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SUMMER TRAINING PROJECT PRESENTATION ON

“ STUDY OF HR SCORECARD ” AT

MAGMA FINCORP LIMITED, LUCKNOW

Mentored By-Mr. Afroz Jamal AkhtarSr. Manager HR(UP Zone)

Presented By-Jaziba Haroon Siddiqui2014MBA-28

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PRESENTATION FLOW

• Company Profile• Objective of the study• Research methodology• Introduction to HR Scorecard• Origin of HR Scorecard• Why HR Scorecard• Benefits of HR Scorecard• Developing HR Scorecard• HR Scorecard at Magma• Graphical representation• Findings• Business HR Goals 2015-16• Recommendations• Conclusion• Limitations• References

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COMPANY PROFILEMore than 8000

magmaites

Founded in 1989

Total asset managemen

t of 160 billion rupees

To excel in retail financing and to

become a market leader in the same

235 branches across India

More than 26 years

Present focus on boosting the sales of

tractors

Magma loansMagma housing financeMHDI

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OBJECTIVE OF THE STUDY

1) Understanding HR Scorecard2) Study HR Scorecard of Magma Fincorp

Limited .3) Understand HR Scorecard terminology.4) Develop an improvised HR Scorecard for

the organisation as recommendation.

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RESEARCH METHODOLOGY

• Research DesignMainly Descriptive because largely involved study of previous HR scorecards and its respective analysis, assisted by Exploratory because data was collected for the HR Scorecard of 2014-15.

• Type of data usedThe data used is primary as well as secondary. The primary data includes information collected from different HR heads of different zones.The secondary was collected from LAN of the company, research papers, websites & literature on HR Scorecard.

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“We can’t manage something that we can’t describe. Measurement is the language used to describe organisation &

strategy.”

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HR (Human Resource) SCORECARD

It is a tool & system required for leading a managed “HR architecture”. It is a performance management toolIt is a strategic planning and management system (not only a measurement system)

Financial Performance (revenues, return on earnings, cash flow)

Customer value Performance(market share,

satisfaction, loyalty)

Internal BusinessProcess Performance(timeliness,

productivity rates, quality measures)

Employee Performance(morale,

knowledge,turnover,best training practices)

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ORIGIN OF HR SCORECARD

Organisations have been tracking progress by employing a mix of financial & non-financial measures.

General Electric work on performance measurement in 1950s. Work of French process engineers creating a “dashboard” of performance

measurement in the early 20th century. Art Schneiderman in 1987 created one such system. In 1990, Schneiderman worked in conjunction with Dr.Robert S.Kaplan &

David P. Norton & during his study described his work on Performance Measurement.

In 1992, many articles were published on BSC but Robert S .Kaplan’s (HBS) & David P. Norton’s idea of HR Scorecard as HBR article was a popular success.

In 1996, Kaplan & Norton published a book “The Balanced Scorecard” which made them as the creators of the concept of BSC.

In 2000, Kaplan & Norton came up with their second book “The Strategy Focussed Organisation” Subsequent writings of the authors emphasised on the use of HR Scorecard than its design.

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WHY HR SCORECARD…

In a 2002 industry survey by SHRM…

• Only 34% of executives view HR as a strategic partner• Only 44% of respondents indicated that their organisation

communicates its strategy well• Only 22% indicated that general employees understand

company’s strategy• 21% indicated that HR only deals with operational issues

vs. strategic ones• Only 23% indicated that HR strategy was tightly integrated

with company strategy• Only 25% of HR departments use a balanced scorecard on

HR’s contribution to strategy

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BENEFITS OF HR SCORECARD

1. It reinforces the distinction between HR doables & HR deliverables.

2. It enables to control cost & create value. 3. It measures Leading indicators.4. It assesses HR’s contribution to strategy

implementation &, ultimately to the “bottom line.”

5. It lets HR professionals effectively manage their strategic responsibilities.

6. It encourages flexibility & change.

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RECIPIE FOR HR SCORECARD

• Define/Describe your Business Strategy

• Develop a strategy map

• Identify key components of the HR Architecture that support the HR Deliverables

• Develop the HR Scorecard

• Identify the high leverage HR deliverables

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HR SCORECARD AT MAGMAMagma came up with its first HR Scorecard seven years back in 2009.Metamorphosis of HR Scorecard at Magma.

