Balanced Scorecards, Competencies and Compensation

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

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

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

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

19. Scorecards and Dashboards • Basic dashboard • Electronic dashboard

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

24. Competencies “Fit”

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

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

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

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

31. 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

32. 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

33. 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

34. 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

35. Business Strategy Business Results Competency Framework

36. Professional Associations

37. Risk and Insurance Management Society

39. Government

41. Education

42. What’s missing?

43. Private Sector

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

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

47. 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!!!!

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