Balanced Scorecard of Halifax, Inc - Essay Example

Question The expectation of Halifax, Inc. in Balanced Scorecards were to supply efficient and evaluative operational performance, focus on the achievement of core missions, comprehension of the internal and financial performance through analysis of the views and opinions of staff, clarity and definition of customer relations and outlook of managers on improvement and critical performance (Kaplan & Norton 1998). The team assured that every material needed by the scorecard existed. Moreover, they wanted the appropriate modifications on cultural change possible. This held the Customer Focus programme, where the perspective starts at performance management and personal development. Halifax Balanced Scorecard began evaluating the necessary factors in October/November of 1995. Operations of managers consisted of explaining the principles and appearance of the scorecard. The managers secured self-learning manuals and training disks for all the participants. Time completion for the activity was only two months and the actual launch comes in January 1, 1996. The main principles of Halifax Balanced Scorecard are financial and business perspective, customer perspective, interview process perspective and staff development and improvement perspective. Concerning the timetable given to change details on each perspective, the updates on financial, business and internal perspective happen each month, while the customer perspective arrives at quarterly and six months duration. The last perspective changes every six months. Tracking each update is essential because accuracy is one main factor of the Balanced Scorecard (Mee & O’Creevy, 2007, p. 60). The usefulness of the tool on the operational strategic processes never protruded in managing the whole system of approach. On the stance of operational balance scorecard, the focus on four steps in performance management and personal development made good turns in the investment of the company. Moreover, concentrating the stages to start and develop rapport between the management and staff gave a better view of the management. However, detracting the scorecard from the strategic objectives was on the overturn of cultural change than on business and financial perspective. The company believes that there is a relation between business and customer focus program. In summary, what the company did was to emphasize more on the “people and staff” rather than the core mission, which is the financial and business perspective. Plans for Halifax balanced scorecard was to divert focus on one quadrant. Significantly, along the way of process there is the question of balance for the reason that an overlooked preliminary objective resulted (Mee & O’ Creevy, p. 68). Financial and Business Perspective Size of Market Share mortgages Growth in Business volume and market share of other core products Profile of new business regarding equality and profitability. Control and management of arrears Customer Perspective Levels of Customer Satisfaction Relationships with customers Customer perceptions of service quality, efficiency and responsiveness. Internal Process Perspective Efficiency and productivity Performance against Halifax standards Levels of system availability Provision of a seamless perspective Staff development and improvement perspective Planning performance (appraisal and review process) Managing performance Training and development Communication Figure 1. Principles of Halifax Balanced Scorecard Question # 2. Memorandum From: John West, District Manager To: Alex Clarke, Customer Marketing Area Manager RE: Branch 5446, analysis of the issues facing Frank Innes, Branch Manager There are reports of Frank Innes, Branch Manager of 5446 performing under management regarding issues on the team and customer relations. There are also reports of the former manager overlooking the problems in Branch 5446. The Branch is certainly underperforming at present. In addition, the assistant branch manager also a full-time permanent worker got a recent heart attack and came back at work with no full integration of the system presently occurring. There are also some problems concerning the counter managers. Two managers share the role presented in the job but the earlier shift is underperforming. The counter staff receives none or little information because she tends to be “administration driven” and spends more time in the office. Hence, the second person in this role takes all the workload making customer relations worse. Frank, the Branch Manager, tends to blame all the failures to the branch, not even recognizing his own part within the matter (Mee & O’ Creevy, p. 75). The following are results from the Balance Scorecard Sheet of Branch 5446: Mortgage Completions (Jan-Jun.) on average = 46% (the total mortgage target is 100%) Current Accounts (Jan-Jun.) on average = 85% year to date versus 41% of salary funded. Personal Loan Repayment Insurance (Jan.-Jun.) = 59.83% compared to target of 70% Mystery Shopper’s Report = the difference between the bench and branch performance is 0.25 compared to 0.5 average difference. In order to change the performance of Frank Innes, Branch Manager of 5446, he has to take courage of what his staff does and do not solely impart such responsibility to his employees. As the representing advocate of the company, I will help ensure the management control of Branch 5446 through close monitoring of staff work such as the counter managers, take close analysis of the balanced scorecard, refer it to Frank Innes and make management options available to all employees and not solely on Frank Innes. Thank You Question #3. Company History: Fifer’s Bakery has been in the business for 15 years in confectionery bakery. Its foundation came from Eddie Hind, who operates from the modern premises of Kempton Park. Its current location has a strategic close proximity to customers, suppliers of raw materials and packaging materials (www.fifersbakery.co.za). The average productions of products on a daily basis are ±200. At present, there are two factories of 1000 employees. The product range consists of the following: Cake products Muffins Morning Goods Artisan breads and rolls Specialty breads Rye Breads (largest rye bread producer in South Africa) Danish Pastry products (croissants, vienoisserie) Christmas baked products – cakes, mince pies, stollen, fruit puddings etc. Easter range – Hot Cross Buns NEW PERFORMANCE MANAGEMENT SYSTEM Keep existing customers and winning more. Improve management and performance through automation Engage more in employee development Decrease paperwork Promote positive views on company growth The