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2007/08/10

Total Performance Scorecard

Linking: Total Performance Scorecard: Redefining Management to Achieve Performance with Integrity  (中譯本: 總體績效計分卡)
Author: Hubert K. Rampersad
Hardcover: 352 pages
Publisher: Butterworth-Heinemann (May 2003)
ISBN-10: 0750677147
Book Review:

Total performance scorecard is defined as the systematic process of continuous, gradual, and routine improvement, development and learning, focused on a sustainable increase of personal and organizational performances:

TPS = PROCESS OF CONTINUOUS [< IMPROVEMENT > + < DEVELOPMENT > + < LEARNING >]

This management concept encompasses the personal and organizational mission, vision, key roles, core values, critical success factors, objectives, performance measures, targets and improvement actions, as well as the resulting process of continuous improvement, development and learning. It consists of the following five elements.

1. The personal balanced scorecard (PBSC) entails the total idea of personal mission, vision, key roles, critical success factors, objectives, performance measures, targets, and improvement actions. The PBSC regards the continuous improvement of your personal skills and behavior, focusing on your personal well-being and success. Self-management stands central here and focuses on the managers as well as employees within the entire organization. A new plan-do-act-challenge cycle (PDAC-learning) is used for personal improvement.

2. The organizational balanced scorecard (OBSC) encompasses the total organizational mission, vision, core values, critical success factors, objectives, performance measures, targets and improvement actions. The OBSC regards the continuous improvement and controllability of business processes focusing on achieving competitive advantages for the company. This corporate BSC is communicated and translated into all business unit BSCs, team BSCs and the performance plans of individual employees.

3. Total quality management encompasses a disciplined way of life within the entire organization whereby continuous improvement of oneself, one's job and organization stand central. Defining problems, determining root causes, taking actions, checking the effectiveness of these actions and reviewing business processes are done here in a routine, systematic and consistent way. The emphasis is on the mobilization of the entire organization in order to continuously satisfy the needs of the customer. It is a philosophy as well as a set of guidelines forming the basis for a continuously improving organization using the effective Deming cycle (plan, do, check and act) as its starting point (Deming, 1985). This learning cycle (PDCA-learning) is used for process improvement.

4. Competence management encompasses the process of the continuous development of human potential within the organization. The goal of competence management is continuously delivering top performances with a motivated and developed community. It focuses on the maximum development of employees and make optimal use of their potential in order to achieve the goals of the organization. Competence management involves the development of job-related competences; a collection of information, capabilities, experience, skills, attitudes, standards, values, views, and principles (knowledge) that is focused on the expert fulfilment of your job. The development cycle is central here, which consists of the following phases: result planning, coaching, appraisal, and job-oriented competence development.

5. Kolb's learning cycle. This process of instinctive learning (learning by experience) is seen in all four management concepts mentioned. Together with the process of conscious learning (learning by education) they result in individual and collective behavioral changes. These two learning forms as well as individual learning, PDCA-learning and collective learning are important themes in the TPS-concept. These are used to create conditions for effective organizational change. Kolb's learning cycle contains the following four phases: gaining hands-on experience, observing this experience, drawing conclusions from this experience, and testing these ideas in experiments, which again will result in new behavior and experiences.

There are overlaps between the personal balanced scorecard, organizational balanced scorecard, total quality management, and competence management. The black area in the center of this figure illustrates the similarities between the aforementioned management concepts. Improvement, development, and learning form part of this common area.

Seen from a strategic point of view, the total performance scorecard is thus continuously on its way to be the routine improvement of the entire organization, as well as the development of human potential and individual and collective learning, using the PBSC and the OBSC as a starting point. The PBSC focuses on your personal life, well-being and behavior, while the accent of the OBSC falls on achieving competitive advantages for the organization.