Terms used in HR Scorecard of Magma

1. Key Result Areas (KRAs)- These are the areas in the individual’s job where results need to be achieved.

2. Key Performance Indicators (KPIs)- A performance indicator or KPI evaluates the success of a particular activity in which it is engaged.

3. Measurement Criteria (MC)- Are the scale against which KRA or goal achievement is to be measured.

4. Weightages to KRAs- These are assigned to KRAs to communicate the importance & prioritisation of the goals. They are expressed in %.

Flowchart for KRA and KPI setting

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1. Fill Rate2. Turn Around Time (TAT)3. Compliance4. Qualitative

KRAs & THE RESPECTIVE ASSIGNED WEIGHTAGES

KRAs OF TALENT ACQUISITION SCORECARD

S. No. Parameters Weightage (%)1 Fill Rate 35

2 Compliance 35

3 TAT 20

4 Qualitative 10

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DISCUSSION OF KRAS

1. Fill Rate- Formula & illustration for calculation of Fill Rate

2. TAT Met-formula for calculating TAT.docx & illustration for calculation of TAT

3. Quality Hiring- Quality Hiring has no such formula for calculation but is maintained & judged on the basis of KRAs & Rating scales listed in the link. Evaluation

4. Compliance- Evaluation of compliance

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KPIs for KRAs. Table of KPIs for KRAs of TASTable 3: RATING MODEL

The above table shows that what will be the ratings given to the Talent Acquisition department for each KRA. If the target achieved is par excellence then rating of FEE is given, if the target achieved a little excess then rating of EE is given, if the target is equal to the marks set then rating of ME is given, if the target achieved is little less than the set marks then rating of BE is given & if the difference between the target achieved & the set marks is quite large then rating of FBE is given. Link : Illustration for calculating cumulative score

Ratings Abbreviated   Rating Score

FEE Far Exceed Expectation 5EE Exceed Expectation 4ME Meet Expectation 3BE Below Expectation 2FBE Far Below Expectation 1

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KRAs OF BUSINESS HR SCORECARD

1. Induction & On-boarding2. Regional Leadership Team (Content & Quality) RLT(C&Q)

and RLT-TAT( Turn Around time)3. Branch Visits (BV) 4. Impressions received (Impr.)5. Performance Improvement Plan (PIP) Tracker+

Confirmations (Conf.) pending+ F&F (Full & Final) Pending6. Attrition7. Retention8. Employee Engagement9. Sensing & Fraud Control ( Staff Governance/Disciplinary

issues)-

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KPIs for KRAs of BHRS 2014-15

The table in the link shows the KRAs, KPIs and their weights for BHRS 2014-15. KPIs for BHRS

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BHRS 2014-15 SCORING GRID

In Magma, the KRAs of Business HR Scorecard are divided into slabs depending on which they are given scores. These scores signify the level of work done or target achieved. The following KRAs with their respective scores are given below in the link. BHRS scoring grid

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REGIONAL BHRS 2014-15

Regional BHRS 2014-15 shows the scores of various branches of Magma on various KRAs. It also shows their previous ranking for 2013-14 as well as the current ranking for 2014-15.Refer to the table in the link.

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GRAPHICAL REPRESENTATION OF BHRS (Jan-Feb-Mar) 2014-15

The scores of various KRAs of BHRS 2014-15 were plotted on graphs and their combined scores were calculated for different zones so that performance of each zone can be calculated for each KRA.

At the end all the scores for each zone was summated in order to rank the zones.

A comparative study of the zones for various KRAs was also carried out graphically for the years from 2009-2014.

Magma’s HR department’s performance was compared for 2013-14 & 2014-15.

Refer Link . Graphs for Regional BHRS(Pg. 41-64)

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FINDINGS

1. There was a five point drop in the score of induction. Thus, it was concluded that HR dept. has proved inefficient on this KRA, which is a matter of discussion.

2. The number of branches visited by the HR professionals increased from 42 to 78 which was remarkable.

3. A decrease in the score of RLT(C&Q) indicated the carelessness of HR dept.

4. A mark up in the score of RLT(TAT) can be inferred as regular meetings being organised & attended by the HR professionals.

5. The scores for confirmations pending increased by 14 points which is good.

6. There was a six point dip for impressions received parameter, which shows lesser number of feedback from employees joining at & above area manager. Cont..

