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THE IMPACT OF BALANCED SCORECARD

ON PERFORMANCE PLANNING IN BHEL

Presented By Soumya M.RRoll No: PGDM 10-021DCSMAT Trivandrum

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OVERVIEW

• About the company: BHEL , leading public sector company

(Navaratna), largest engineering and manufacturing enterprise

in India.

• It is the 12th largest power equipment manufacturer in the world.

• 14 units in different parts of the country.

• Hyderabad unit one of main unit of BHEL with 8454Cr turn over.

• The main products are Turbo-generator sets and auxiliaries for

60 and 110 MW thermal utility sets

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VISION

• VISION

•  A World-class Engineering Enterprise Committed to enhancing

Stakeholder Value.

• MISSION

• To be an Indian Multinational Engineering Enterprise providing Total

Business Solutions through Quality Products, Systems and  Services in

the fields of Energy, Industry, Transportation, Infrastructure and other

potential areas.

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BALANCED SCORECARD

• originated by Robert Kaplan and David Norton in 1992.

• It is a framework that translates vision and strategy into performance

measures.

• Creates a balance between all perspective both financial and non-

financial.

• There is a linkage between all the parameters in a balanced scorecard

• There are lag and lead indicators in the Balanced Scorecard

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• How should we appear to our customers? (Customer perspective),

• What should we excel at? (Internal business perspective),

• How should we sustain our ability to change and improve? (Learning

and growth or Innovation and learning perspective)

• How should we appear to our shareholders? (Financial perspective).

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BALANCED SCORECARD ANSWER’S

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CLARIFYING AND TRANSLATING VISON

AND STRATEGY

STRATEGIC FEEDBACK AND LEARNING

PLANNING AND TARGET SETTING

COMMUNICATING AND LINKING

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BALANCED SCORECARD

• Financial perspective: Consists of KPIs like Turn over, Return on capital

employed.

• Customer perspective: Direct orders booked by the unit, Delivery index

of on time .

• Internal processes perspective: Material consumption, completion of

engineering 

• Learning and growth perspective: R ‘n’ D expenditure,

Commercialization of in-house developed products

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BALANCED SCORECARD

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BALANCED SCORECARD IN BHEL

• BSC is a part of E-MAP(PERFORMANCE MANAGEMNET SYSTEM)

started 2002-2003.

• The system covers Frontline Executives(E1-E4) and Middle level

Executives of BHEL(E5-E7).

• BSC is cascaded to various levels, ensuring proper alignment between

the objectives targets flowing from top to bottom.

• 212 BSC holders are there.

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MEMORANDUM OF UNDERSTANDING WITH MINISTRY OF HEAVY INDUSTRY GOVERNMENT OF INDIA

CORPORATE BSC

UNIT BSC

DIVISION PRODUCT BSC

HOD BSC

CASCADING OF BALANCED SCORECARD

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PERFORMANCE PLANNING

• Performance planning is initiated in the month of March upon the

finalization of budget.

• Identify appropriate KRAs from functional KRA Master

• If required, request for new KRAs and seek approval from HOD

• Set five levels of targets for each KRA

• Propose an action plan for achievement of each KRA Target

• Assign a weightage for each KRA

• Resolve any conflicts between Appraisee and Appraiser

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OBJECTIVES

• To know the awareness of employees about the BSC model

• To study the linkage of BSC to performance management system

• To study the various steps involved in framing the BSC

• To study interdepartmental dependencies

• To study the role of BSC in achieving performance targets.

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ANALYSIS

• Awareness: Good ,makes target setting easier.

• The linkage of BSC to performance management : good

• BSC helps to monitor and manage business.

• The unit level BSC is a prerequisite for framing the division BSC.

• Cascading BSC throughout the firm means there are consistent in the

application of BSC.

• Executive involvement is less for the development of divisional BSC.

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ANALYSIS

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•Communication increases the cascading of BSC more effective in the

firm.

•Responsibility identification empowers employees which improves

organizational performance.

•Review of BSC needs to be done. Half yearly.

•Success of BSC depends on organizational culture .BHEL shares a

common culture.

•Success of the balanced scorecard depends on a successful team.

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SUGGESTIONS

• Assigning responsibility to the individuals.

• Action points and needs to be reviewed

• Cascading of level-leads to actionable KPIs.

• Feedback mechanism

• Encourage employee participation.

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CONCLUSION

• Balanced scorecard

• Analysis

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THANK YOU

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