Verizon implemented a Human Resources Balanced Scorecard to address high employee and customer turnover. The Balanced Scorecard measures performance across financial, customer, operations, and strategic perspectives. It includes leading and lagging indicators linked to company strategy. Measures are weighted and targets are set to calculate summary quantitative results. The Balanced Scorecard was communicated throughout the company and linked data allowed drilling down into performance drivers. Linking non-financial measures to financial outcomes showed improved engagement, service, and financial benefits from reducing separation and absence rates. Compensation was also linked to balanced scorecard results.

1. By :
Yunus Arie Wiratama
Rieke Fitri Yuniar
Joseph Enrico
Pramadona
Rachmi Rida Utami
Verizon Communications, Inc:
Implementing a Human
Resources Balanced Scorecard

2. Customer and Employee Turnover
 Increase of Employee turnover (20% – 25% a year)
 Customer Turnover :
 23% of long-distance telephone
 35% of wireless phone
 The complaints were
 Employees giving out inacurate information
 Being slow to complete service orders
 Being insensitive to different ethnic group
The Value of Employees
Because it is not to contribute to the company whereas
the budget for HR department is high, the Balanced
Scorecard was established.

3. Balanced Scorecard
 Tool for assessing an
organization’s
performance.
 Measures financial and
non-financial.
 prompted by a changing
business environment.

4. GTE’s Strategic Framework

5. Measures
A group was then formed within the HR
department to translate these strategic
thrusts info a meaningful measurement
model.
 The group was supported by an “HR
measurement core team,” which consisted
of a number of functional experts from the
department.
 Initially the business presidents thought
that the Balanced Scorecard was a good
idea but they weren’t confident that HR
could come up with a model that work

6.  The measures were organized into four
“perspectives”:
A strategic perspective
 A customer perspective
 An operations perspective
 A financial perspective
 In addition to the inclusion of the non financial
measures, the balanced scorecard is also
useful because it is simple (one page),
including both leading and lagging indicators,
focuses on the drivers of success, and is
linked to strategy.

7. Indexing
The Scorecard was designed to enable HR
department to combine the performance
measures into summary, quantitative results
by:
-Establishing a “target” for each measure.
-“Weighting” the measures.

8. Communication

9.  Linked data
 Allowed people to look at data from the top down or from the
bottom up
 HR manager can know about was contributing to performance
results on a certain summary measure, could access the report
online and “drill down” to find the root causes within specific
business activities or geographic areas
 Other computer files
Hr departements worked with the Information Technology depart to
develop a few computer file, combining video and audio materials,
make the essential purposes and workings of the Balanced
Scorecard easy to grasp.

10. Review Process
Financial Payoffs
There was a direct relationship between performance of
non-financial measures and financial outcomes. This
relationship was consist of:
-Reducing the separation rate.
-Reducing the absence rate.

11. - Other linkages in “people issues” in “Organizational
Effectiveness”.
The study show about improvement in:
-Employee Engagement Index
-Customer Service Indices

12. Link to Compensation
Incentive compensation related to financial and
non-financial performance.
HR have the accountability of the actual
business’ performance.

13. Suggestion