BalancedScorecardBackgroundOverview&ExamplesTheBSCconceptMeasurementMotivatesBehaviour“Whatyoumeasureiswhatyouget”“It’snotwhatyouexpect

…

it’swhatyouinspect”“Ifyoucanmeasureit,youcanmanageit”TheBalancedScorecard’s(BSC)fundamentalpremiseisthatmeasurementmotivatesbehaviourThescorecarddifferssubstantiallyfromtraditionalmeasurementapproachesTheBSC’sfocusisonfactorswhichcreatelong-termeconomicvalueinanorganisation,forexample:Customerfocus.Organisationallearning.Businessprocesses.Traditionalaccountingmeasuresarebydefinitionbackwardlooking:Financialmeasuresonlyreflecttheresultsofactionsalreadytaken.Donotprovideanindicationoffuturefinancialperformance.Donotindicatedesiredperformance.Donotprovideabasisforplanningandtargetsetting.CriteriaForAGoodBalancedScorecardAGoodBalancedScorecardwill“Tellthestory”ofyourstrategyCauseandEffectRelationships:Everymeasureshouldbepartofa“causeandeffect”chaintodetermineifthemeasurescorrectlyrepresentsanddrivesthestrategy.LinkedtoFinancials:EverymeasureselectedshouldultimatelyDrivePerformance.Focusonfactorsthatcreatelong-termvalue.Abalanceofleadandlagindicators: MeasuresthatCreateChange:Measuresmustcausetheorganisationtochangeitsbehaviourinsomeway.pany

StrategyAs-IsVisionClarifyingandTranslatingtheVisionandStrategyStrategicFeedbackandLearningPlanningandTargetSettingmunicationandLinkingFeedbacksystemusedtotestthehypothesesonwhichstrategyisbased.Strategydevelopmentisacontinuousprocess.Stretchtargetsareagreed.Investmentsaredeterminedbythestrategy.Annualbudgetsarelinkedtolong-rangeplans.Goalalignmentexistsfromtoptobottom.OpenmunicationofstrategyisbasisforemployeeempowermentBalanced

ScoreboardTheBalancedScoreboardcreatesastrategicframeworkforactionThestrategyisthereferencepointfortheentiremanagementprocess.Thesharedvisionisthefoundationforstrategiclearning.TheBalancedScorecardtranslatesvisionandstrategyintofourdimensionsofperformance“Whenweachieveourvision,howwillourorganisationlearnandgrow?”“Whenweachieveourvision,howwillwelooktoourbusinesspartners?”“Whenweachieveourvision,howwillourinternalbusinessprocessesoperate?”“Whenweachieveourvision,howwillwelooktoourshareholders?”VisionCustomersandPartnersFinancial/ShareholderInternalProcessesLearningandInnovationForeachofthefourdimensions,objectives,measuresandtargetsareexplicitlydefinedFinancial/ShareholderObjectivesMeasuresTargetsCustomersandPartnersObjectivesMeasuresTargetsInternalProcessesObjectivesMeasuresTargetsLearningandInnovationObjectivesMeasuresTargetsVisionThelinkagebetweenthefourdimensionsiscrucialinensuringlong-termsuccessFinancialClientsatisfaction,efficientandeffectivedeliveryofserviceswilldeliverfinancialresults.Excellentprocessesandpeoplewilldeliverclientsatisfaction.

Goodpeopleinefficientprocessessupporteffectiveness.

Youneedgoodpeople,peopleprocessesandstructuretoachievehighperformance.Shareholder

ValuePartners/CustomersInternalProcessesLearning&GrowthAlignmentthroughtheorganisationwillbeachievedbycascadingthescorecardHighLevelScorecardBusinessUnitorDepartmentalScorecardsIndividualScorecardsShareholder/Parent/RequirementsFinancialCustomers

