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Balanced Scorecards, Competencies and Compensation

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.

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Balanced Scorecards, Competencies and Compensation

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  1. Balanced Scorecards, Competencies and Compensation November 3, 2011

  2. Financial Measures • What are they? • Problems with them? • Knowledge workers

  3. Strategy • CEO failures due to………. • Poor strategy? • Poor execution/implementation of strategy? • So, which one is it?

  4. Balanced Scorecard • Overcomes • Limitations of financial measures • Need to account for knowledge workers • Critical need to execute strategy

  5. Balanced Scorecard • Overcomes • Limitations of financial measures • Need to account for knowledge workers • Critical need to execute strategy

  6. Balanced Scorecard • Starting point • Organization’s strategy • Translate into objectives and measures

  7. Balanced Scorecard – 4 perspectives • Financial • Customer • Internal business process • Learning and growth

  8. Balanced Scorecard – 4 perspectives • Financial • Traditional component • Measures • Revenue growth • Cost reduction • Productivity improvement • Asset utilization

  9. 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

  10. 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?

  11. 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

  12. 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?

  13. 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?

  14. Example

  15. Balanced Scorecard • Pro’s • Organizational alignment through shared vision • Short-term and long-term balance • Focuses the organization

  16. Balanced Scorecard • Con’s • Complex!!! • Communication is a must

  17. Balanced scorecard • Chapters 4, 5, 6, 7, and 8

  18. Scorecards and Dashboards • Basic dashboard • Electronic dashboard

  19. Job Requirements • A • B • C • D • E KSA

  20. Competencies “Fit”

  21. New Day for KSA • Knowledge • practical or theoretical understanding of a subject • described in terms of mastery levels • Skills • Learned capacity • Ability • Natural capacity

  22. Competency • Combo of KSA that can be observed, measured, evaluated • Is a key factor in successful job performance • Focus is behavior Competency

  23. Competency • KSA • Observable behavior • Job performance Competency

  24. Competency Models/Frameworks • Definition • More “occupation” than “job” • Management, technical, knowledge • Vary by “job” type • Professional positions • Clerical/administrative positions • Managerial positions

  25. 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

  26. 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

  27. 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

  28. 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

  29. Business Strategy Business Results Competency Framework

  30. Professional Associations

  31. Risk and Insurance Management Society

  32. Government

  33. Education

  34. What’s missing?

  35. Private Sector

  36. Competency Modeling • http://www-05.ibm.com/employment/hu/ibmhu/career.html

  37. But which competencies? Review strategy Identify competencies Competency Model/framework Review strategy

  38. 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!!!!

  39. Now and later use…… • http://www.job-interview-site.com/examples-competency-based-interview-questions-list-of-competencies-skills.html

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