HR Divisional Business Drivers and KPI Development Workshop
HR Divisional Business Drivers and KPI Development Workshop
Program Agenda
Day One
Introduction of Balanced Scorecard Cascading of HR Performance Scorecard Strategy Map Human Resources Identifying Department Key Performance Indicators
Day Two
Writing SMART Key Performance Indicators HR Performance Appraisal Form Performance Appraisal Process (September till December 2009)
A Balanced Scorecard is
a management and measurement system whose purpose is to translate strategy into a limited set of measures that uniquely communicate your vision to the organization Kaplan and Norton ...its key management perspectives are ...
What is the Balanced Scorecard? It addresses four basic questions: Financial Perspective: How are we faring with shareholder returns? Customers Perspective: How do customers see us and value our services? Internal Process Perspective: What must we excel at to meet customer needs? Learning & Growth Perspective: How can we develop our people and their capabilities?
Translate Strategy: The BSC Translates Strategy into the Four Perspective Framework
The Strategy
The BSC represents the cause and effect relationships in your strategy.
Financial Perspective
If we succeed, how will we look to our shareholders?
Profitability Growth Shareholder Value
Outcomes
Customer Perspective
To achieve our vision, how must we look to our customers?
Price Service Quality
Internal Perspective
To satisfy our customers, what management processes must we excel at?
Infrastructure Productivity Cost Technology
Drivers
The BSC is comprised of themes, objectives, measures, targets, and initiatives.
KPIs
Measures
HRA Division
Individual
The Strategy Map Aligns Processes and Intangible Assets to Customer and Financial Outcomes
Sustained Shareholder Value
Financial Perspective
Productivity Strategy
Customer Perspective
Price
Quality
Availability
Selection
Functionality
Service
Partnership
Relationship
Brand
Image
Product/Service Attributes
Internal Perspective
Operations Management Processes Processes that produce and deliver products and services
Regulatory & Social Processes Processes that improve communities and the environment
CREATING ALIGNMENT
Strategic Job Families
Human Capital
Skills Training Knowledge
CREATING READINESS
Strategic IT portfolio Organization Change Agenda
Information Capital
Systems Databases Networks
Organization Capital
Culture Leadership Alignment Teamwork
The Premise
The Conclusion
Strategy
Balanced Scorecard
Statement of what strategy must achieve and whats critical to its success
Objectives
Internal Fast ground turnaround
Measurement
Target
Initiative
Fast ground
turnaround
30 Minutes 90%
Cycle time
optimization
Objectives
Measurement
Target
Initiative
Fewer Planes
Market Value 30% CAGR Profitability 20% CAGR More Customers Seat Revenue Plane Lease Cost 5% CAGR Fewer planes Flight is on -time FAA On Time Arrival Rating Lowest prices Customer
Ranking (Market Survey)
#1 #1
Quality
management Customer loyalty program
Fast ground
turnaround
30 Minutes 90%
Cycle time
optimization program
Ground crew
alignment
% Ground crew
trained
yr. 1
% Ground crew
stockholders
1. Executive Involvement
Strategic decision makers must validate and own the strategy and related measures
2. Cause-and-Effect Relationships
A good Balanced Scorecard will tell the story of your strategy in actionable terms.
Every objective selected should be part of a chain of cause and effect linkages that represent the strategy
3. Balance between outcome and leading measures There should be a balance of outcome
measures and leading measures to facilitate anticipatory management
4. Financial Linkage
Every objective can ultimately be related to financial results
Group Activity
Work in Groups of 4
Identify what are the HR objectives complements: 1) Finance
2) Customer
3) Internal Processes 4) Learning & Growth
Perspective F1
Strategic Measures Variance of actual against departmental budget Employment cost per employee Recruitment cost per employee Employee cost over/budget/revenue/profit/operating cost Admin cost per employee Admin cost over budget/revenue/profit/operating cost Rating vs. internal satisfaction (survey)
Targets
HR PERFORMANCE SCORECARD
Finance Perspective
F2
F3 Customer Perspective C1 I1
Monitoring the administrative costing activities Improve on internal customer satisfaction Review and improve the effectiveness of HR internal control systems
Internal Perspective
Percentage of reviews within specified timeframe Fulfillment of specified number of training hours per employee Improvement in performance evidence in annual appraisal Variance of actual against organizational and departmental training budget
L1
HR Divisional Business Drivers & KPI Development Workshop The Balanced Scorecard for Human Resource Division
Perspective Strategic Objectives
Strategic Measures
Variance of actual against departmental budget
Targets
F1
Finance Perspective
F2
Employment cost per employee Recruitment cost per employee Employee cost over/budget/revenue/profit/operating cost Admin cost per employee Admin cost over budget/revenue/profit/operating cost
F3
Customer Perspective
C1
Internal Perspective
I1
Fulfillment of specified number of training hours per employee Improvement in performance evidence in annual appraisal Variance of actual against organizational and departmental training budget
HR Performance Scorecard
Finance Perspective
F2
F3 Customer Perspective C1 I1
Monitoring the administrative costing activities Improve on internal customer satisfaction Review and improve the effectiveness of HR internal control systems
Internal Perspective
Percentage of reviews within specified timeframe Fulfillment of specified number of training hours per employee Improvement in performance evidence in annual appraisal Variance of actual against organizational and departmental training budget
L1
Recruitment
Administrations
Recruitment
Administrations
Recruitment
Administrations
HR Divisional Business Drivers & KPI Development Workshop Balanced Scorecard Cascading Process
By Whom Cascading Process OUTCOME
Vision
Corporate Role
HR PERFORMANCE SCORECARD
Organizational Development & Training Compensation & Benefits
Perspective
Strategic Objectives
Strategic Measures
Targets
F1
F2
Employment cost per employee Recruitment cost per employee Employee cost over/budget/revenue/profit/oper ating cost
F3
Customer Perspective
C1
Recruitment
Internal Perspective
I1
Administrations
Learning and Growth L1 Develop skilled workforce
Fulfillment of specified number of training hours per employee Improvement in performance evidence in annual appraisal Variance of actual against organizational and departmental training budget
Example: Identify the intermediate drivers that link training and development programs and behaviours to business priorities and financial performance
Training Total Return
Leads to, .