&PartnersInternal

ProcessesVisionLearning

&InnovationFinancialCustomers

&PartnersInternal

ProcessesVisionLearning

&InnovationFinancialCustomers

&PartnersInternal

ProcessesVisionLearning

&InnovationFinancialCustomers

&PartnersInternal

ProcessesVisionLearning

&InnovationWhenimplementedwell,thebenefitsofBalancedScorecardcanbesignificantSeniorexecutivesarefocusedandalignedaroundasmallnumberofcriticalobjectivesandsuccessmeasures.Asimple,singlemanagementreportmakesprogresstowardsfinancial,customer,internalprocessesandlearningobjectivesclearlyvisible.ThePlan-Do-Reviewprincipleestablishesclearaccountabilityforachievingobjectives,forsuccessandfailureTheBSCimplementationestablishesastrategicfeedback/monitoringsystemthatdrivesactionstoexcelincriticalperformanceindicatorsFocusBalanced

PerformanceAccountabilityContinuous

ImprovementTheBSCProcessBalancedScorecarddesignisonlyaponentoftheoverallprocessScorecardDesignScorecardImplementation/Roll-outStrategicIntentDevelop

&finaliseObjectivesDevelop&finaliseMeasuresDeterminebaselines

andsettargetsIncorporatescorecardreviewaskeyiteminbusinessmanagementmeetingsManagebusinessaccordingtoscorecardReview/

refinescore-cardonaregularbasis

inconjunc-

tionwithstrategy

review

processAlign/planinitiativesaccordingtoscorecardDevelopandimplementBUandsectionscorecardsEnsurescorecardalignmentReview&refineon

anongoingbasisManageBU,sectionetc.according

to

scorecardformatFeedbacktohighlevelscorecardtoensurealignmentCorporate/ShareholderinputwhererelevantmunicateScorecardtoorganisationCascadescorecardtoindividuallevel.Toensureindividualfocusandalignment.BalancedScorecardBusinessManagement

ProcessTheBusinessManagementProcess(BMP)implementstheBalancedScorecardinaPlan-Do-ReviewCycleLinktoHigherLevelBSCFinancialLearning

and

InnovationInternal

ProcessesCustomers

and

Partners

MeasuresTargetsObjectivesLinktoLowerLevelBSCLinktoHigherLevelBMP/ReportLinktoLowerLevelBMP/ReportReview

BSCTakeAction:InitiativesPlansBudgetsMeasureActualsagainstTargetspileReportTargetPlan-Do-ReviewsessionDetermineRootCausesforVariancesDefineActionStepsPDRSessionWhatmakesagoodObjectiveorMeasureWeneedtohaveclearandmunicateddefinitionsoftheBSCponentsObjective:Statementthatdefineswhatwemustdotoachievethevision.Linkedtoourstrategy.Measure:Anumericindicatorthatwillindicatesuccessfulachievementoftheobjective.Leadindicator–Indicatesthelikelihoodofchange(forwardlooking).Lagindicator–Indicatethatchangehasoccurred(backwardlooking).Target:Valueofthemeasurethatwewouldliketoachieveinagiventimeframe.Mustbeachievable.PerspectiveA“Good”BalancedScorecardincludesobjectives,measurementsandtargetsthatpromotechangeExample:FinancialCustomerInternalLearningBusinessObjectives? Shareholdervalue? Profit? Newrevenue? DifferentiationStrategicalliances

Customerservice? Productivity

? Newproductdevelopment? Segmentation? Peoplepolicy? Alliancemanagement? CustomerfocusMeasurements? %dividendgrowth? OperatingMargin? Revenuefromnewservices? Targetmarket-shareProfitsfromalliances

Customersatisfaction? Revenue/workhour? Productdevelopment

cycletime? Numberofinitiativestargetedatprofitablesegments? Managementspanofcontrol? Numberof“l(fā)earning”partnerships”? %managementtimeinterfacingwith

customersTargets

? CPI+X%annually? Topquartile? 25%inthreeyears? Numberone? $Minfiveyears? Numberonecustomerrating? Best-in-classwithinfiveyears? Reducedby50%intwoyears? 60%withinoneyear? Tripleinthreeyears? 10infiveyears? 20%intwoyearsAccountabilities

