The Implementation of an Enterprise-Wide Balanced Scorecard - Literature review Example

Name Course Lecturer Introduction Balance scorecards in organizations are owned by executive management teams. However any implementation of a performance improvement strategy in an organization must consider people related factors that may affect the success of the strategy. This paper addresses the role coaching and mentoring plays in addressing the people related problems that may affect the implementation of an enterprise wide balance scorecard. In most cases any changes in an organization are likely to be met by passive and active resistance. Ultimately, the success of an enterprise wide balance scorecard is dependant on employee acceptance. Every employee input is important in bringing about positive results through the implementation of a balanced scorecard. According to Kaplan and Norton, a balanced scorecard is a means of evaluating organizational success (71). Kaplan and Norton developed the balanced scorecard as a method to make a link between strategy formulation and implementation clear. It also examines to which extent an organization is meeting its goals. A balance scorecard therefore affects the people element in the organization. People are required to do new things or raise their performance. Coaching and mentoring comes in to inform and build the capacity of individuals in implementing the balance scorecard According to Kaplan and Norton, the balance scorecard should be implemented in the following steps (73): The vision should be translated into operational goals. The visions should be communicated and linked to individual performance Business planning. Learning and providing feedback and aligning the strategy. According to its creators the balance scorecard has four perspectives: Financial: High-level financial measures are identified. These measures are developed in response to the question “How do we look to shareholders” (Kaplan and Norton, 76). Customers: These measures are concerned with customers perception of the organization and are in response to the question: “How do customers see us” Kaplan and (Norton, 77). Internal Business Processes: Encourages businesses to identify areas where they should excel to improve performance and answers the question: “ What must we excel at?” (Kaplan and Norton, 78). Learning and Growth: This perspective is concerned with long-term performance improvement. Coaching and mentoring are important element in this perspective of the balance scorecard. According to Wagner and Kaufmann, the process of implementing the balance scorecard can be incredibly daunting for management and employees alike (270). However with employee coaching and mentoring a successful implementation can be made. Coaching refers to informal communication between managers and employee with three distinct aims (Hackman and Wageman, 285). First, employee coaching aims to reward employee who meet or exceed performance expectations. Secondly, coaching is a correction tool for those who do not meet the performance expectation. Thirdly, coaching stresses on performance improvement even when it is satisfactory. According to Rodney and O’Neill, organizations should not limit performance management to annual review (193). In contrast, employee performance can be improved and sustained through day-to-day communication of feedback. Since the balance scorecard brings a lot of changes and challenges in an employee’s job, managers have an important role in coaching the employees through the process. According to Laske, to coach is to facilitate, mentor, teach, guide, exhort, enable, and nurture people to be self-aware, to self-belief and develop their skills (139). Mentoring refers to the process of offering advice to a protégé to foster their professional growth (Kutilek and Earnest, 4). A mentor in an organizational contexts is senior to the person he/she is mentoring. Through the mentorship, the employee is able advance their skills and career as required by the learning and development perspective. Mentoring can either be informal or formal (Kutilek and Earnest, 4). Formal mentorship is done by senior employees who are matched with juniors. Formal mentorships target organizational goals. The length and scope of the mentorship is determined by the organization. The organization also determines how frequently the mentor will meet the protégé. On the other hand, informal mentorship is focused on the protégé’s goals. The length of the relationship is not predetermined. Neither is the frequency of contact between the mentor and protégé structured. Coaching and mentoring interact with the balanced scorecard as they help to build a culture of teamwork at the highest level of management. Strong teamwork ethics has been noted as a critical factor for the success of the balance scorecard (Blackburn, Furst and Rosen, 101). Even though the process of creating the balanced score card cements executive teamwork, some leaders are not accustomed to working in teams (Wagner and Kaufmann, 270). Coaching and mentoring can catalyze teamwork among the top