The Balanced Score Cards has been around a long time and seems to go through resurgences and corresponding declines over time. There is nothing wrong with the balanced score card approach as a tool but in the modern world of human capital management it is no longer the end program. Today organizations need modern quantitative and integrated programs that recognizes the value of the human resources at all levels i.e. traditional employee relations through to business market capitalization.
A kit-bag of separate non-integrated tools is not going to deliver the human capital management solutions we are seeking. When balanced score card was developed we had a host of personnel programs that were anything but integrated and supportive; these included the performance appraisal (which was enhanced when BSC was introduced), old “job” evaluation that reinforced the incremental system, numerous instant recruitment and selection tools, incentive programs and the list goes on. Other than the fact that this were separate and sometimes conflicting tools, the key drawbacks were that firstly they focused more on what was being done rather than adequately defining what is needed as an ideal contribution or need. Secondly they were not strategically driven, outcome based i.e. they were focused on achieving the activities rather than producing an outcome that contributed to the organization in a defined way. The integrated HCM is often missing and therefore we do not get the alignment between the organizational needs and the people, whether new recruits or existing employees developing along with the changing needs of the organization.
Performance management is about defining the outcomes and then identifying the controllable measures against those outcomes which applies whether we are looking at the strategic direction over the next 5 years or designing a new or changes to an existing position. In designing the positions (contributing elements) an outcome-based-competency approach can be utilized which has three (3) basic steps:
1. Outcomes are defined firstly for each of the key strategic stakeholders and incorporated into the position;
2. The performance measures that measure the success of producing the outcomes are identified – at the strategic level this is the performance framework and below this the performance management system. This is an empowering approach to PMS;
3. Competence (including level of complexity) required to deliver the outcomes at the standard set by the performance measures is established at all levels in the organization. This is a significantly different approach to the activities and tasks that formed the basis for the earlier separate programs.
At this point you can empower employees to manage their own performance and report back so the employee and employer both have a vested interest in having competent people as measured against the competency requirements of the position. Without competent people the organization will not achieve the strategic performance objectives set. We are happy to provide a case study on the effect of competence in the retail sector.