FinanceDirectorCEOBusinessDevelopmentManagerMarketingDirectorBusinessDevelopmentManagerMarketingDirectorCOOResearchandDevelopmentManagerMarketingDirectorHumanResourcesDirectorBusinessDevelopmentManagerCEO...andclearaccountabilitiestoensureownership.TheobjectivesdefinewhattheorganisationmustdotoachievethevisionDescriptionofagoodobjective:Linkedto,anddescriptiveofaponentofthevision/strategy.Relevanttowhattheorganisationwantstoachieve.Actionorientated:Startstatementwithaverb.Measurable:theremustbeamannerinwhichwecandeterminesuccessinachievingtheobjective:Clearandconcise.Understandabletothewholeorganisation.Mustbeabletoassignoverallaccountabilitytoasingleperson.MeasuresmustbethekeyindicatorsthatregisterachievementoftheobjectiveTheSMARTcriteriadefinesagoodmeasure:Simple – relativelyeasytoaccess,collateandcalculate.Measurable – e.g:numberofhoursworked,linesinstalled,etc.Aactionable – abilitytotakeactiononvariancestoplan.Relevant – abilitytoinfluencethatwhichisbeingmeasured.Timeous – mustbedetermined/measuredasfrequentlyas

possible,orwhenrelevant. – thelongerthedelayinmeasuringthelessthechance toallowtimeous/appropriateaction.Targetsmustbesetforeachmeasure,anddefinegoalsfortheorganisationtoachieveCriteriaforagoodtarget:Mustbeachievable.Providesomestretchfortheorganisation.Setforagoodfixedtimeperiod.Determineintermediatevalues,toevaluateprogress.Alignedwithwhattheorganisationwantstoachieve.Supportedbyandhavebuy-inoftheexecutiveteam.Theobjectives,measures,targetsandaccountabilitiesneedtobedefinedatalllevelsoftheorganisation.Priority:EffectivelyManageValueAddingProcessesFormula:Weightedrankingoftotalunitcostofproduction+plantreliabilityindex+totalstaffingindex+puterisedinstrumentationindex+totalmaintenance+sustainingcapitalindex.Source:SiteLeadershipForeachobjectiveandmeasurewewilldevelopaprecisedefinition...Measure:Costexcellencerating

FormulaNotes:Aweightedindexthatgivesaquartileperformancecostexcellenceposition.Weightingstoreflecttheirimportancetoeachbusiness.Categoriesare1stto4thquartileRankings,asdefinedbyexternalconsultantsatleasteveryotheryear,butdoneyearlyAparativegroupisdefinedFormulatobedefinedbytypeofplantrelevanttotheirbusinessneedandvalueproposition.Weightingsmayshiftovertime.UpdateFrequency:AnnualActiontoImplement:Useblendofindustrystudies(e.g.,Solomon,Mastio,ChemSystems,Townsend),andanalysisofone-on-oneparisonsvs.leaders.Mayalsousesimplifiedbenchmarksandmodels,asappropriate.EffectivelyManageValueAddingProcesses:Bethelowcostproviderofproductsandservicesbyachievingpetitiveexcellenceinallourbusinessprocesses.EXAMPLEObjective:Perspective:

Internalprocesses

Measure:

Costexcellencerating|...andanapproachtosettingtargetsEffectivelyManageValueAddingProcesses:

Bethelowcostproviderofproductsandservicesbyachievingpetitiveexcellenceinallourbusinessprocesses.Objective:FrequencyofMeaningfulUpdate Monthly Annually QuarterlyMeasurementdefinition/formula(SeealsoMeasurementProfile):Weightedrankingoftotalunitcostofproduction+plantreliabilityindex+totalstaffingindex+puterisedinstrumentationindex+totalmaintenance+sustainingcapitalindex.Approachtosettingtargetsand/ordevelopingmeasure[Iftargetsexist,identifysource]:Targetistobetopquartile.Sites(typesofplants)willneedtoselectthekeyvariables,weightthem,andchooseasuitableexternalbenchmarkingmethodology.RmendationsneedtobeagreedbybusinessteamsandleadershipteamTargetsettingresponsibility:Manufacturingleadership/SBUAccountabilityforresults:ManufacturingleadershipTracking/reportingresponsibility:Siteleadershippletiondate:1995(somecouldbereadybyJanuary)LinkagetoBusinesses:Throughbusinessteams,alignedwithSBUstrategyLinkagetoBTStreams/Initiatives:ManufacturingCapitalinvestmentexcellenceSupplychainEXAMPLEExampleObjectivesandMeasuresGenerally,BSCobjectivesfocusaroundkeythemesineachofthefourareasFinancial/ShareholderThemesShareholdervalue.ROI.Profitability.Turnover/Revenue.Learning&InnovationThemesAttract,retainandmotivateemployees.ClarifyandmunicateRolesandResponsibility.Buildingskills.Manageresources(leadership).Knowledgemanagement.InternalProcessThemesLowcosts.Productionefficiency.Quality:ISOpliance.Safety.Productionvolume.Environment.Processeffectiveness.Customers&PartnersThemesRetention.Satisfaction.Value-addedtocustomers.VisionTheBalancedScorecardshouldcontainabalanceofleadandlagindicatorsF1 Meetshareholder