performance management system of Fifers bakery concentrates on financial and business perspective, staff improvement, and customer relations. This is for the reason that the company is an innovation-based automation and employee production that will train more knowledge on conducting a technological approach to the system. On the stance of financial and business perspective, the goal of having more branches should result on a possible definition of construction regarding addition of employees. It is appropriate for a company of 15 years to expand more into branches so the financial perspectives will have a much higher level. DEVELOPMENT AND IMPLEMENTATION The process flow in Fifers Bakery mainly defines the whole progress in each core product. This will ensure the product’s economical standard, communication during the process and further inquiries for modification of each products and services. Noticing the flowchart, it expresses how the company manages a whole day production. Primarily, the raw ingredients are of easy access, which will manifest the whole process of production. Moreover, there are several benefits of the balanced scorecard, which will aid in managing the whole company (Mee & O’ Creevy, p. 58). These are: Supplication of a more straight and organized structure of system in operational performance. Concentrate on achieving the core mission of the company (financial and business perspective) and staff improvement via scorecard measurements of importance. Help in comprehensive analysis of the internal management staff and customers on business pressures. Supply clarity concerning the processes on the overall procedure of achieving a product. Give managers an equivalent view of the critical drivers on performance and approval of staff evaluation. FIFER’S BAKERY BALANCED SCORECARD Financial and Business Perspective Size of production and market share Growth in business volume and market share of confectionery products Background perspective for new branches Aids in control of management arrears such as risk management and cost-benefit Customer Perspective Levels of Customer Satisfaction Customer focus Customer Relations Customer perceptions on service, efficiency and responsiveness Internal Process Perspective Efficiency and productivity Performance against Fifers’ customs Levels of raw ingredients availability Guidance in overall service Automation of existing services Construction of new services Staff Development and improvement perspective Strategic Performance Organizing Performance Training and Improvement Communication Organization of available levels of workforce Designation of proper employees on special fields (raw ingredients and dispatch) The scorecard shows which measurements are for the company’s components. The main difference of the present scorecard to the Halifax is the goal that mainly aims on the manifestation of financial and business perspectives above the staff development and improvement. The core and values of customer relation is second to the main goal perspective that will define greatly what the difference is between the success of expansion and staff evaluation. Though the company’s automation is not yet ready, it has great capacity for expansion defining supply and adequate funding for the computer relaying of available information. Supporting Information for Scorecard Measures Product Range: Cake products Muffins Morning Goods Artisan breads and rolls Specialty breads Rye Breads (largest rye bread producer in South Africa) Danish Pastry products (croissants, vienoisserie) Christmas baked products – cakes, mince pies, stollen, fruit puddings etc. Easter range – Hot Cross Buns Prevalent Production Facility Extensive production facilities of 6000 m2 Has Ample Capacity of 240 employees Mystery Shopper Performance by scenario, month-to-month performance. Planning Performance Staff evaluation through action methods, performance feedback, formal review and creation of objectives. Staff training on automation and management of staff’s poor workforce through implementation of performance objectives. In order to make a balanced scorecard, it is essential to know each of the quadrant’s characteristics. The financial and business perspective takes care of the funding data, which is in accurate and timely manner. The managers hold this responsibility, as it is their choice to provide the necessary qualities like handling and processing data. A corporate database has a centralized and automated processing, which leaves the other perspectives behind. This is always the case when the “unbalanced” situation occurs. Hence, the inclusion of risk assessment and cost benefit will prevent such incident in this category (www.valuebasedmanagement.net). The next quadrant, customer perspective, has two leading indicators namely the customer satisfaction and the customer focus. When customers feel unsatisfied of the service, they will prefer other suppliers instead that will eventually cause decline in the future. Looking at the balanced scorecard, it is accurate that there is an inclusion of customers’ levels because it develops metrics for satisfaction. Moreover, the kinds of processes used to provide the product would be necessary information to satisfy customers (www.valuebasedmanagement.net). The internal perspective talks on the requirements or mission. The makers of the processes should handle such task, as it would direct the company of knowledge in business processes, products, and services. Furthermore, there are two different business processes characterized in the strategic management processes, which are the mission-oriented processes and support-oriented processes. For Fifers bakery, support-oriented processes would be appropriate, as it tackles repetitive nature and easier measurement and benchmark of generic metrics (www.valuebasedmanagement.net). Last is the staff development and improvement perspective. In this area, employee training and corporate cultural attitudes matter because of its correlation to individual and corporate self-improvement. For Fifers, the major difficulty is the shortage of employees in available branches. In this category, the organization is knowledge-based, because people are the main ingredient for business operations. Because technological change is inevitable, there is requirement for employees to have a continuous learning mode. Moreover, the authors of Balanced Scorecard says that the importance rely on how people learn more than they train. Some companies result to shortage of employees because of hiring new technical workers and at the same time reveals a decline on present employees. Hence, it is an advantage to