The balanced scorecard is an approach to strategic management that was developed in the early 1990s by Drs. Robert Kaplan ( Harvard Business School ) and David Norton. The basic concept is that organizations need to balance financial measure, which are often a dominant concern, with other factors that are critical to success. In the Kaplan & Norton model, these other areas included customers, business processes, and learning and growth.
Organizations that apply the principles of balanced scorecard management often find that their metrics for the “people dimension” of their systems are difficult to operationalize. Often, the easy numbers to collect are not as useful strategically, such as new-hire rates, overtime hours, training hours spent, etc. ISR can help you to develop more effective strategic measures, such as an overall index of employee engagement.
We worked with a financial services company to add an employee-satisfaction component to a balanced scorecard that already included metrics capturing financial performance, customer satisfaction, and operating efficiency. The purpose of the ISR-designed employee scorecard measure was to detail actionable steps that senior managers could take to pursue three goals: attracting and retaining top talent so as to become an employer of choice, enhancing customer focus, and improving employee understanding and execution of business strategy. Figure 1 (below) shows the specifics of the resulting balanced scorecard.
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