3. Balanced Score Card and Recommendations The BSC is based on the theory that i

Question

3. Balanced Score Card and Recommendations The BSC is based on the theory that improving non-financial performance in the current period improves financial performance in the future. Examining the proxy statements from your company and those of your two benchmark companies, what types of non-financial performance (if any) are mentioned? Design a BSC addressing at least one type of performance goal for each of the four perspectives: financial, customer, operations, human resources (feel free to add more). Provide an explanation how you would measure each of these goals and why these goals are important to consider in the CEO’s compensation contract. Finally, provide a brief assessment about the adequacy of the company’s current compensation practices and make suggestions about how to improve these practices. - current analysis on toyota

Explanation / Answer

Balance scorecard is a performance appraisal and monitoring metric , which lays equal and more emphasis on non-financial performance, towards the goal to financial milestones.It aligns all business activities without any exception,to the vision and mission of the organisation- an all-round balanced approach to strategise management techniques,

In the financial perspective, profits can be improved by concentrating on revenues and also by cutting or optimising costs.

In the customer perspective,focus and stress should be on the areas of customer satisfaction- by conducting studies on their demand patterns and striving to meet them.

Thirdly, we can concentrate on our operating processes - a sort of self-analysis- to deliver the best to our customers.

Next, is the most important capital of any organisation- ie. human capital- by nurturing and furthering the human resource available to the firm- will improve all areas of the organisation- which is the main objective of the BSC- not only for today but also prepares them for the future.

Similarly, many areas ,within the above said four can also developed in this BSC method, if perfection of the technique needs to be achieved.

More than just monetary compensation, promotion aspects, job content and satisfaction, scope for further knowledge- enrichment, space for personal development and innovative nature, freedom of expression of right things, recognition , well-ness programs, care for the family -all these practices will make a well balanced scorecard in the area of personnel or human resource management.

As the name suggests, CEO is the Chief Officer responsible for Formulation as well as Execution of policies in all the above said areas such as finance,customer-relations,operations and human resources, it is only logical and justified to link and consider the level of attainment of these goals in BSC analysis- to the CEO's compensation contract.

Giving him the broader goal, and allowing him to formulate his own strategies in each of the above areas, and adequately compesating him for the balanced achievement- considering all the above said points for employee welfare- will help him to understand the nuances of the trade , and grow alongside the company-so as to deliver what is best for the organisation.

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