DermawanWibisonod

(First International Conference on Advanced Business and Social Sciences - 2016)

This paper deals with the implementation of BSC in the public sector during 2010-15 and to
identify the important trends of performance perspective in the public sector. This paper tells us
about the various challenges in measuring performance management in public sector like morale
of human capital, rewards for exceptional performances, changing the executing ideas from
manager to everyday task. In the past, the performance management system considered financial
perspectives as the only measure but today they also consider stakeholders, internal process and
learning and growth of the company. The financial perspective measures and monitors the

3
financial performance of the company while the customer perspective measures the customers
perception towards the organization. The internal process perspective measures the effectiveness
and efficiency of the internal process and procedures. The learning and growth perspective
measures the growth of the organization and it measures the ability of the organization to bring
innovation and sustain its ability to bring change and improve. The performance perspectives of
different organizations were noted to know about the most important perspective trending in
public sector for performance management. This paper focuses more on the involvement of staff
in the implementation process by training the employees to increase their performance and also
considers the pay rise and bonuses on the basis of hard work. The final outcome of the study
came out that around 40% of the reviewed companies consider financial outcomes as the highest
outcome while learning and growth perspective is considered as the most important perspective
because of the low employees performance in public sector.

Company Details

Philips (Electronics)

Philips & Co. started as a manufacturer of incandescent lamps and

some electrical products and went on to become worlds leader in
light bulb production. It primarily has three main divisions: Philips
Consumer lifestyle, Philips Healthcare and Philips Lighting.

Philips is an innovation driver and operates in healthcare, lighting and

lifestyle successfully across the globe. This intrigues us to study about the
how it manages its performance and how has balanced scorecard for
performance management helped Philips to assess its past performance and convert it into
decisions for future.

TESCO(Retailing)

4
Tesco plc currently employs over 470,000 people across 14 countries. The core UK business
employs over 250,000 people in 1,779 stores. The UK business had a major share of 80% in
Tesco's total sales. Operations are done through four different formats
of stores - Express, Metro, Superstores and Extra, depending on the
needs of different types of customers.

Tesco has employed several HR practices and innovative business strategies:

In 1995, Tesco introduced the Clubcard to evaluate its customers.

Tesco adapted the Balanced Scorecard approach to meet its requirements but renaming it
to Steering Wheel. The only difference is the fifth perspective, Community, which is
included along with other four perspectives that are given in Balanced Scorecard.
Tescos performance is reported quarterly to the board, and a summary report is sent to
the top 2,000 managers to cascade to staff.

The strengths and hindrances associated with the Balanced Scorecard approach would be studied
and major two factors: time and fee will be considered.

HSBC(Banking)

HSBC is one of the worlds largest banking and financial services organizations that serves 45
million customers through its four global business: Retail Banking and Wealth Management,
Commercial Banking, Global Banking and Markets, and Global Private Banking.

The balanced scorecard was developed by HSBC includes efficient implementation and effective
policies and tasks necessary to promote the company's customers, employees and management
meet. HSBC centralizes utilization of Balanced Scorecard in a single department.

Balance scorecard highlights -

Financial Perspective
Customer perspective-approximation of HSBC's attempts to reach target groups
Business Process perspective - shows an alignment of key business processes from HSBC

5
 Lessons and prospects for growth - shows an approximation of the learning curve HSBC