expectationsF2 ImproveoperatingperformanceF3 AchieveprofitablegrowthReturnonEquitybinedRatioBusinessMixC1 ImproveagencyperformanceC2 SatisfytargetpolicyholdersAcquisition/Retention

(vs.plan)Acquisition/Retention

(bysegment)AgencyPerformance

(vs.plan)

PolicyholderSatisfactionSurveyI1 Developtargetmarkets

I2 UnderwriteprofitablyI3 AlignClaimswithbusinessI4 ImprovedproductivityBusinessMix(bysegment)

LossRatioClaimsFrequencyClaimsSeverityExpenseRatioBusinessDevelopment

(vs.plan)UnderwritingQualityAuditClaimsQualityAuditHeadcountMovementManagedSpendingMovementL1 UpgradestaffpetenciesL2 AccesstostrategicinformationStaffProductivityStaffDevelopment(vs.plan)StrategicI/TAvailability

(vs.plan)ObjectivesMeasuresLeadIndicators(PerformanceDrivers)LagIndicators

(CoreOueMeasures)LearningInternalCustomerFinancialAREAPRODUCTIONMANAGERDIRECTORZONEMANAGERTEAMLEADERSampleTargetforSpecificTimeWindow

FromTo21hours19hoursReduceareacycletimefrom22to8daysReduceoverallcycletimefrom73to28daysStrategicBusinessObjectiveReducezonecycletimefrom7to3daysReduceteamcycletimefrom30to11hours5.1days4.6days17days15days48days44daysTop-DownandBottom-UpLinkedPLANACTUALQuarterlyTimeWindowTargetPLANACTUALQuarterlyTimeWindowTargetPLANACTUALQuarterlyTimeWindowTargetPLANACTUALQuarterlyTimeWindowTargetObjectives,measuresandtargetsateachlevelhavetobealignedtop-downandbottom-upExample:CarManufacturerReduceoverallcycletimefrom73to28daysMeasuresshouldbecascadedaswiththisrailwayutilityManagingDirectorFunctionalManagersAreaManagersDepartmentManagersSectionManagersWorkGroup,

SupervisorsandStaffBusinessobjective:

