Using HR scorecard for development of the strategic potential of machine-building enterprises

Source: own development

HR activities in system of the organization

To use the HR Scorecard special attention should be given to planning, measurement and analysis job. Should be developed systematic approach to communication and management training in accordance with the new management tool. Emphasis on the scorecard should focus on cost characteristics of tools and resources that are provided in connection with the strategy of business optimization. It also served as a tool, which allows predicting and anticipating possible problems. Measuring effectiveness is an important component in the decision-making attachment to the results of the HR Scorecard.

Internal elements of the enterprise environment affect the formation of element areas that allow for better internal environment elements. The properties of the organization reflect the cyclical and helical development.

The elements of internal environment that characterize the capabilities and limitations of this company, in our view, should include:

— Raw materials (their quality, quantity, price, etc.);

— Technology (existing in the enterprise);

— The means of labor (fixed assets, their characteristics);

— Company personnel (structure, quantity, quality characteristics, etc.);

— Financial resources (equity and debt, generating funds, investment, etc.);

— Structure of the enterprise (the division of responsibilities and work, hierarchy, degree of freedom in decision making, etc.);

— Management system (principles and tools of management, planning, organization, control, motivation, coordination and forecasting);

— System information (database, characteristics, information security, etc.);

— The process of converting raw materials into a finished product (value chain, cost, etc.).

Development of the elements of the internal environment of the organization increases the possibilities and reduces limiting on the activity of the company, and thus contributes to the development of reasonable and timely strategic and operational decisions, which in turn creates and develops the scope of activity of the enterprise.

The scope of the enterprise, which characterizes the activities of the organization in its environment functioning includes, in our opinion, the following elements:

— Finished product (the quality, price, consumer value, etc.);

— The market and consumers (market share, new markets, old and new customers, etc.);

— Position within the industry (competitors, suppliers, distribution system and sales, etc.);

— Technology (technology applied, innovation, novelty, etc.).

Development of the elements of the business sector enables a company to more effectively set strategic and operational objectives, increase productivity and efficiency of activities of the organization, and provides opportunities for the development of its internal environment.

For their existing conception about the state of the implementation of selected goals for objective measurement of the results of implementation strategy, the management of many Ukrainian machinebuilding enterprises has used the traditional system of financial- accounting indicators. In our opinion, in today's conditions of development, which has replaced the earlier industrial competition, now it is the time of information competition, meaning that reconsideration is needed of approaches to the formation, control and efficient allocation of financial, industrial, intangible and labor assets of the company. Enterprises need an additional evaluation system, which is linked to accurate and reliable financial evaluation of such intangible assets as market promotion of new products and services, potential ability, experience, interest in employee flexibility, customer loyalty, innovation projects, investment in production and workers, and other assets. leading strategy operational financial

In order to satisfy the needs of Ukrainian enterprises, we are proposing to use the method of Balanced Scorecard (BSC) [5]. BSC complements the financial parameters system which reflect the results of grading the development prospects system of enterprises. Objectives and indicators of the system are formed depending on the ideology and strategy of each organization and consider its activities on four criteria: financial, customer relationship, internal business processes, as well as training and staff development [1].

shows the relationship and subordination between the components of BSC by shapig the strategy of development of a modern engineering enterprise.

This vision is based on the proposed dual structure of potential strategic development of industrial enterprises (including engineering), which combines the current state of the underlying potential and the ability of companies to develop, i.e. the effectiveness of innovative potential.

Thus, in our view, the modem industrial enterprise faces two major tasks: first, creation of a system of indicators, and second, its use as an integrated system of strategic control for their development.

One of the main methods of management for the development potential of industrial enterprises is to develop a system of evaluation and development of methods of assessment on development potential and its prediction to identify the priority capacity of a development enterprise environment.

Linkages between business processes and value chains to human resource actions and services were clearly defined as the HR Scorecard became a business tool understood and used across the HR organization. Not only are human capital initiatives needed to increase employee value delivered to the business, they are vulnerable to business process changes and the measures taken in isolation can be misleading.

EXTERNAL

Relationship between components of BSC in the formation of Strategic Perspective

Importance of HR Scorecard is to obtain information that is contained in the scorecard, and helps to take timely measures promoting business efficiency.

As an example, can be chosen as one of the most important areas of management, from the point of view, the cost of personnel for the company -- staff turnover, labor turnover is critical to productivity and cost control. High turnover results are reflected in the poor performance requires higher costs for training. Impact is in all directions and affects the profitability of the business. Using the HR Scorecard, HR professionals monitor and analyze statistical data on turnover, determine the causes of turnover, calculated negative financial consequences, make decisions, monitor the trend of improvement.

As a result, there is a need for quantitative and qualitative assessment of the current (base) potential and capacity for innovation development to guide the process of formation of competitive advantage and provide evaluation and formulation of strategic directions of engineering enterprises.

