Utilizing the Balanced Scorecard as a Training Management Tool
Using a balanced scorecard as a training management tool helps business organizations have an accurate assessment of their training programs. This approach ensures a well-rounded assessment of training investments.
Training is generally defined as the process of acquiring new skills, knowledge, and competencies through instruction of vocational and practical skills, as well as theoretical concepts. A common worldwide trend is geared towards the continuance of training throughout an employee’s working life. Some organizations label this as professional development. Training is very important not only for the purpose of retaining employees but also for attracting high-quality job applicants. Training development is now universally accepted as one of the primary drivers of employment.
While training could be very beneficial for employees, business organizations should also ensure that training benefits could be translated to higher return on investment (ROI). The many training programs companies implement are no good if these do not bring satisfactory results in the end. More and more firms are now recognizing the importance of assessing training efficiency and determining how training impacts the entire organization. Companies have found different ways to undertake this endeavor. Basically, success factors or key performance indicators are identified by HR managers and other company stakeholders. These metrics are then used to provide quick assessment of how an organization is doing in terms of training and corporate objectives. Among the many training assessment methods, the Balanced Scorecard approach is one of the more widely used. Developed by management experts, Robert Kaplan and David Norton, this strategic approach allows business organizations to integrate their vision and objectives into operational plans and strategies.
As a performance management system, the Balanced Scorecard approach works from different perspectives namely; financial perspective, customer perspective, business process perspective, and learning and growth perspective. The financial perspective includes assessment of all relevant financial data. This perspective is included in this approach, as both Kaplan and Norton acknowledge the need for companies to associate training success with financial success. Customer perspective, on the other hand, is rooted on the new management philosophy on the importance of customer satisfaction and customer focus. Poor performance in terms of customer perspective could be an indicator of a performance decline in the future. The Business Process perspective, meanwhile, takes a look at how internal business processes work. The metrics under this perspective help managers determine how the company is performing. At the same time, this indicates whether or not products and services that are provided to end-users conform to set quality standards. Finally, the learning and growth perspective focuses on employee training and improvement of corporate cultural values to facilitate success of future organizational endeavors. The categorization of performance measures in four different perspectives is designed to make gathering and selection of metrics more convenient for managers.
Balanced scorecard as a training management tool is very effective as it gives HR and training managers a more accurate and well-rounded picture of how training programs can potentially affect the success of an organization, not just on one, but on four different perspectives. Because of its effectiveness as a management tool, the Balanced Scorecard is now implemented in various government agencies, corporate units including non-profit organizations and learning institutions, and military units.