“92%oftrainsto

arrivewithin5

minutesofpublished

time”Punctuality%leaveon

timeMaintain

scheduleCrew

available%trains

availableTrainsin

wrong

locationTrains

rejectedby

operations%trains

available

rightformed%trains

operational%trains

pending

wheelsets%wheelsets

toplanWheellathe

downtimeExampleBSC:TelcoSupp.ClientKeyIssuesTelcoSupp’svisionistobethemostsuccessfullocaltelmunicationssolutionsproviderProducerandsupplierofproductsinthetelmunicationsindustry.Visionistobethemostsuccessfullocally.Alignmentofleadershiptomeetlong-termgoals.Increasingcustomerdemands.TheTelcoSupp’sBSCobjectivesweredesignedtosupporttheVisionFinancial/ShareholderDeliversustainablegrowthinprofitability.Maximiseshareholdervalue.Ensurefinancialindependencebyfundingfuturegrowthandinitiativesinternally.OrganisationalLearningAttractandretainappropriateskills.Developalearningculture.municateeffectively.Applyemploymentequityprincipals.Empowerouremployees.Developapanyteamspirit.Define,municateandlivethevalues.InternalBetheindustrybenchmarkbyanymeasure.InvestintherightprojectstoensureourfutureBeacentreofpetence.Developabalancedrelationshipwiththeparentpany.BusinessPartnersCustomer:Increasemarketshare.Broadencustomerbase.Improveservicequalitytoexceedcustomerexpectations.Buildlongtermcustomerpartnerships.Alliances:PursuealliancestoenableusinourmarketSuppliers:Buildlongtermsupplierrelationshipsmunity:ActivelysupportSouthernAfricandevelopmentAmeasurementsystemwillassessprogresstowardstheobjectives.VisionBenefitsConcernsmentsonTelcoSupp’sBSCCascadedintotheorganisationtocreatefocus.ParentpanyhasadoptedBSCconceptandsuggestedBSCdevelopmentandimplementationforotherdivisions.Strong‘businesspartner’andorganisationallearningfocus.Highnumberofobjectives(21).Accountabilitiesrestwithafewindividuals.BalancedScorecardmentsTelcoSupp’sBSCmeasuresandaccountabilitiesObjectivesFinancialDeliversustainablegrowthinprofitabilityMaximiseshareholdervalue.AgreedMeasure(s)Operativeprofitonturnover.ROCE.EVA.Ensurefinancialindependencebyfundingfuturegrowthandinitiativesinternally.CashflowAccountabilityFinancialDirectorFinancialDirectorFinancialDirectorBusinessPartnersObjectivesMarketShareIndex(aggregatesegments)Customers’supplierevaluations.Customersurveys(includesapreferredsupplierassessment.)Numberofcustomerscontributing>5%ofturnoverovertotalcustomersIncreasemarketshare.Broadencustomerbase.Improveservicequalitytoexceedcustomerexpectations.Buildlongtermcustomerpartnerships.Pursuestrategicalliancestoenableusinourmarket.ActivelysupportSouthernAfricandevelopment.Marketshareinspecificbusinesssegments(asmeasuredintheMarketShareIndex)ValueofbusinessviaBlackEconomicEmpowermentpanies.IPPcredits.%purchasevolumeviaframeagreementsBuildlongtermsupplierrelationshipsAgreedMeasureMarketingDirectorMarketingDirectorMarketingDirectorMarketingDirectorFinancialDirectorFinancialDirectorAccountabilityCustomersAllian-

cesSupp-liersm-uniryTelcoSupp’sBSCmeasuresandaccountabilities(cont.)InternalBetheindustrybenchmarkbyanymeasure.BeaCentreofpetence.Developabalancedrelationshipwiththeparentpany.ObjectivesRefertoQualityMeasurementSystem.Numberofsignificantcentresofpetence.ProportionofownbusinessversusmissionbusinessInvestintherightprojectstoensureourfutureNetpresentvalueofallprojectbusinesscasestobeimplementedAgreedMeasureOperationsDirectorCEOCEOExecutiveAccountabilityMarketingDirectorOrganisationalLearningObjectivesStaffturnoverNumberofunfilledpositionsTrainingandeducationexpenditureas%ofpayroll.RefertoQualityMeasurementSystem.Attractandretainappropriateskills.Developalearningculture.municateeffectively.Applyemploymentequityprincipals.Empowerouremployees.DevelopaSiemensteamspirit.Define,municate&livethevalues.%Blackstaffpenetration.%Blackandgenderrepresentivity.AgreedMeasureRefertoQualityMeasurementSystem.RefertoQualityMeasurementSystem.RefertoQualityMeasurementSystem.HRDirectorHRDirectorHRDirectorHRDirectorHRDirectorHRDirectorHRDirectorExecutiveAccountabilityExampleBSC:ChemCoClientKeyIssuesChemConeededastrategytomanageadiverseportfolioinahighlycyclicalmarketManufacturerofpetrochemicals:PolymersandmonomersforuseasindustrialfeedstocksPrimarilymodityproductsApproximately6000employeesOneyearintoatwoyearBusinessTransformation?projectHighlycyclicalmarket.Widevarietyofproductandcustomertypeswithintheportfolio.Majorleadershipchangeunderway.ShareholderCustomerInternalProcesses