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7. Employee engagement increased by 10 points which is good for Magma.8. There was a two point increase in the scores of attrition which indicates that HR professionals have controlled attrition to a little or greater extent.9. The scores of retention are more or less same for 2013-14 & 2014-15.10. The staff governance scores raised which is indicative of good administration.11. The overall performance of Magma’s HR dept. has increased by 8 points. Link. Inferences(Pg.65-67)

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BUSINESS HR GOALS(BHRG) 2015-16

The HR management team at Magma introduced a new HR Scorecard in June 2015. This scorecard is now being implemented in Magma.KRAs for BHRG 2015-16

1. Quality Staffing2. On-boarding Employees successfully-Induction & creating

wow factor3. Enabling performance- drive a positive performance culture4. Developing talent for the future – build talent pipeline, retain

good talent5. Creating the right culture – Culture of pride & satisfaction6. Manage wage costs

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Link. KPIs for KRAs of BHRG 2015-16 (Pg. 69-73)

Link. Scoring grid for BHRG 2015-16 (Pg. 74-76)

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RECOMMENDATIONS

• Magma should separate its HR Doables form HR Deliverables.

• Magma may include some of the efficiency measures listed below .jaziba's project final.pdf Link HR Efficiency (Pg 77)• Benefit costs/Competitor’s benefit costs ratio• Cost of HR related litigation• HR Expense to total expense ratio• Selection Ratio• As Magma, has mentioned ENGAGEMENT

EFFECTIVENESS in its HR Scorecard (2015-16) so it must measure employee engagement effectiveness by Chi-square Test. Link sbi bsc

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3. Some HR performance drivers which can be incorporated are: Degree of financial literacy among employees Diversity of race & gender by job category The ratio of HR employees to total employees Trace reasons for Turnover Should place each turnover in the four distinct categories mentioned below:

Undesirable Controllable (Average to high performing employees leave,& the firm

missed an opportunity to keep them.This is "bad"

turnover.

Desirable Controllable (Low performing

employees leave, with your assistance . This is

"good" turnover.

Undesirable Uncontrollable (Average to high performing

employees leave, but the firm had no control over the

situation. This type of turnover is unfortunate, but it is also

unavoidable.

Desirable uncontrollable (Low -performing employees leave by their

own choice. This is also "good" turnover; however , in this category

the firm was not aware of the employees' intentions or their

performance levels & thus had no control over the departuress.

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• Can use the Becker-Huselid approach for calculating the economic value of high & low job performer.

• Performance level can be indicated as toggle in their appraisal form as good, satisfactory & unsatisfactory.

• Recommended BALANCED HR SCORECARD 2015-16 (Pg. 81)

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CONCLUSIONDesigning a single Scorecard for any organisation is a

very difficult task. Magma, being a financial service organisation, design & implementation of the HR Scorecard, becomes not only difficult but complicated as well. Still, it emerges to be useful all-inclusive tools, encompassing various aspects of financial performance. Magma introduced the HR Scorecard one & a half years back when most of the organisations have already gained experience in this domain, thus it’s a high time to continuously improve its HR Scorecard & ensure that it is implemented at its best by the employees of the company. In addition, Magma may draft an Employee Scorecard as well as the HR Department deals with the human capital of the organisation.

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LIMITATIONS

The terminology used in the subject was highly technical in nature.

Time constraint was a hindrance.Confidentiality of management was the strongest hindrance

to the collection of data & scientific analysis of study.The BHRG 2015-16 was not properly explained as it was

newly introduced in the HR department, thus only its design & superficial explanation was provided.

The exact strategy for each department was not disclosed by any employee.

The HR department is yet to understand the criticality of Balanced HR Scorecard.

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REFERENCES www.magma.co.in www.slideshare.com

http://www.slideshare.net/gihanaboueleish/hr-scorecard-11190317?related=2

Becker Brian E, Huselid Mark A., Ulrich Dave, “The HR Scorecard- Linking people, strategy and Performance” ,Harvard Business School Press, Boston, Massachusetts

Dr.Dave Sagar R, Dr.Dave Swati R, “Applying Balanced Scorecard in Indian Banking Sector: An Empirical study of the State Bank of India” Pacific Business Review International, Volume 5 Issue 6(December 2012)

Panicker Sunita, Seshadri Vinita, “Devising a Balanced Scorecard to determine Standard Chartered Bank’s performance :A Case Study “ International Journal of Business Research & Development “, Vol 2 No. 2, p.35-42 (2013)