Analysis of how Futura Industries implemented a balanced scorecard and its apparent effects
At Futura Industries, the president, Susan D Johnson built the success of the enterprise on the learning and growth dimension of the balance scorecard. A balance scorecard has four dimensions and they include: internal operations, financial, customer service, and growth and learning dimension. According to the case study, the main reason why the company decided to implement the growth and learning dimension over the other three dimensions in a balance scorecard is because the success of the other three dimensions depends on the success of growth and learning. This was evident in the company since for the period between 1996 and 1999, the company decided to focus on growth, innovation, and learning which resulted to a 50 percent increase in revenue and effective internal operation. The company did not have to add any personnel or employee within this period. This was achieved by having employees who are trusted, respected, and challenged to make the company grow.
Analysis
The company decided to use the balance scorecard because it realized that it will help fulfill its overall mission by connecting its strategic plan to tactics and measures. Futura Industries mainly focuses on its employees as the growth strategy. In the balance scorecard, the company seeks to increase and grow by training, developing capacity, and retaining its employees. Devotion to customers; recruiting and retaining the best employees are the two weapons which the company uses to implement the growth and learning dimension of the balance scorecard. This growth and learning dimension enables the company to attract highly skilled and talented human resource within the local market, in addition to retaining the employees.
Employee turnover and is therefore the specific measure that the company uses to evaluate its learning and growth. According to the case study, the aluminum extrusion and finishing industry experiences high employee turnover rates. Some of the companies get over 50 percent employee turnover. However, Futura Industries was able to decrease its employee turnover by 33 percent to stand at 10.7 percent in 1998.
The measurements that the company used to evaluate the growth and learning dimension are based on work-life initiatives which aim at creating corporate culture that focuses on employee performance and commitment. Some of these measurements include: surveys, birthday reviews, leadership survey, certification and training matrix, annual performance and personal development review. Surveys are important in order for the company to focus on hiring and retaining its employees. The company directly approaches its employees to be able to know how best they can improve their welfare. The company comes up with benefits which it believes are important to employees’ welfare and through regular surveys, the employees have to provide response on the most important and essential benefits which the company should focus on. For instance, some of the important benefits are medical, scholarships, sports team membership, paid offs for volunteer activities, and flexible time option.
Conclusion
These measures capture the full dimension of the growth, innovation and learning strategy. The growth and learning metric is basically an employee metric which seeks to evaluate the retention, productivity, and satisfaction of employees. In addition, the employee metric is not just statistical or behavioral in nature but also developmental. This implies that it focuses on employees’ growth and development in a certain mentality over a period of their stay in the company. The certification and training matrix ensures that the employees develop and grow as they work for the company. Their maturity is constantly monitored and most of the employees make the expected improvement. The training matrix is linked to the performance appraisal, cultural maturity, and compensation process.
The leadership survey is in fact very essential for the company’s overall performance as it focuses on establishing the kind of leaders and managers the employees would want to have. This survey seeks to improve the effectiveness of the managers and leaders; and aligning their management practices to the overall organizational strategy.
The approach by Futura Industries to focus on its employees makes perfect sense for good business. This approach is projected to create improvements of the company’s performance without any major problems because the implementation process was done well.
The company was able to link the learning and growth dimension of the balance scorecard to the other dimension which includes finance, internal operations, and customer service. From the implementation process, the company stands a better chance to note some of the blind spots associated with the learning and growth metric. In effect, this enables the company to make adjustments and improvements where appropriate. Focusing on employees is crucial for a company. Employee’s satisfaction is not only essential for the internal performance but also helps to cut down cost of operation. The company therefore will be in a position to conduct cost effective practices. Through reducing cost, high profit margins and increased revenues are realized; therefore the approach will see the company achieve its goals and objectives.
Works Cited
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