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A balance scorecard model for Indian Political parties.


HRM ASSIGNMENT
CHETAN BHAWSAR PGP04019 SECTION C

A balance scorecard model for Indian Political parties.


Over a decade after Robert Kaplan and David Norton introduced the Balanced Scorecard as a strategic planning model in 1992, evidences of successes from the private sector are being reported in the business literature. However, little information is available on how to implement the Balanced Scorecard for a political party so that effective and efficient public operation can be made a possibility. Much different from the private companies, political parties are often required to be accountable towards the spending of public money. RTI enables a any citizen to gain information about government spending, hence it is increasingly important to maintain a check on expense. Tight operating budgets, heavy workloads, and confusion about how to effectively perform strategic planning are all contributing factors which can cause political leaders to shy away from strategic planning initiatives. However, without a mission and values-driven strategy in place to guide long and short-term decision-making, a Political partys ability to maximise public welfare, operate within budget allocation, enhance human development index of the citizens, and meet stakeholders needs is compromised. This article discusses what the Balanced Scorecard is, describes implementation guidelines, and proposes practical scenarios of how to implement the Balanced Scorecard for an Indian political party.

Introduction
After Indias Independence in 1947, the first prime minister, Jawaharlal Nehru laid down his thoughts on the approach towards governance. Under the Nehruvian approach, it was believed that the concentration of power should be as less as possible in a few hands and for this he felt the need for presence of strong and widespread bureaucratic system that would put a check on the work of private players. The thought was quite noble, Private players would work towards development of economy and public agencies will regulate the private players against the exploitation of the citizens. But this scheme seems no longer successful. The government officers put in place to check the exploitation have gone corrupt and they themselves are widely exploiting the common man. Since Independence, the challenge continues today as public administration struggles with issues of accountability. The measurement element within the new public management paradigm has led to further interest in the development of party report cards, where the opposition party emphasises doing analysis of the promises made by the political party in election manifest with the promises fulfilled. Report cards can provide quantifiable measures of benefits from the state income in taxes and related government agency activities and expenditures. These report cards have the potential to provide a mechanism for both building administrative capacity and for focusing attention on issues of government accountability. The ultimate administrative goal in democratic societies is to create transparent, professionalized, rationalized, decentralized, and participatory political parties with administrative processes that are accountable, credible, and objectively measured. Broadly, balance

scorecard can bring improvement in two ways, first it can become a measurement instrument to guide performance of the political partys performance in public administration and provide regular checkpoints to demonstrate whether the targets are being met. Second, it can enhance accountability and responsibility of political party.

Balance Scorecard overview


The Balanced Scorecard, developed by Robert Kaplan and David Norton, is a comprehensive method of measuring organizational performance that is better than the traditional single goal and efficiency based measures of performance. The BSC focusses on the single goal and efficiency parameters along with a family of measures intended to assess the overall value created by an organization and incorporates the elements of financial responsibility, service to citizens, work process improvement, and human capital development as bases for measuring organizational success. According to Kaplan and Norton, exclusive reliance on financial indicators could promote behavior that sacrifices long-term value creation for short-term performance. Thus BSC focusses on capacity building and responsiveness of the organization. The BSC is a comprehensive system of measurement aimed at determining whether management is building the infrastructure necessary to sustain organizational and institutional resilience and accountability. The BSC measurement system includes four perspectives: financial performance, customer service, work processes and the learning and growth of employees. The measurement criteria are measured under 4 heads, Financial Perspective: Emphasis is on cost and the ability to provide the best value to customers and stakeholders. Are costs minimized? Are the current financial policies the most efficient? Customer Perspective: The focus is on the agencys overall responsibility to meet the customers needs in the most efficient and effective manner. Who are the customers and stakeholders? What are their needs and are they being met? Internal Business Processes: The focus is on performance expectations and ensuring the proper processes and resources are available and implemented to maximize performance. What can be done to add value to the service being provided? What processes add value? Learning and Growth: The emphasis of this perspective is on the employees ability and the organizational structure needed to achieve the agencys goals. Are the employees given the right tools to perform effectively? Is sufficient technology systems installed to achieve the goal?

The greatest value of the BSC is the understanding that organizational performance is based on a variety of factors that contribute to organizational success. Moreover, these different perspectives capture both lag and lead indicators of outcome, providing a key improvement over a reliance on just financial measures. The BSC also includes another major goal: linking the organizations strategy to the actions of organizational subunits. Instead of an ad hoc collection of indicators, the BSC links measurement to strategy. By linking each of the four basic measurement elements to the organizations strategy, management has a clear means for determining if organizational actions support the organizations strategy. This innovation is of particular value since in large complex organizations subunits often engage in activities that do not support the overall organizational strategy. Thus, each subunit must

produce its own scorecard showing how its activities support the total organizational strategy. According to Kaplan and Norton, By clearly defining the strategy, communicating it consistently, and linking it to the drivers of change, a performance-based culture emerges to link everyone and every unit to the unique features of the strategy. The simple act of describing strategy via strategy maps and scorecards makes a major contribution to the success of the transformation program. In this way, goals and actions of the organization, departments, and individuals can be combined and coordinated to improve outcomes.

