Balanced Scorecard

Balanced Scorecard

BALANCED SCORECARD 6

Balanced Scorecard

Walden University

June 17, 2018

Balanced Scorecard

According to the Society for Human Resource Management (2015), a balanced scorecard involves one of the management systems that is utilized to bring success in many businesses today. It involves a way in which the managers of organizations focus on the strategic goals of their organizations. Managers who have adopted this system in their operations have been able to make the right decisions in achieving their goals. The system ensures organizational effectiveness and leads to organizational general growth and success. In this paper, we will identify the concept of balanced scorecard and how it is used while looking at Google, INC. as an ideal organization for the use of this principle.

Balanced Scorecard and Google, INC.

Balanced scorecard allows organizations to focus on the short-term that the firm is standing on (SHRM, 2015). It aims at looking at the strategic measures in the company in order to strike a balance in terms of performance. Some studies have shown that firms that utilize balanced scorecard system are likely to outperform those companies lacking formal approach to strategic performance management like Google, INC (Annual Report, 2018). Google uses different internal and external metrics. According to the 2017 Annual Report (2018), Google’s external metrics tend to focus on revenue, net income, gross income, market share, share price and financial ratios, but when a shareholder examines the organization, they tend to focus on revenue, income and share price. In dealing with the internal metrics, Google looks at its efficiency in brand awareness, or more importantly, examine how its turn over its accounts receivable that provides indicators that the company internal business process is running smoothly (Annual Report, 2018). However, Google uses scorecard to direct its resources in achieving objectives and creating a shift in strategy that will result in sustaining a competitive advantage in the market. By using a balanced scorecard, Google has managed to excel in all of its metrics (Annual Report, 2018).

Human resource departments use the balanced scorecard as a powerful framework for building and communication in the organizations (SHRM,2015). The system helps the managers think to visualize about the cause and effect relationships between separate strategic objectives in the company. This system of management assists managers when mapping their projects and initiatives to different strategic objectives which ensure that the projects and initiatives are focused on delivering the most strategic objectives. Google’s HR department has to linked metrics to the overall strategy. According to Chavan (2009), managers who employ the balanced scorecard in their organizations can easily align their organizational structures with the strategic objectives. They will also use the tool to guide the design of performance reports and dashboards. The human resource managers use the balanced scorecard system to align some of the important organizational processes, for example, risk management and budgeting thus creating a truly strategy-focused organization (Chavan, 2009).

Routine Human Resource Metrics

Human resource metrics are indicators that allow the human resource department to monitor and measure performance on various aspects and they predict the future. There are several types of human resource metrics that include the human resource metrics in recruitment, the human resource metrics related to revenue and other human resource metrics, like the cost of human resource per employee and the ratio of human resource professionals to employees. According to the Annual Report (2019), Google’s HR department focus on innovation and providing better services than any other competitors. The different tactics and strategies of the HR department links the each element of the balanced scorecard. Examples of human resource metrics in recruitment include time to hire which is in days, cost per hire, early turnover and time since last promotion.

Human Resource Strategy Metrics

Human resource strategy metrics show some opportunities for improvements in terms of how the human resource department is providing support to the business and meeting the needs of the employees. Human resource strategic metrics include employee satisfaction, turnover costs, quality of hire, turnover rate difference between high and low performers and the employee evaluation rating compared to salary. Google understand and analyze employee satisfaction to improve engagement and business performance. When organizations measure the employee satisfaction, they are able to take the necessary steps to increase the satisfaction and this is essential for attracting and retaining high-quality talents needed to drive a successful business.

Human Resource Organizations Oversight Metrics

The human resource department oversight metrics are used mainly for supervision, management and administration purposes in the organization. These metrics usually are used by an independent group or committee who oversee some of the things in the organization, for example, the performance. They evaluate the performance of some of the things being carried out in the organization in order to ensure growth and success in the company. Some of the Human resource organizations oversight metrics include attrition rates, engagement levels, productivity levels and customer satisfaction. As for Google, INC., it continues to growth by being innovators in the market. Google has built its reputation as one of the best companies to work for with high prestige.

Incorporating the human resource metrics in the scorecard helps an organization meet its objectives through various ways, for instance, it helps in determining the competency gaps existing in a company and provide relevant training opportunities to ensure that each department has all the necessary resources to execute its priorities. Human resource metrics helps the management ensure that the department remains on-target with its chosen strategy. The organization is also able to adequately plan for its future.

Appendix C

HR Balanced Score Card for Google

Metric**

(Name of Metric)

Formula

(Numerator/Denominator)

% Met or Exceeded*

HR Routine Metrics 1.Recruitment metrics
2.Revenue metrics
3.Other metrics for example, the cost of human resource per employee
AHROP

HR Strategy Metrics

1.Employee satisfaction
2.Turnover costs
3.Quality of hire
4. Employee evaluation rating compared to salary
HR Organizational

Oversight Metrics

1. Attrition rates
2.Productivity levels
3.Customer satisfaction

References

Chavan, M. (2009). The balanced scorecard: a new challenge. Journal of Management Development28(5), 393-406.

Google, INC. (2018) 2017 Annual Report. Retrieved from https://abc.xyz/investor/pdf/20171231_alphabet_10K.pdf

Society for Human Resource Management. (2015). Scorecard: How can the balanced scorecard be applied to human resource management. Retrieved from https://www.shrm.org/resourcesandtools/tools-and-samples/hr-qa/pages/howcanthebalancedscorecardbeappliedtohumanresources.aspx+&cd=1&hl=en&ct=clnk&gl=us


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