Conclusions

The HR Balanced Scorecard has made it possible for HR managers to understand how they align to business objectives. They are able to explain not only what they are tracking but also how they are performing on essential strategies for the business. Business environment and the objectives and strategies will continue to evolve, and HR managers will continue to be flexible and creative in supporting the changes. The value of the HR Scorecard as a tool is that it can get us to the new goals and measures and through the process ensure continued learning and change management. The analysis of the dynamics of integrated indicators characterizing the use of strategic capacity development for local engineering industry indicates the following:

— the existence of negative trends, which is evident in the decline of manufacturing engineering products that are competitive on the domestic and foreign markets;

— formation of negative trends associated with the influence of a rapidly changing external environment and the lack of a clear strategic program for long-term business development in machine-building enterprises and of strategic management of its potential;

— strategic development potential is the most important factor for the economic and strategic security of an engineering enterprise and defines the base for creating a long-term competitive advantage.

— the balanced scorecard approach can provide accurate and timely information about the current (base) potential and the potential for innovative development of engineering enterprises.

We believe that this information will allow for more efficient shaping of competitive advantages and improve strategic decision making at engineering companies. HR Scorecard will allow managers to actively engineering enterprises to improve productivity and achieve strategic goals. In HR Leaders now have a tool that supports the focus on tactical excellence, ensuring alignment with business strategy.

References

1. Ahn, H. (2001). Applying the Balanced Scorecard Concept: An Experience Report. Long Range Planning 34(4), 441-458.

2. Atkinson, A., and M. Epstein (2000). Measure for Measure. CMA Management 74 (September), 22-28.

3. Field, T. (2000). Full Measure. CIO 13(14), 140-145.

4. Gumbus, A., and S. Johnson (2003). The Balanced Scorecard at Futura Industries: Relentless Commitment to Employees Results in Company Success. Strategic Finance 85(1), 37-41.

5. Kaplan, R.S., & Norton, D.P. (1996). The Balanced Scorecard: Translating strategy into action. Boston: Harvard Business School Press.

6. Poberezhnyi, R. (2013) Forming the strategic potential for development of machine-building enterprises: the balanced scorecard in use. Club of Economics in Miskolc: Theory, Methodology, Practice, Volume 9, Pages 79-83

7. PR Newswire. (2003). Got Leverage? September-October Issue of Harvard's Balanced Scorecard Report Explores Strategic Lock-In, Strategic IT Agility and the Balanced Scorecard. PR Newswire, September 16, 1.

8. Simpson, S., and R. Cacioppe (2001). Unwritten Ground Rules: Transforming Organization Culture to Achieve Key Business Objectives and Outstanding Customer Service. Leadership & Organization Development Journal (July-August), 394-402.

9. Staff (2002). Balanced Scorecard Tool Drives Performance. Association Management 54(2), 26-27

Abstract

The methodological approaches using the balanced scorecard, the strategy development for the engineering enterprises are described in the article. Particular attention is paid to the system of indicators that use a wide range of «leading and lagging» indicators within the overall strategy, operations, customer perception, financials indicators to measure the effectiveness of HR initiatives. HR Balanced Scorecard allows you to monitor the performance of staff, analyzing his stats, diagnose problems, make decisions and monitor changes.

Keywords. Balanced Scorecard strategic management, enterprise development, measurement of achievements, training, human resources, leadership

В статье рассмотрены методологические подходы с использованием системы сбалансированных показателей, при разработке стратегии для машиностроительных предприятий. Особое внимание уделено системе показателей, которые используют широкий спектр «руководящих и отстающих» индикаторов в рамках общей стратегии, операционных процессов, восприятия клиентов, финансовых показателей для оценки эффективности HR инициатив. HR Balanced Scorecard позволяет контролировать показатели персонала, анализировать его статистику, диагностировать проблемы, принимать решения и отслеживать изменения.

Ключові слова. Збалансована система показників, стратегічне управління, розвиток підприємства, вимір досягнень, навчання, людські ресурси, лідерство

У статті розглянуто методологічні підходи з використанням системи збалансованих показників, при розробці стратегії для машинобудівних підприємств. Особливу увагу приділено системі показників, які використовують широкий спектр «ведучих і відстаючих» індикаторів в рамках загальної стратегії, операційних процесів, сприйняття клієнтів, фінансових показників для оцінки ефективності HR ініціатив. HR Balanced Scorecard дозволяє контролювати показники персоналу, аналізувати його статистику, діагностувати проблеми, приймати рішення і відстежувати зміни.

Ключевые слова. Сбалансированная система показателей, стратегическое управление, развитие предприятия, измерение достижений, обучение, человеческие ресурсы, лидерство

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