The basic approach of the balanced scorecard case study management system is outlined for a hypothetical company. It can help to align bigger-picture goals with individual employee objectives.
Typical performance management focuses on monitoring tasks, and then managing them – or taking action – whenever the tasks diverge from what is expected. For example, if an employee suddenly does not fulfill his quota, then management will be sure to take admonitory action. But it is actually equally important to be able to articulate an organizational strategy, and also communicate this strategy to the entire organization. This is where the balanced scorecard system can help, and here we consider a hypothetical balanced scorecard case study.
Let us consider, for instance, the ACME Company. The director notices that their HR performance management system is not quite up to par, and would like to improve this. Having heard of how the balanced scorecard system has been implemented successfully in other organizations, the director becomes curious and would like to know how the system could help his company.
The first and crucial step is, as mentioned above, to be able to articulate an organizational strategy. That is, senior management should be able to agree upon a corporate destination, or in other words, where they want the organization to eventually be. In this case, the director, and the board, and senior managers should be asked to come up with a well-defined picture of the future of the ACME Company. This usually takes the form of a few pages of meaningful, specific statements. This step is necessary in order to build a consensus, and this agreed-upon destination will also be used in succeeding steps.
The next step would be to decide upon the organization’s priorities. In what is called a Strategic Linkage Model or SLM, the objectives that have been agreed upon, as well as the causal relationships between these objectives, are documented. This step identifies the few strategic activities to be focused upon, and the key strategic outcomes that the organization desires. In effect, this step localizes the broader strategic objectives outlined in the first step.
The next step is then the communication of these strategies to the organization, or what can be called cascading the corporate organizational strategy. In this step, the objectives are further refined and specified to become applicable to individual departments within the organization. For instance, the specific strategic objectives for the manufacturing arm of ACME would be quite different from those for the marketing arm, or the research and development arm.
And finally, the last step is selecting personal objectives. This step is the most specific of all, and involves working with individual employees in order to help them draw up their own objectives in line with the organization’s objectives. Questions that may help employees come up with specific objectives include: is this a business or development objective? Is this an activity or outcome objective? What corporate objective is being supported here? How can this objective be measured?
In this short balanced scorecard case study, the basic philosophy of the approach is already illustrated. From the most general and fundamental organizational goals, the process goes through successively smaller and more specific parts of the organization, until it reaches the individual employees themselves.