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1 Verizon Communication, Inc.: Implementing a Human Resources Balanced Scorecard Group 2 Badey Gilang, Indra, Ivan Subianto, M.Danil Daud, Ratno Paskalis, Tania N.R.
2 Background Telecommunication Act of 1996: Aimed to get telephone, cable and internet companies to compete each other s market Companies were pursuing both horizontal and vertical integration; In order to achieve greater economies of scale Offer customer one stop shopping for variety of telecommunication services
3 Verizon Baby Bells company Bell Atlantic Largest independent phone company in US GTE Verizon Nymex One of major telecommunication company Largest local phone company in US Largest wireless phone company Annual revenue:$60 billion employee
4 Major Problem in Telecommunications companies in US Customer Turnover 23% of long distance telephone customers 35% of wireless phone customer Employee turnover Average 20-30% a year Quality of services decline Employee giving inaccurate information Slow to complete service order Insensitive to different ethnic group Smaller telecom companies offer superior customer services as a competitive advantage
5 HR Issue at GTE HR Activities: around Hiring and Training HR Dept. considered simply cost There wasn t any real system in place for performance measurement Company Investing about $75 Million a year to train employee: Higher productivity? Quicker cycle times? Greater Sales Growth?
6 Balance Scorecard A conceptual framework for assessing an organization s performance not only in terms of financial measures but also in terms of non financial measures Financial Measures: Lagging Indicator Non Financial Measures : Leading Indicators Measure driver of the company future success/failure (quality of product, motivation and skill of employee, efficiency of internal processes, customer satisfaction) Customer Perspective Strategic Perspective HR Balance Scorecard Financial Perspective Operational Perspective
7 GTE s HR Strategic Framework Strategic Framework: Five Strategic thrust Strategic Perspective Operational Perspective Financial Perspective Customer Perspective Measures Question Issue Assessment Benchmark Trend line or projection of internal data Indexing Establishing a target for each measure Weighting the measures Linked Data; to drill down the root causes Other Computer Files; online tutorial Communicating Communicate result of the balance scorecard Current performance vs. target Review Process Quarterly review of measurements
8 GTE s Five Strategic thrusts Customer services and support Leadership Organizational Integration Talent GTE Strategy HR Capability to profitably offer a complete bundle of high-growth telecommunication services in a rapidly changing environment
9 Financial Payoff Scorecard would ultimately provide a fairly close link to company profitability Reducing the Separation rate; by reducing the churn/ turnover by 1% the company would save about $ 23.6 M Reducing the absence Rate; by reducing absence rate 1%, the company would save about $200 M The General trade off issue; Balancing the expenses of certain HR initiatives with the related benefit.
10 Other Linkage (Organizational effectiveness) Improvement Employee Engagement Index (EEI) Improvement in Internal quality Improvement in Customer Services Indices (CSI) Improvement in Company Market Share Employee engagement & commitment Driving operational excellence respond effectively & sincerely during critical event Seek pattern of behavior that lead to in ingenuity (aids in coping difficult situation)
11 Drivers of Engagement * Employee perceptions of job importance * Employee clarity of job expectations * Career advancement/improvement opportunities * Regular feedback and dialogue with superiors * Quality of working relationships with peers, superiors, and subordinates - * Perceptions of the ethos and values of the organization - * Effective Internal Employee Communications - * Reward to engage -
12 Link to Compensation The result of balance scorecard affected the compensation for employee; higher score, higher benefits Scorecard growth accountability, especially HR Dept.
13 Thank you
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