What is the most common mistake in implementation of balanced scorecard system? As in any business venture, it is especially dangerous to make the wrong steps in BSC implementation. This is exactly like building a house with a poorly build foundation. Sooner or later such a house will collapse, there is no doubt about it. So there is no reason to further construct such a house.
The same applies to implementation of balanced scorecard. If the initial steps are wrong the entire process will be a complete failure for business owners and top managers. What are initial steps of BSC implementation? Of course, everything starts with goal setting. Balanced Scorecard is a strategic management tool. It links operational in strategic management in order to track company progress on the way to implementation of strategic goals. In other words, it puts strategy into action and visualizes strategic vision of the company. Of the evaluation process is conducted through measurement of key performance indicators which have the greatest impact on key success factors in a definite business area.
Thus, if certain mistakes were made at the goal setting stage there a very few reasons to believe that implementation of balanced scorecard will be a great success. Just to the contrary, unsuccessful implementation of balanced scorecard will result in loss of time and money (sometimes really huge money).
When designing balanced scorecard for human resource department, it is imperative to set strategic goals in this direction. Moreover, HR goals should 100% compliant with the general strategy of the company, its mission and values. Sometimes, local and strategic goals of human resource management conflict with the company strategy.
It should be mentioned that such goals as “earning one million dollars” or “employing the best professionals” of a very vague. They’re nothing to do with reality and with the company mission. So, if we’re talking about human resource management it would be reasonable to talk about such goals as improvement of personnel professional level, decreasing personnel turnover rate, increasing new hires retainment etc.
Each goal should be represented with a several indicators which all together will make a complete picture of HR policy and HR strategy of the company. Of moreover, each goal of human resource management should lead to implementation of strategic goals and improvement of financial results of the company. It is not a secret that any commercial business aims at making money.