SocietyEmployeeLearning&GrowthDevelopaLearningOrganisationFocusonMarginEnhancementStrivetoContinuousEnhancementManageValueAddingProcessEffectivelyChampionResponsibleCareFosterProductStewardshipDemonstratemunityLeadershipProvideCustomerValueDevelopTotalBusinessRelationshipsBuildFinancialStrengthAchieveProfitableGrowthDeliverResultstoShareholderCreateaClimateforResultsChemCo'sBalancedScorecardtranslatedthefirm’sstrategyintostrategicobjectivesacrossfiveperspectivesBenefitsConcernsmentsonChemCo’sBSCDefinedlinkagestoultimatelyprovideshareholderreturns.Introduced“society”dimensiontoindicatemunityresponsibility.Reducefocustothirteenkeyobjectives.BalancedScorecardmentsBroadandgenericobjectivesandmeasures:Notspecifictotheorganisation.Couldapplytootherpanies.EmployeeLearning&GrowthPerspectiveSocietyPerspectiveInternalProcessesPerspectiveShareholderPerspectiveCustomerPerspectiveTheobjectivesweretranslatedintointoasetofkeystrategicmeasuresProvidesuperiorvaluetoourcustomersbysupplyingthemwithproductsandservicesthatmeettheirneeds(totalvaluepackage).Formrelationshipswithcustomerswhichallowustofullyunderstandandaddresstheirneeds.C1 ProvideCustomerValueC2 DevelopTotalBusinessRelationshipsSH1 DeliverResultstoShareholdersSH2 BuildFinancialStrengthSH3 AchieveProfitableGrowthDefinitionStrategicPriorityDevelopanduseourleadershiptoempowerandgainmitmentfromallemployeesthusachievingexceptionalbusinessresults.ImproveourskillsandknowledgebydevelopingpeopleandadaptingbestpracticesfoundwithinChemCoandfromexternalsourcestorealiseallofourpriorities.Bealeaderinourindustrybyourachievementsinsafety,health,environmentandriskmanagement.Qualifyasanindustryleaderbydevelopingmutuallysupportiverelationshipswiththemunitiesinwhichweconductbusiness.Integratehealth,safety,environment,economic,andethicalconsiderationsateverystageinthelifecycleofourproducts.Effectivelymanagetheselectionofcustomersandproductofferings(includingtechnology&service)soastomaximisemargins.Bethelowcostproviderofproductsandservicesbyachievingpetitiveexcellenceinallourbusinessprocesses.ContinuouslyseekwaystoimproveandsimplifyChemCo’sprocessestoachieveourstrategicbusinessobjectives.Manageourbusinessestoachievethereturnsexpectedbyshareholders.ManageourbusinesssothatwearecashpositiveandabletomeetcapitalfundingrequirementstosustainChemCothroughthebusinesscycle.Achieveincreasedsizeinourbusinesstoprovideincreasedvaluetoshareholders.E1 CreateaClimateforResultsE2 DevelopaLearningOrganisationS1 ChampionResponsibleCareS2 DemonstratemunityLeadershipS3 FosterProductStewardshipI1 FocusonMarginEnhancementI2 EffectivelyManageValueAddingProcessesI3 StriveforContinuousEnhancementShareholderCustomerInternalProcessesSocietyEmployeeLearningandGrowthCustomersatisfactionindexRetentionoftargetedcustomersMeasuresLeadershipeffectivenesssurveyratingmunicationsEmployeesatisfactionBestpracticesidentifiedEmployeecontributionSafety,health,environment&riskresults.munityopinionratingProductstewardshipparticipationContributionmargin