have the mentors and tutors within the organization. In addition, having some of the colleagues as mentors and tutors will ease communication between them and when a problem arises, addressing it will be easy. Technological tools such as the Intranet are necessary (www.valuebasedmanagement.net). PERSPECTIVE OF BRANCH MANAGERS Since there are two available branches for Fifers Bakery, we will look closely on the ability and perspective of the branch managers. Compared to the district manager, the branch manager uses the financial and business perspective first for evaluation. For example, a branch manager’s interpretation is to go primarily on business and financial section and look below to know where the additional information for support are. Another is to look into the savings balances and personal loans of employees or the management, which will focus on staff evaluation. When the evaluation tends to show a below average result, branch managers should take the appropriate action to dig into the underperformance that requires attention. In addition, some branch managers look first in quadrants that have obvious complications like the internal perspective, where listings on common errors on facilities are or staff development box, where some references in connection to staff training will reside for further improvement or if any employee needs an advice from the branch manager. Other branch managers can have more alertness in one quadrant that may link to another perspective like the quadrant of internal perspective to have problems on staff development on displacement and raw materials. Furthermore, branch managers can make use of positive balanced scorecards for pursuing the right attitude on some employees like evidence to support new activities or evidence to support underlying progress of staff improvement (Mee & O’ Creevy, p. 66). COMPLEMENTARY PROCESSES Like Halifax, Fifers Bakery can also use the Customer Focus Program and Performance Management and Personal Development. The former focuses on cultural change that involves training and coaching. This will manifest some strategies on practical ways that create innovations on change and influence managers to do the same. The logical approach of the Customer Focus Program begins with less initiative training and develops a journey to the way people behave in business change; hence, cultural change establishment happens. The program has three parts namely, management practices, customer satisfaction survey (RRATE) and branch training. Branch managers secure instructional videos that will help give training for staff in areas like challenge, product inquiries, measurement, and sales management, customer relations and savings maintenance. On the other hand, the Performance Management and Personal Development will enable a partnership between the staff and the management, which will result in achieving the business goals (Mee & O’ Creevy, p. 70). SUMMARY The main principles of Halifax Balanced Scorecard are financial and business perspective, customer perspective, interview process perspective and staff development and improvement perspective. The last perspective changes every six months. The company believes that there is a relation between business and customer focus program. Plans for Halifax balanced scorecard was to divert focus on one quadrant. There are reports on Frank Innes, Branch Manager of 5446, on under management regarding issues on the team and customer relations. There are also reports of the former manager overlooking the problems in Branch 5446. The Branch is certainly underperforming at present. The performance management system of Fifers bakery concentrates on financial and business perspective, staff improvement, and customer relations. Concentrate on achieving the core mission of the company (financial and business perspective) and staff improvement via scorecard measurements of importance. The scorecard shows which measurements are for the company’s components. The next quadrant, customer perspective, has two leading indicators namely the customer satisfaction and the customer focus. Furthermore, there are two different business processes characterized in the strategic management processes, which are the mission-oriented processes and support-oriented processes. Last is the staff development and improvement perspective. There are two available branches for Fifers Bakery; we will look closely on the ability and perspective of the branch managers. Compared to the district manager, the branch manager uses the financial and business perspective first for evaluation. Other branch managers can have more alertness in one quadrant that may link to another perspective like the quadrant of internal perspective to have problems on staff development on displacement and raw materials. Furthermore, branch managers can make use of positive balanced scorecards for pursuing the right attitude on some employees like evidence to support new activities or evidence to support underlying progress of staff improvement. Like Halifax, Fifers Bakery can also use the Customer Focus Program and Performance Management and Personal Development. The program has three parts namely, management practices, customer satisfaction survey (RRATE) and branch training. Branch managers secure instructional videos that will help give training for staff in areas like challenge, product inquiries, measurement, and sales management, customer relations and savings maintenance CONCLUSION Mainly, the purpose of balanced scorecard is to change the performance level existing in a business company. This will include four management perspectives emphasizing mainly on the financial and business perspective. However, Halifax turned over that perspective and focused more on the staff development and improvement and customer relations. They believed that the essentiality of people involved should have concentration in order to achieve a financial triumph. This can apply to Fifers Bakery because staff management is the main problem of the business. However, the prevailing issues between the two companies do not match; hence, results devastating to Halifax may be beneficial to Fifers Bakery. REFERENCES Fifers Bakery. 25 November 2007 . Balanced Scorecard Method. 25 November 2007 Mee, J. & O’ Creevy, M. Managing Performance as Halifax PLC. 25 November 2007 Olve, N-G, Roy, J. and Wetter, M. Performance Drivers. London: Wiley and Sons, 1999. Pugh, P. The Strength to Change. London: Penguin, 1998. Kaplan, R.S. & Norton, D.P. "The Balanced Scorecard - measures that drive performance." Harvard Business Review on Measuring Corporate Performance. January-February, 1992. Read More