Group 2

Badey Gilang, Indra, Ivan Subianto, M.Danil Daud,

Ratno Paskalis, Tania N.R.

Verizon Communication, Inc.:

Implementing a Human Resources

Balanced Scorecard

Background Telecommunication Act of 1996: Aimed to get telephone,

cable and internet companies to compete each other’s

market

Companies were pursuing both horizontal and vertical

integration;

In order to achieve greater economies of scale

Offer customer one stop shopping for variety of

telecommunication services

Verizon

Bell Atlantic

Nymex

GTE Verizon

Baby Bells company

Largest independent

phone company in US

• One of major telecommunication company

• Largest local phone company in US

• Largest wireless phone company

• Annual revenue:$60 billion

• 260.000 employee

Major Problem in

Telecommunications companies in

US Customer Turnover

23% of long distance telephone customers

35% of wireless phone customer

Employee turnover

Average 20-30% a year

Quality of services decline

Employee giving inaccurate information

Slow to complete service order

Insensitive to different ethnic group

Smaller telecom companies offer superior customer services as a competitive advantage

HR Issue at GTE HR Activities: around Hiring and Training

HR Dept. considered simply “ cost”

There wasn’t any real system in place for performance

measurement

Company Investing about $75 Million a year to train

employee:

Higher productivity?

Quicker cycle times?

Greater Sales Growth ?

Balance Scorecard

A conceptual framework for

assessing an organization’s

performance not only in terms

of financial measures but also in

terms of non financial measures

Financial Measures: Lagging

Indicator

Non Financial Measures :

Leading Indicators

Measure driver of the company

future success/failure (quality of

product, motivation and skill of

employee, efficiency of internal

processes, customer satisfaction)

HR Balance

Scorecard

Strategic Perspective

Operational Perspective

Financial Perspective

Customer Perspective

GTE’s HR Strategic

Framework •Five Strategic thrust Strategic

Framework:

•Question

• Issue

•Assessment Measures

•Establishing a target for each measure

•Weighting the measures

Indexing

•Communicate result of the balance scorecard

•Current performance vs. target

Communicating

•Quarterly review of measurements

Review Process

Linked Data; to drill down the root causes

Other Computer Files; online tutorial

Strategic Perspective

Operational Perspective

Financial Perspective

Customer Perspective

Benchmark

Trend line or projection of internal data

GTE’s Five Strategic thrusts

GTE Strategy

Talent

Leadership

Customer services and

support

Organizational Integration

HR Capability

“to profitably offer a complete bundle of

high-growth telecommunication services

in a rapidly changing environment”

Financial Payoff “ Scorecard would ultimately provide a fairly close link to

company profitability “

Reducing the Separation rate; by reducing the churn/

turnover by 1% the company would save about $ 23.6 M

Reducing the absence Rate; by reducing absence rate 1%,

the company would save about $200 M

The General trade off issue; Balancing the expenses of certain

HR initiatives with the related benefit.

Other Linkage

(Organizational effectiveness)

Improvement Employee Engagement Index (EEI)

Improvement in Internal quality

Improvement in Customer Services Indices (CSI)

Improvement in Company Market Share

Driving operational excellence

respond effectively & sincerely during critical

event

Seek pattern of behavior that lead to in ingenuity (aids in coping difficult situation)

Employee

engagement

&

commitment

Drivers of Engagement

* Employee perceptions of job importance

* Employee clarity of job expectations –

* Career advancement/improvement opportunities –

* Regular feedback and dialogue with superiors –

* Quality of working relationships with peers, superiors, and subordinates -

* Perceptions of the ethos and values of the organization -

* Effective Internal Employee Communications -

* Reward to engage -

Link to Compensation The result of balance scorecard affected the compensation

for employee; higher score, higher benefits

Scorecard growth accountability, especially HR Dept.

Thank you