CHANGE STRATEGY

Balancing The Balanced Scorecard

Work Life Balance, Work Life Harmony, Work Life Integration. These are terms that have been around for long and debated on various forums. And yet, individuals and organisations struggle to achieve a realistic balance. However, it is for the organisations to mull whether they are doing enough to bring in balance, integration, or harmony. Different HR processes and policies have been explored to introduce such a change. However, performance management as a process remains unexplored to drive this change. The time is right to move the concept from policy/process manuals to real life, where it actually creates a lasting impact and builds a well-balanced, healthy, happy, and holistic organisation.

 

What gets measured, gets done. Performance Management has been a strong lever to drive organisational objectives. Successful organisations realise that performance management is a critical business tool in translating strategy into results (DDI, 1997). Balanced Scorecard (Kaplan & Norton, 1992) has been one such performance management tool used extensively by many Fortune 500 companies, and other small and large organisations, to draw strategy maps and chart out different metrics to measure organisational and individual performance. Balanced Scorecard has been able to help strengthen performance management for many organisations, and play a role in achieving set objectives for more than two decades. The scorecard incorporates four perspectives- Financial, Customer, Internal Processes, and organisational capacity.

 

1. How do we look to shareholders? (financial perspective)

2. How do customers see us? (customer perspective)

3. What must we excel at? (internal perspective)

4. Can we continue to improve and create value? (organisational perspective)

 

Going beyond traditions

 

The name "balanced" comes from the idea of looking beyond traditional financial measures to encapsulate a more holistic view of performance. When one looks closely at these four perspectives, there is a clear realisation that though these serve the organisation well, they do not take into account the perspective of the individual employee. What about their life beyond the organisation, which has a clear interplay with his work life? A healthy life outside the workplace helps in making life inside more productive. Employees who attain high levels of job and life satisfaction tend to be highly motivated and efficient. The moment we put this lens into perspective, the imbalance of the Balanced Scorecard becomes apparent. Bringing this balance in the long term will also help in enhancing productivity. Managing and organising both the work and life of employees, systematically and strategically, in public or private sector units, have in the long run led to enhanced productivity (Kanthisree, 2013). A scorecard without this balance will hurt the organisation’s performance in the long term.

 

In Quotes “Balanced Scorecard has been able to help strengthen performance management for many organisations and play a role in achieving the set objectives for more than two decades.”

 

The Fifth Perspective

 

In order to bring this balance, it is proposed to bring Quality of Life as an additional perspective.

 

1. How do we improve employees’ life inside and outside the organisation (Employee perspective)?

Or

2. How is an employee living a quality life?

 

Some of the metrics which can be explored under this fifth perspective can be as below:

1. Time spent with family and friends (Relationships)

2. Time spent to follow one's passion/hobbies (Passion)

3. Contribution to society (Social Responsibility)

4. Mental & Physical Fitness (Health)

5.  Joy & Happiness

 

Bill Gates, in one of his blog posts, proposed a readily available 4 Q framework for measuring the quality of life which includes the 4 questions mentioned below.

1. Do I devote enough time to my family?

2. Do I learn enough new things?

3. Do I develop new friendships and deepen old ones?

4. Do the people you care about love you back?

 

Implementation of the fifth perspective will work as an enabler for the individuals and promote a culture of ownership. It will be a good idea for the individuals to decide the metrics for this perspective by themselves, and thereafter, have a mechanism to track and measure these metrics. The idea is to have something concrete on paper, which not only relates to the organisation and its top and bottom line, and at the same time, builds measures which impacts the individual and the society around. Discussions around such measures go a long way in building healthy and happy employees. Workplaces are already struggling with stress and other related issues. This fifth perspective will certainly empower individuals and organisations to weed out such issues. Organisations can no longer afford to keep themselves away from their employees’ lives, instead, they will have to look at better ways to engage actively. This will endow a formal structure and platform to facilitate these discussions around individual life along with work.

 

In Quotes “Organisations can no longer afford to keep themselves away from their employees’ lives, instead, they will have to look at better ways to engage actively.”

 

Further, the fifth perspective, when implemented, provides organisations with an opportunity to communicate the shift in their approach towards taking a holistic view of performance which goes beyond work, and which cares about an individual’s life beyond the organisation. This means a lot of rigour should be involved in building readiness for the perspective and the associated processes, before formally launching it in the performance management process. Building readiness would include brainstorming sessions with leaders and managers in the organisation to take their views and get their buy-in for the process. It would also involve training the managers on having meaningful conversations with the employees, while incorporating it. It should be left to the individual to measure this perspective, including the scoring mechanism and weightage in the overall scorecard along with this manager. A healthier discussion will also help in forming a strong bond between a manager and the employee. We have been separating the two lives - work life and personal life since long, but with technology and social media, the boundaries have already diluted. The time is ripe to have meaningful conversations and build purposeful relations within the organisation through the quality of life perspective. It is a long-term investment for any organisation, and get ingrained into the organisational culture slowly and steadily. But today’s investment will certainly lead the way forward to create a future ready workplace. Millennials will relate more to such meaningful organisations.

 

Companies with effective performance management systems have significantly improved their financial performance and productivity (Hewitt Associates, 1994). It is primarily because these metrics were tracked very closely by the Performance Management System. Adding this fifth perspective and tracking it closely will certainly lead to improved quality of life and  a better society. Long term organisational success cannot be defined by unidimensional metrics of business performance or income. Responsible organisations will have to weave in quality of life of its people as the core metrics to define success. Bringing this balance to a balanced scorecard will help organisations to ensure sustainable success, and also serve to create a healthier and happier society. While addressing students at Georgia Tech, Warren Buffet stated that one’s success in life is measured by how many people that one wants them to love, actually love them. While it can be debated whether an organisation can interfere with an employee's life outside its boundaries, the key is in effective implementation. Let us balance the scorecard and build balanced happier organisations.

 

References

 

Bernthal, P., Sumlin, R., Davis, P., & Rogers, R. (1997). Performance Management Practices Survey Report. Development Dimensions International.

Hewitt Associates. (1994). The Impact of Performance Management on Organizational Success. Hewitt Associates LLC.

Rusu R. (2016). The influence of Quality of Work life on Work Performance.

Kanthisree G. (2013). Work Life Balance of Employees.

Manoj K. Chaudhary is Head HR-Public Markets, Edelweiss Financial Services. He comes with a cross-domain experience in HR and has worked in the Oberoi Group and on various HR projects with SAP Labs, Johnson & Johnson, Lakme Lever, Ahuja Construction and Dhanlaxmi Bank. Manoj is a Masters in Human Resource Management and Labour Relations Programme at Tata Institute of Social Sciences.

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