management teams. A balanced scorecard strategy is easier to implement if there is a culture of teamwork at the top most level of an organization. Most senior management teams do not pay much attention to the learning and growth perspective of the creation of balanced scorecard. Some think that the other three perspectives are more important. Through mentoring and coaching, managers are taught that the three perspectives are of equal standing. According to Hackman and Wageman, individual development coaching contributes to an increase in team compatibility as it raises the level of mental growth among members (139). According to Laske, the mental growth of an employee is a supreme asset through the learning and growth perspective of the balance scorecard (139). This mental growth determines how employee will behave and contribute to the improved performance of the organization. Laske identifies coaching as one of the meta-enablers that can enhance the mental growth of employees involved in strategy implementation (139). According to Laske, individual can transcend up to 15 levels of mental growth between the ages of 20 to 100 years. Coaching is one of the ways of ensuring a faster translation between the phases (139). While most managers take for granted the “people objectives and measures” set out in the learning and growth perspective (Kaplan and Norton, 76). The long-term success of the scorecard can only be guaranteed if learning and growth occurs successfully in the organization. Through mentoring and coaching, the learning and growth of employee is ensured. In the views of Kaplan and Norton, the learning and growth perspective is the supporting foundation of the other three perspectives (78). If the scorecard is successful in the learning and growth perspective a direct causal relationship is observed in the other three perspectives. According to Wagner and Kaufmann, most scorecard fail in the implementation phase after being successfully designed (273). Coaching and mentoring is important in building resilience among management teams as they lead a two year or three year effort to change an organizations culture. Trying to change an organizations culture is one of the hardest tasks that can be assigned an organization management team. Both the management team and employee should be mentored and coached to accept the changes to be effected. According to Hackman and Wageman, behavioural coaching is a key factor in facilitating culture change in an organization (286). Coaching and mentoring come in handy in handling the cultural challenges the implementation of the scorecard may come up against. For example resistance to performance measurement is expected in most organizations where the scorecard is to be implemented. Coaching and mentoring are important in informing employee why a culture change is necessary. Performance measures as discussed before are one of the most resented features of a scorecard. In most cases employee think that they are tool to punish employees rather than facilitate continuous improvement (Sharma, 10). It is important for managers to make lower-level employees understand the role of the scorecard. Most people hate being rated as poor in their performance and this may be a cause for resentment among employee as they feel victimized. It is especially important to mentor poor performing employees and reinforce the idea that they are not being punished. The organization should coach the employee that what is needed of them is behaviour change and continuous improvement (Marshall, 137). In so doing mentoring and coaching create a learning and performance focused culture. The balanced scorecard focuses on continuous improvement and therefore continuous feedback on performance. According to Stone, recognition and rewards through coaching are a great way of influencing employee behaviour (23). Kaplan and Norton advices organization to tie individual recognition and incentives to the organizational goals (74). Coaching can reward employees by coaching them for meeting or exceeding performance expectations (Gregory, Levy, and Jeffers, 42). In most cases changes to the incentive based compensation are made in support of the balanced scorecard (Kaplan and Norton, 89). These changes can affect staff morale and some individuals who are used to get incentives may miss out. Though a scorecard aligned incentive compensation is a powerful tool to change behaviour, it may bring down the morale of those who miss out. Coaching employees on how the new incentive compensation system works is important to the success of the scorecards implementation. The organization should try its best to show that the new compensation system is not meant to punish those who perform poorly but rather to encourage them to improve their performance. While a score card identifies training gaps within the organization, it is the responsibility of HR to fill this gaps. The scorecard thus points the way to HR to fill up the skill deficit identified by the scorecard (Gregory, Levy, and Jeffers, 42). HR thus is able to tailor coaching and mentorship to fill