Balanced Scorecards, Competencies and Compensation
November 3, 2011
Financial Measures
• What are they?• Problems with them?–Knowledge workers
Strategy
• CEO failures due to……….–Poor strategy?–Poor execution/implementation of
strategy?• So, which one is it?
Balanced Scorecard
• Overcomes– Limitations of financial measures–Need to account for knowledge workers–Critical need to execute strategy
Balanced Scorecard
• Overcomes– Limitations of financial measures–Need to account for knowledge workers–Critical need to execute strategy
Balanced Scorecard
• Starting point–Organization’s strategy– Translate into objectives and measures
Balanced Scorecard – 4 perspectives• Financial• Customer• Internal business process• Learning and growth
Balanced Scorecard – 4 perspectives• Financial– Traditional component– Measures
• Revenue growth
• Cost reduction
• Productivity improvement
• Asset utilization
Balanced Scorecard – 4 perspectives• Customer– How do they see you?– What do they want from us?– Measures
• Market share
• Customer acquisition
• Customer retention
• Customer satisfaction
• Customer profitability
Balanced Scorecard – 4 perspectives
• Internal business processes– Core processes• those that directly impact how we meet
customer demands• Netflix???
–Measures• Depends on what customers demand• Low price?• Variety?
Balanced Scorecard – 4 perspectives• Learning and growth
– Types of capital
• Human capital
• Information capital
• Organizational capital
– Measures
• Employee satisfaction
• Employee retention
• Employee productivity
• Competencies to deliver required results
Balanced Scorecard and Compensation
• Points to consider– Purpose• Overall purpose• Specific behaviours (un)desired• Impact on culture?
– Measures• Are data available?• Are the data accurate?• How many?
Balanced Scorecard and Compensation
• Points to consider– Perspectives (related to measures)• All?• Equally weighted?• Leading or lagging?
– TEXT: hours spent with customers by salespeople
– Long/short-term performance?
Example
Balanced Scorecard
• Pro’s– Organizational alignment through shared vision– Short-term and long-term balance– Focuses the organization
Balanced Scorecard
• Con’s– Complex!!!– Communication is a must
• Balanced scorecard
• Chapters 4, 5, 6, 7, and 8
Scorecards and Dashboards
• Basic dashboard• Electronic dashboard
KSA
Job Requirements
•A•B•C•D•E
Competencies
“Fit”
New Day for KSA
• Knowledge –practical or theoretical understanding of a
subject–described in terms of mastery levels
• Skills– Learned capacity
• Ability–Natural capacity
Competency
• Combo of KSA that can be observed, measured, evaluated
• Is a key factor in successful job performance
• Focus is behavior
Competency
Competency
• KSA
• Observable behavior
• Job performance
Competency
Competency Models/Frameworks
• Definition–More “occupation” than “job”–Management, technical, knowledge–Vary by “job” type• Professional positions• Clerical/administrative positions• Managerial positions
Competency Models/Frameworks
• Behaviors– Customer Focus• Builds/maintains customer satisfaction with products and
services• Focuses on the customer's business results, rather than own• Seeks customer feedback and ensures needs have been fully
met• Delivers products and services when and where the
customer needs them • Explores options when unable to deliver a requested
product or service, and pursues solutions until the customer is satisfied
Competency Models/Frameworks
• Behaviors– Business Alignment• aligns the direction, products, services and performance
of a business line with the rest of the organization• Integrates executive direction into every decision and
consultation• Seeks to understand other programs in the department,
including their services, deliverables, and measures• Advocates for and positively represents other programs
and services when working with customers and stakeholders
Competency Models/Frameworks
• Behaviors– Teamwork• Anticipating potential conflicts and addressing them
directly and effectively• Treating others with courtesy, tact and respect• Working effectively with others, regardless of
organizational level, background, gender, race or ethnicity• Working to resolve disagreements, attempting to persuade
others and reach agreements• Biding by and supporting group decisions• Facilitating team interaction and maintaining focus on
group goals
Competency Models/Frameworks
• Compensation–Matrix• Combo of your “level” of competencies and
position in pay range– “level” of competencies–Basket approach• “level” just one of many factors
BusinessStrategy
CompetencyFramework
BusinessResults
Professional Associations
Risk and Insurance Management Society
Government
Education
What’s missing?
Private Sector
Competency Modeling
• http://www-05.ibm.com/employment/hu/ibmhu/career.html
But which competencies?
Review strategy
Identify competencies
Competency Model/frame
work
Review strategy
How to identify competencies?
• Think in terms of areas of knowledge and abilities
• Analyze “job”• Watch stars perform–What areas of knowledge do you see the employees
using? –What abilities are required?
• Interview stars– superior performance is the norm!!!!
Now and later use……
• http://www.job-interview-site.com/examples-competency-based-interview-questions-list-of-competencies-skills.html
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