Verizon Communications, Inc: Implementing a Human Resources Balanced Scorecard

Verizon Communications, Inc: Implementing a Human Resources Balanced Scorecard

By : Yunus Arie Wiratama Rieke Fitri YuniarJoseph Enrico PramadonaRachmi Rida Utami

By : Yunus Arie Wiratama Rieke Fitri YuniarJoseph Enrico PramadonaRachmi Rida Utami

Customer and Employee Turnover

Customer and Employee Turnover

Increase of Employee turnover (20% – 25% a year)

Customer Turnover : 23% of long-distance telephone 35% of wireless phoneThe complaints were Employees giving out inacurate information Being slow to complete service orders Being insensitive to different ethnic group

The Value of EmployeesBecause it is not to contribute to the company whereas the budget for HR department is high, the Balanced Scorecard was established.

Increase of Employee turnover (20% – 25% a year)

Customer Turnover : 23% of long-distance telephone 35% of wireless phoneThe complaints were Employees giving out inacurate information Being slow to complete service orders Being insensitive to different ethnic group

The Value of EmployeesBecause it is not to contribute to the company whereas the budget for HR department is high, the Balanced Scorecard was established.

Balanced ScorecardBalanced Scorecard

Tool for assessing an organization’s performance.

Measures financial and non-financial.

prompted by a changing business environment.

Tool for assessing an organization’s performance.

Measures financial and non-financial.

prompted by a changing business environment.

GTE’s Strategic FrameworkGTE’s Strategic Framework

MeasuresMeasures

A group was then formed within the HR department to translate these strategic thrusts info a meaningful measurement model.

The group was supported by an “HR measurement core team,” which consisted of a number of functional experts from the department.

Initially the business presidents thought that the Balanced Scorecard was a good idea but they weren’t confident that HR could come up with a model that work

A group was then formed within the HR department to translate these strategic thrusts info a meaningful measurement model.

The group was supported by an “HR measurement core team,” which consisted of a number of functional experts from the department.

Initially the business presidents thought that the Balanced Scorecard was a good idea but they weren’t confident that HR could come up with a model that work

The measures were organized into four “perspectives”:A strategic perspectiveA customer perspectiveAn operations perspectiveA financial perspective

In addition to the inclusion of the non financial measures, the balanced scorecard is also useful because it is simple (one page), including both leading and lagging indicators, focuses on the drivers of success, and is linked to strategy.

The measures were organized into four “perspectives”:A strategic perspectiveA customer perspectiveAn operations perspectiveA financial perspective

In addition to the inclusion of the non financial measures, the balanced scorecard is also useful because it is simple (one page), including both leading and lagging indicators, focuses on the drivers of success, and is linked to strategy.

IndexingIndexing

The Scorecard was designed to enable HR department to combine the performance measures into summary, quantitative results by:-Establishing a “target” for each measure.-“Weighting” the measures.

The Scorecard was designed to enable HR department to combine the performance measures into summary, quantitative results by:-Establishing a “target” for each measure.-“Weighting” the measures.

CommunicationCommunication

Linked data Allowed people to look at data from the top down or

from the bottom up HR manager can know about was contributing to

performance results on a certain summary measure, could access the report online and “drill down” to find the root causes within specific business activities or geographic areas

Other computer filesHr departements worked with the Information Technology depart to develop a few computer file, combining video and audio materials, make the essential purposes and workings of the Balanced Scorecard easy to grasp.

Linked data Allowed people to look at data from the top down or

from the bottom up HR manager can know about was contributing to

performance results on a certain summary measure, could access the report online and “drill down” to find the root causes within specific business activities or geographic areas

Other computer filesHr departements worked with the Information Technology depart to develop a few computer file, combining video and audio materials, make the essential purposes and workings of the Balanced Scorecard easy to grasp.

Review ProcessReview Process

Financial PayoffsThere was a direct relationship between performance of non-financial measures and financial outcomes. This relationship was consist of:-Reducing the separation rate.-Reducing the absence rate.

Financial PayoffsThere was a direct relationship between performance of non-financial measures and financial outcomes. This relationship was consist of:-Reducing the separation rate.-Reducing the absence rate.

- Other linkages in “people issues” in “Organizational Effectiveness”.

The study show about improvement in:-Employee Engagement Index-Customer Service Indices

- Other linkages in “people issues” in “Organizational Effectiveness”.

The study show about improvement in:-Employee Engagement Index-Customer Service Indices

Link to CompensationLink to Compensation

Incentive compensation related to financial and non-financial performance.

HR have the accountability of the actual business’ performance.

Incentive compensation related to financial and non-financial performance.

HR have the accountability of the actual business’ performance.

SuggestionSuggestion