this skill deficit. Coaching and mentorship are also important tools in helping employees understand the company’s strategy (de Waal, 313). When employees are able to understand the company strategy they put their best effort in achieving it. Rogers implementation of the Compas Balanced Performance Scorecards is an example of successful implementation how a balance scorecard interacts with mentoring and coaching. According to Orbit Group, Rogers was able to use coaching to reinforce the contact centres basic performance principles. Furthermore, workers were coached about the “three rights” that enables them to be performing better (Orbit Group); Employees have a right to know what is expected of them. How their are performing against those expectations. What they need to do to satisfy those expectations. With implementation of the scorecard the Rogers care recorded improved efficiency and effectiveness in its service delivery. Conclusion The balanced scorecard is a method of linking implementation with formulated strategy. However, implementing the process can be daunting to managers and stressing on employees who are required to improve their performance and are subjected to changes in their working life. Coaching and mentoring can ease the implementation of the scorecard by constantly informing employee of changes and what is needed for them to successfully implement the scorecard. First, through mentorship and coaching, high level executives are reminded of the importance of the learning and growth perspective as the foundation of the other perspectives. Success in the learning and growth perspective greatly affects success in the other perspectives. Indeed, financial, customers, and internal processes will see significant improvement if employees are better mentally developed and focused on the organization’s goals. Moreover, the mental growth of employees goes a level up thus influencing their behavior. Secondly, through mentorship, senior executives are coached into becoming better team players thus enhancing the decision making process at the top. Thirdly, mentoring and coaching prepare managers mentally for the long drawn task of implementing a balance scorecard. Mentoring and coaching are also significant in encouraging employee whose performance may be rated as poor. Mentors and coaches are able to stress that performance measures are not there for punishing employee. If employee feel a performance evaluation and reward system is unjust to them they tend to resent it; through coaching managers can help them understand how the incentive-compensation system works. Through mentoring and coaching, an organization can identify skills gap at the individual level and focus HR effort at plugging the apparent gap. Furthermore, mentoring and coaching helps employees better understand the organization’s strategy and vision which is identified as the balance scorecards main goal. Works Cited Gregory, Jane Brodie, Paul E. Levy, and Micah Jeffers. "Development of a model of the feedback process within executive coaching." Consulting Psychology Journal: Practice and Research 60.1 (2008): 42. Hackman, J. Richard, and Ruth Wageman. "A theory of team coaching." Academy of Management Review 30.2 (2005): 269-287. Kaplan, Robert S., and David P. Norton. "VThe balanced scorecard: measures that drive performanceV." Harvard Business Review, JanuaryuFebruary, pp. 71&80 (1992). Laske, Otto E. "An integrated model of developmental coaching." Consulting Psychology Journal: Practice and Research 51.3 (1999): 139 Laske, Otto. "A learning-and-growth metric for strategy-focused organizations." (2001). McAdam, Rodney, and Edel O’Neill. "Taking a critical perspective to the European Business Excellence Model using a balanced scorecard approach: a case study in the service sector." Managing Service Quality 9.3 (1999): 191-197. Stone, Florence M. Coaching, counseling and mentoring: How to choose and use the right technique to boost employee performance. Amacom, 2007. Blackburn, Richard, Stacie Furst, and Benson Rosen. "Building a winning virtual team." Virtual teams that work: Creating conditions for virtual team effectiveness (2003): 95-120. de Waal, Andre A. "Stimulating performance-driven behaviour to obtain better results." International Journal of Productivity and Performance Management 53.4 (2004): 301-316. Sharma, Ashu. "Implementing balance scorecard for performance measurement." ICFAI Journal of Business Strategy 6.1 (2009): 7-16. Wagner, Stephan M., and Lutz Kaufmann. "Overcoming the main barriers in initiating and using purchasing-BSCs." Journal of Purchasing and Supply Management 10.6 (2004): 269-281. Orbit Group. How balanced scorecards drive contact centre results to the next level. (2013).web. http://orbitgroup.ca/rogers-how-balanced-scorecards-drive-contact-centre-results-to-the-next-level/ Marshall, Stephanie, ed. Strategic Leadership of Change in Higher Education: What's New?. Taylor & Francis, 2007 Kutilek, Linda M., and Garee W. Earnest. "Supporting professional growth through mentoring and coaching." Journal of Extension 39.4 (2001): 3-13 Read More