LEADING INDICATORS LAGGING INDICATORS
Training
Responsiveness to Clients Employee Morale Customer Satisfaction Increased Sales Total Return
Cause Correlation
Effect
strategy, and
processes and systems required for implementing the strategy Draw a cause and effect roadmap to stakeholder value shareholder, customer, and employee.
What gets measured gets done. If you do not measure results, you cannot tell success from failure. If you cannot see success, you cannot reward it. If you cannot reward success, you are probably rewarding failure. If you cannot see success, you cannot learn from it.
Program Agenda
Day One
Introduction of Balanced Scorecard Cascading of HR Performance Scorecard Strategy Map Human Resources Identifying Department Key Performance Indicators
Day Two
Writing SMART Key Performance Indicators HR Performance Appraisal Form Performance Appraisal Process (September till December 2009)
The Performance Management Process is a continous cycle that supports a cultural of excellence in service delivery and productivity. It enables us to link business objectives to individual objectives and focus on priorities. It is a major part of the on-going process of managing people and not merely the completion of forms. Formal process to measure performance, give feedback and document performance. Identify training and development needs. Identify special talent and provide support for advancement.
Purpose - continued
Identify weaknesses in work processes
assessments about salary increases based on performance Direct work and behaviour of a unit or team towards achieving business targets Clarify expectations performance and others between the manager and the individual
Performance Definition
WHAT an Individual achieves
(Results/Individual Key Performance Indicators)
= PERFORMANCE
Specific A specific objectives is one that is understandable, clear, concise and explicit. For example: Recruitment of management trainees.
To be clearer, the objective can be rewritten as: ______________________________________________ ______________________________________________ ______________________________________________ ______________________________________________ ______________________________________________
Specific A specific objectives is one that is understandable, clear, concise and explicit. For example: Recruitment of management trainees. To be clearer, the objective can be rewritten as: Develop an action plan for the recruitment of management trainees by shortlisting and assessing the candidates within 75 days time (from date of advertisment in the newspaper.
Measurable A measureable objective defines how it will be measured. This can be in terms of quantity, cost, timeliness, and/or quality. Example: Deploy HRIS as the main database of employee records. Well written objective ______________________________________________ ______________________________________________ ______________________________________________ ______________________________________________
Measurable A measureable objective defines how it will be measured. This can be in terms of quantity, cost, timeliness, and/or quality. Example: Deploy HRIS as the main database of employee records. Well written objective Deploy HRIS as the main database of employees data (personnel, history, career training and etc) been updated to current month by October 2009 according to blue print of the master document plan. (evidence: all filing of paperwork cleared / no back log & ease to access personnel data of any employee) without any error.
Achievable An achievable objective defines how realistic it will be achieved and not beyond your reach. Achieve a higher rating in Customer Satisfaction Survey Example: Well written objective: ________________________________________________ ________________________________________________ ________________________________________________ ________________________________________________
Achievable An achievable objective defines how realistic it will be achieved and not beyond your reach. Achieve a higher rating in Customer Satisfaction Survey Example: Well written objective: To achieve rating of 4 or higher on a 5 point in Customer Satisfaction Survey conducted by an outside agency by 31st December 2009.
Result Oriented
The objectives set must be able to reflect the results of the objectives.
A less SMART objective might be: Continuous performance awareness briefing for all employees. Example: Well written objective _________________________________________________ _________________________________________________ _________________________________________________ _________________________________________________
Result Oriented
The objectives set must be able to reflect the results of the objectives.
A less SMART objective might be: Continuous performance awareness briefing for all employees. Example: Well written objective Conduct at least 3 briefing sessions by November 2009 with a minimum of 80% results reflected in the assessment form.
Alternative way to state the objective: _________________________________________________ _________________________________________________ _________________________________________________ _________________________________________________ _________________________________________________
Performance Ratings
Rating 1 : Performance significantly below expectation => Not achieved Objectives are not met and the person is not responding to Training, Development or Coaching. A decision on future employment is required.
Rating 2 : Opportunities for further improvement exist => Partially achieved Objectives are met but does not use the competencies to the required standard. Does not meet all objectives but works hard to use the competencies.
Rating 3 : A well rounded and solid performance => Fully achieved All objectives are met and the competencies are used to the required standard. Rating 4 : An excellent performance => Partially exceeded All objectives are met and some are exceeded as the competencies are used to a high standard. Rating 5 : An exceptional performance => Significantly exceeded All objectives are significantly exceeded and the competencies used to a very high standard on a regular basis. The person takes on initiates / new objectives during the year which are also met.