Managing Innovative Strategic HRM: The Balanced Scorecard Performance Management System at ITC Hotels

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Managing Innovative Strategic HRM The Balanced
Scorecard Performance Management System at ITC
Hotels

• Bhatnagar, J. Puri, R. and Jha, H. M. South Asian
  Journal of Management, 2004, 11(4), 92-110.

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Outline(1)

• Abstract
• Introduction
• Innovative strategic HRM Adoption in Indian
  Organizations
• Integration of Strategy Formulation and
  Implementation Through Innovation Performance
  Management System The Balanced Scorecard
  Approach
• Research Lacunae Role of HR and Innovation

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Outline (2)

• Research Design
• Research Site
• The Performance Management Architecture Old vs.
  New
• An Illustration of the Customized balanced
  Scorecard and Career Review Form
• Effectiveness of Innovation The Supportive
  Culture
• Implications Institutionalizing the Changing HR
  Role

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Abstract

• This study attempts to explore the use of SHRM,
  as a lever for innovation, specifically through
  the implementation of a balanced scorecard
  approach, as an innovative performance management
  tool.

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Introduction(1)

• Four kinds of innovation
• Product innovation
• Innovations in Product Technology
• Production Processes and
• Work Organization and HRM Practices.
• Two main patterns of innovation
• Products and technological systems
• Job design, work organization and HRM practices

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Introduction(2)

• A resource-based view on innovation
• Organizational innovative capabilities rest in
  the organizing principles and social
  relationships that exist between people.
• Focus on HR strategies and identify the promotion
  of a creative environment as a key to innovation.
• Thus, exemplifying that an innovative
  intervention needs, a strategic HRM focus as well
  as a supportive culture.

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Innovative Strategic HRM Adoption in Indian
Organizations(1)

• Free market economy
• Multinational organizations
• Globalization and internationalization of
  domestic businesses
• Unbridled imports

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Innovative Strategic HRM Adoption in Indian
Organizations(2)

• Concerns
• Total quality management
• Incentives to export
• Demographic changes in the employee profile
• Retaining and redeployment of workforce
• Focus on performance appraisal and performance
  based incentive systems
• rightsizing

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Innovative Strategic HRM Adoption in Indian
Organizations(3)

• The typology of managerial innovation has not
  diffused too many developing countries and their
  organizations.
• Lesser research has been conducted in the filed
  of SHRM and its innovative practices in India.

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The Balanced Scorecard Approach(1)

• Quality management
• Customer retention
• Research and development
• Innovation
• There are not limited to only, measurement-based
  concepts like the balanced scorecard or
  shareholder value, but include concepts like KM
  and e-business.

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The Balanced Scorecard Approach(2)

• Human Capital Appraisal
• People Capability Maturity Model
• Balanced scorecard
• Ties business strategy to HR strategy
• Performance management system serves as the lever
  for change within the organization, besides
  aligning strategy with HRM goals and objectives.

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Research Lacunae Role of HR and Innovation(1)

• The change process can take one of three routes
• The maintenance of current competencies,
• The recombination of new ones with old ones which
  requires a focus on learning and innovation or
• The building of completely different ones which
  requires a great deal of experimentation.

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Research Lacunae Role of HR and Innovation(2)

• The case study examines the role of HR, and the
  culture that supports this role and the
  implementation of an innovative performance
  management intervention.

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Research Lacunae Role of HR and Innovation(3)

• In Ulrichs model (1997)
• two strategic roles of HR
• Strategic Partner
• Change Agent
• Two tactical roles of HR
• Administrative Expert
• Employee Champion

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Research Design

• Based on the interaction with 45 multiple
  stakeholder of the organization.
• The Vice President, HR, also provided insights
  into the system.
• Secondary data sources and evidence form
  organization.
• Based on an open-ended interview with 20
  employees, including top, middle and lower
  managerial levels.

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Research Site

• ITC Maurya Sheraton is a 27 year old hotel,
  situated at Delhi.
• It employee 1300 people and is known for its
  leadership position in this sector.

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The Performance Management Architecture Old vs.
New(1)

• Fixed package with very little variable component
• take home earning
• A balanced scorecard approach customized to the
  needs of the organizaiton

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The Performance Management Architecture Old vs.
New(2)

• Phase 1 Planning the measurement
  architecture-the balanced scorecard
• Customer perspective
• Financial perspective
• Internal perspective
• Employees perspective
• Social perspective
• Phase 2 the design issues
• Phase 3 Implementation and Review

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An illustration of the customized balanced
scorecard and career review form(1)

• Customer Perspective
• Internal Process
• Financial Perspective
• Employee Perspective
• Societal Perspective

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An illustration of the customized balanced
scorecard and career review form(2)

• The Career Review Form
• Career Enhancement
• Remuneration Scheme through value index
  performance pay scheme (PPS)

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Effectiveness of Innovation The Supportive
Culture(1)

• Hard and soft interventions must go together
• The case has brought forth the innovator role of
  HR along with the top management and line
  functions commitment and learning, that has made
  this performance management intervention
  innovative and successful.

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Effectiveness of Innovation The Supportive
Culture(2)

• People Oriented Culture
• Role Culture
• Defensive Culture
• Evolving Cultures

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Implication Institutionalizing the Changing HR
Role(1)

• Automating the Balanced Scorecard
• About half of large US firms have already adopted
  the BSC.
• BSC requires IT support and numerous software
  vendors
• Thus it is important that the vendor which
  customizes the automated balanced scorecard to
  the unique needs of ITC, should be selected with
  further reearch.

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Implication Institutionalizing the Changing HR
Role(2)

• The role of HR
• Strategic partner
• Innovator
• Enabler
• Monitor, and
• Change agent