Adopting the balance scorecard for Indian Political Parties


As mentioned in the earlier paragraphs, BSC was originally intended to be used by organizations that have profit motive but it can be adopted to serve as a measure of performance of public agencies. While developing BSC, Strategy and Vision of the political party should be kept in view and indicators of performance should be chosen such that they complement each other. The following is a suggestive framework for development of BSC for Indian Political parties.

1. Economy (Finance Perspective): The topline of the Government finances is mostly from Direct/Indirect Taxes and Selling of Resources plus exports and the bottomline constitutes of fiscal spending and imports. Unlike a profit making company, the target of government is mostly growth of economy and development. Hence the financial target of the political party should be to minimise the differences between topline and bottomline. To spend all taxpayers money in growth and development. Indices should be Objectives Grow Economy Balance between Income and Fiscal spending Improve tax system by sourcing income from non tax sources Measures GDP Index Fiscal deficit Governement income tax income Target Maintain 8% real growth rate Maintain deficit below 4% of GDP Improve non tax income by 12%

2. Social Justice( Customer Perspective): Customers of a ruling political party are the citizens. The citizens have given their vote and money in the form of taxes to the political party and they expect the ruling party to bring improvement in the system Objectives Measures Target Develop Health Institutions Number of primary /secondary Increase the healthcare health care center centers by 10% Gender equality Promote gender equality Increase participation of women in workforce by 20% Enforce right to speech and Number of website block/ Reduce the number of website freedom of media news block requests from block requests by 5% government

3. Internal Business Processes: Government in India is still working with the old methods leading to inefficiency and un accountability. They need to improve internal processes to improve transparency and effectiveness. Objectives Measures Target Ensure online auction of Cost saving from traditional Reduce costs by 10% natural resources wherever method efficient Implement E-governance Number of state departments Achieve 10% penetration projects functioning in online mode. 4. Sustainability (Learning and Growth): Investment in future and growth of the society is the prime reason any political party is voted to power. The future needs of society are thus important and efforts should be made to sustain the the growth. Objectives Measures Target Education Number of school/colleges Increase number of schools with quality education and colleges by 10%, maintain quality by deregulating schools with low quality education standards Fund and accelerate Number of projects started Achieve 20% growth infrastructure projects and number completed multiplied by value of projects Investing into renewable Reduction in use of non Achieve 5% difference from resources renewable resources and the previous figures increasing use of renewable resources Tackle Climate change Pollution control boards Maintain growth of such report on industries against industries below 3% climate. Job building measures for Develop more vocational Increase funding of small scale poor training institutes and businesses by 10%, number of investment agencies trained people to increase by 15%

Conclusion:
An application of the BSC to public agencies is particularly appropriate for complex, transparent, and mature organizations with diverse stakeholders. To be effective, the strategic planning process should be adapted to the particular needs and goals of each organization to identify appropriate perspectives. In general, however, it would include four: financial, citizen service, internal work processes, and learning and growth of employees. An advantage of the BSC is that reform does not end with increased efficiency, regardless of organizational mission and public needs. The strategic process of creating the BSC would attempt to reform public organizations so that they would better meet the needs of the citizens and the missions of their agency. In terms of internal work processes and human capital, the BSC has the potential to increase institutional capacity. By creating a more comprehensive overview of the agency, the BSC has the potential to encourage more long range planning, create more well-rounded objectives, and provide taxpayers with a clearer vision of where, how and what their taxes are being spent. Despite the promise of reform, the BSC is not a panacea. Successful implementation is likely to be limited to complex, mature and transparent public agencies

References:
1. Klingner, Donald. Public Personnel Management and Democratization: A View From Three Central American Republics. Public Administration Review 1996, 56(4): 390-99. 2. Kaplan, Robert, and David Norton. Transforming the Balanced Scorecard from Performance Measurement to Strategic Management. Accounting Horizons 2001, 15(1): 87-105. 3. Kaplan, Robert, and David Norton. The Balanced Scorecard: Translating Strategy into Action. Harvard Business School Press: Boston, MA, 1996 4. Niven, Paul R. Balanced Scorecard Step-by-Step for Government and Nonprofit Agencies. John Wiley & Sons, Inc: Hoboken, NJ, 2003. 5. Drucker, P. F. (1990). Managing the non-profit organization. New York: HarperCollins Publishers 6. Robert S. Kaplan, The Balanced Scorecard and Nonprofit Organizations, Balanced Scorecard Report, November-December, 2002. pp. 1-4.

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