Verizon Communication, Inc.

:
Implementing a Human Resources Balanced Scorecard

Group 2 Badey Gilang, Indra, Ivan Subianto, M.Danil Daud, Ratno Paskalis, Tania N.R.

Background
Telecommunication Act of 1996: Aimed to get telephone, cable and internet companies to compete each others 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

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 260.000 employee

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

HR Issue at GTE
HR Activities: around Hiring and Training HR Dept. considered simply cost There wasnt 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 ?

Balance Scorecard
A conceptual framework for assessing an organizations 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

Operational Perspective

Financial Perspective

GTEs HR Strategic Framework

Strategic Perspective Operational Perspective Financial Perspective Customer Perspective

Strategic Framework:

Five Strategic thrust

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

GTEs 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

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.

Other Linkage (Organizational effectiveness)

Improvement in Company Market Share

Improvement Employee Engagement Index (EEI)

Improvement in Internal quality

Improvement in Customer Services Indices (CSI)

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)

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 -

Link to Compensation
The result of balance scorecard affected the compensation for employee; higher score, higher benefits Scorecard growth accountability, especially HR Dept.

Thank you