CashflowcycletimeCostexcellenceratingFixedcostproductivityProductdevelopmentcycletimeBusinessTransformation/SAPbenefitsReturnoncapitalemployedEconomicvalueaddedNetcashflowTotalrevenueExampleBSC:ManCoClientKeyIssueManCorequiredatooltofocusandaligntheorganisationLargepetrochemicalmanufacturer.BSCwasaponentofalargetwoyeartransformation?project.Significantcostreductionrequiredtomaintainprofitability.Needtofocusandaligntheorganisation.AccountabilityandtargetsareseenaskeyponentsofManCo’sBSCShareholder/FinancialCustomerGrowth/LearningInternalProcessesKPI(Area)ATargetmentsReturnonNetAssetsPBIT/Netassets(Qtr)ProfitaftertaxCashflow4-12monthsprojection(Mth)UnitcostKPI(Area)ATargetmentsCustomersatisfactionindex%Conformancetoagreedofferingpercustomer.(Qtr)ProductMixOptimisationKPI(Area)ATargetmentsValuecreatedbyProjectPortfolioNPVof

newanddevelopingprojectsat22%discountrate(WACC)vstargetNPV(Qtr)

CorepetenciesTakenoffuntilasuitablemeasureisdefinedKPI(Area)ATargetmentsProcessefficiency

EnvironmentIndex:releases,resourceconsumptions,re-mediation&pliance(Mth)SafetyandHealthProductionValue(Mth)DIIRincludingoccupationaldiseasesTotalCostpertonofproduct(Mth)%AdherencetoTargetMix(Mth)Tonmarketableproductpergigajoule(Mth)Actualvstarget(Mth)PeopleKPI(Area)ATargetmentsEmployeesatisfaction/climatewindowAffirmativeActionIndex:Leadershipvalues,JobsatisfactionandDevelopmentProductivity(Qtr)AAspectrum%(Qtr)ProductionTechnicalIntegrityIndex:tobedefinedNote:Accountabilitiesandtargetsnotshowntomaintainclientity.BenefitsConcernsmentsonManCo’sBSCSignificantmanagementbuy-inanduseoftheBSC.TwoyearsafterintroductiontheBSCremainthekeyfocus/managementtoolfortheexecutivemittee.‘People’dimensionaddedtoindicateakeyfocusarea.BSCfocusedonmeasuresnotobjectives.Aftertwoyears,executivesconsiderfifteenobjectives/measurestoomanytofocusonsimultaneously.BalancedScorecardmentsExampleBSC:OilCoClientKeyIssueOilConeedtoaddressinternalsoftissuesSignificantplayerinthedownstreamoilbusiness.Successfulorganisationlookingtomaintainandgrowposition.Lowemployeemoralandlackofconfidenceinleadership.Lackofunderstandingoforganisationsvisionandstrategy.Growthinmarketplace.VisionBSCofalargedownstreamOilpanyFinancial/ShareholderObjectivesCustomersandPartnersObjectivesInternalProcessesObjectivesLearningandInnovationObjectivesMaximiseshareholdervalue.Realgrowthinoperatingprofitwithalongtermobjectiveof10%.Keepunitcostincreasebelowinflation.IncreaseMarketShareAddsignificantvaluetocustomers.Ensureclearroles,responsibilitiesandaccountabilitiesforallourpeople.Mobilisetheorganisationtowardsthevision.EnsurestrategicadvantagethroughIT.Ensureeffectiveperformancemanagement.Increasediversityintheworkforce.Empowerouremployees.Stimulatecreativityandinnovate.BenefitsConcernsmentsonOilCo’sBSCHalftheobjectivesfocusonsoftissues,toaddresscurrentinternalissues.Reducednumberofobjectivestoallowforgreaterfocus.Noobjectivetodetermine/focusoninternalefficiencies.BalancedScorecardmentsOilCodesignsmeasuresandassignedaccountabilityforalltheirobjectivesLearningandInnovationObjectiveMeasuresAccountable

PersonEnsureeffectiveperformancemanagement1) Employeeswithdevelopmentplans(lead)2) Levelofacceptanceofmeritappraisalsystem(lag)3) Percentageofemployeesreceivingquarterly

performancereviews(lead)4) Levelofbeliefthatperformancedrivesrewardandrecognition(lag)HRDirectorIncreasediversityintheworkforce1) Staffmix(lag)2) Diversityawareness/attitude(lag)CEOEmpowerouremployees1) Employeebeliefthattheyareempowered(lag)OperationsDirectorStimulatecrea