To be able to put the strategic vision into action, it will be necessary to link the corporate (OBSC) to the scorecard of the business units and teams, as well as to the individual performance plans of the employees. Each process participant formulates his or her own personal balanced scorecard, which is then situated on a higher abstraction level than the related individual performance plan. With this approach, a bridge is drawn between the successive organizational levels; the message from top management is consistently articulated to the lower levels and visa versa.

By linking the objectives as such, the local efforts are aligned to the overall organizational strategy. The formulating process is identical for the first three organizational sections mentioned. The formulated organizational mission in the OBSC and the perspectives apply to all organizational levels. The organizational vision and linked critical success factors, objectives, targets, and improvement actions are adjusted and fine-tuned to the related business units and teams. Here the OBSC is used as a frame of reference. Each lower level member should also reflect upon the alignment between the own personal ambition and the organizational, business and team ambition.

The TPS cycle has been developed in order to guide you in the successful implementation of the TPS concept. This cyclic model consists of the following five phases:

1. Formulating: formulating the personal and organizational balanced scorecard.

2. Communicating and linking: have all stakeholders share in the new business strategy by effectively communicating the formulated OBSC to them, as well as translating this corporate scorecard to all BSCs of the underlying business units and finally linking the team BSC to the individual performance plan of the employees.

3. Improving: continuous improvement of yourself, your work and your organization. This concerns the implementation of individual and organizational improvement actions focused on the personal success and the competitive advantage for the organization respectively. When implementing the improvement process, the following four phases are identified:

* Process selection and definition: this is selecting and defining a critical process related to the improvement actions eligible for continuous improvement.

* Process evaluation and standardization: this entails the description, evaluation, and standardization of the selected process.

* Process improvement, this is the continuous improvement of the evaluated processes according to the PDCA cycle.

* Personal improvement, this is the continuous individual improvement according to the Plan-Do-Act-Challenge cycle (PDAC-learning).

4. Developing: this entails continuous development of the job-related competences of individual employees based on the development cycle. Here the emphasis lies on the job related development and growth of individual employees, through the absorption of knowledge as well as the optimal use of their abilities. Through this they can fulfill their jobs more effectively. The development cycle is continuously followed through and consists of the following phases: result planning (drafting the competence profile and making related appointments regarding the results to be obtained), coaching (helping to gain the agreed upon results and giving feedback), appraisal (judging the functioning, checking if and how all the appointments are met and the results are obtained, giving 360°-feedback, and reviewing the results), and job related competence development (competence development of the employee through, courses, on-the-job training, personal guidance, coaching, etc.).

5. Learning. This entails the communication of the results from the improvement and development efforts and the functioning of the BSCs towards the employees and others, the collection of feedback information thereof, the review of the BSCs, their actualization based on the changing conditions, documentation of the lessons learned and identification of improvement opportunities and follow-up activities. Here, evaluation deals with checking which things went well and which wrong during the previous phases. It also concerns the testing of the realized level of the formulated objectives. Depending on possible differences, the implementation and/or the formulation of the BSCs can be adjusted. Thus, reviewing deals with learning from gained experiences, based on the Kolb's learning cycle.

After completing the last step in the TPS cycle, it will again be followed through in order to continuously align the BSCs to the surroundings. Through the thereby created learning effect, your organization will get to know itself and its surroundings better and will thus improve. This will continuously improve your organization's learning ability. Naturally, the same also applies to you. For example, by reviewing your PBSC quarterly with a trusted representative and by learning from previously obtained experiences, you'll learn to get to know yourself and your surroundings better and through this you will improve. Strategy formation, improvement, development of human potential and learning are thus a perpetual process. Continuously going through the TPS cycle will result in the continuous improvement of business results through the years.

This book introduces a holistic, integrated concept of organizational improvement and change management; combining the balanced scorecard model with the learning organization theory.


~Cited from Hubert K Rampersad. Measuring Business Excellence. Bradford: 2005. Vol. 9, Iss. 3; p. 21-35.



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