Performance Appraisal Report

Performance Appraisal
Term Report
Submitted to: Syed Jahangir Ali
Submitted by:
Kinza Khalid
Sehrish Rizvi
Zehra Roofi
Zeeshan Khan
Table of Contents
Continental Biscuits Limited..............................................................................................4
1 Company’s Background....................................................................................................4
1.1 Company’s Vision.....................................................................................................5
1.2 Company’s Mission...................................................................................................5
1.3 Company’s Strategy...................................................................................................5
1.3.1 Innovations as a part of Growth Strategy...........................................................5
1.4 Company’s Management Team.................................................................................6
2 Human Resource at CBL..................................................................................................7
2.1 Employability.............................................................................................................7
2.2 Diversity.....................................................................................................................7
2.3 Health and Safety.......................................................................................................9
3 About Human Resource Director......................................................................................9
3.1 Recruitment Method at Continental Biscuits...........................................................10
3.1.1 Person Specification..........................................................................................10
3.1.2 Company Recruitment Method.........................................................................11
3.1.3 Internal Sources................................................................................................11
3.1.4 Internal Job Posting...........................................................................................11
3.1.5 External Sources...............................................................................................12
3.2 Selection Process at Continental Biscuits Limited..................................................12
4 Performance Management System.................................................................................14
4.1 Why do you need a Performance Management System?.........................................14
4.2 What do you mean by Performance Management System?....................................14
4.3 What is wrong with your existing system?..............................................................15
4.4 What objective does performance management seek to achieve? ..........................16
4.4.1 PM focuses on results rather than behaviours and activities............................17
4.4.2 Aligns organizational activities and processes to the goals of the organization
....................................................................................................................................17
4.4.3 Cultivates a system-wide, long-term view of the organization ........................17
4.4.4 Produces meaningful measurements ................................................................18
4.4.5 Other Benefits of Performance Management System:......................................18
4.5 What are your concerns About Performance Management?...................................19
4.6 What does a Performance Management System involve?.......................................19
4.6.1 The process:......................................................................................................19
4.6.2 Define Performance:.........................................................................................20
4.6.3 Facilitate Performance:.....................................................................................21
4.6.4 Encourage Performance:...................................................................................21
4.7 How does it work?...................................................................................................21
4.7.1 Setting Departmental Objectives......................................................................21
4.7.2 Communicating employee performance expectations......................................22
4.7.3 Maintaining ongoing performance dialogue.....................................................22
4.7.4 Conducting annual performance appraisals......................................................22
4.7.5 Addressing poor performance...........................................................................23
Performance Appraisal Report on Continental Biscuits Page 2

4.7.6 Supporting Employee Development.................................................................23
5 Balanced Scorecard (BSC).............................................................................................25
5.1 Background:.............................................................................................................25
5.2 Balanced Scorecard – The Basic Philosophy...........................................................26
5.3 Balanced Scorecard BSC - The idea in brief...........................................................26
5.4 The idea in practice..................................................................................................27
5.4.1 Translating the vision........................................................................................27
5.4.2 Communicating and linking..............................................................................28
5.4.3 Business planning.............................................................................................28
5.4.4 Feedback and learning......................................................................................28
5.5 The Balanced Scorecard –Measures That Drive Performance................................29
5.6 Benefits of implementing BSC................................................................................30
5.7 Creating the BSC model - How to implement?.......................................................30
5.8 Cascading the scorecard...........................................................................................32
5.9 Balanced Scorecard: The Process............................................................................32

Continental Biscuits Limited
1 Company’s Background
Incorporated in 1984, the success story of LU in Pakistan began with
the initiative of Hasan Ali Khan (the founder of Continental Biscuits),
who signed a joint venture agreement with Generale Biscuits, the
global manufacturers of the LU range, which was subsequently
acquired by the Danone Group. Expansive investments were made
including the import of technology and professional expertise from
abroad. The first undertaking was to set up a factory and establish
distribution centers in the country with the ultimate objective of
commencing operations and marketing our products in Pakistan. CBL
thus started its' operations in the country since September 1986 with
an initial strength of 200 employees.
The company first introduced its' innovative brands - TUC, Prince and
Candi which proved to be an instant success. With global merger of
Generale Biscuit and the Danone Group, a more comprehensive range
of products and technical know-how became available to CBL. The
company at present has an outstanding portfolio, under its power
brands of TUC, Prince, Tiger and Candi. These brands have an array of
products that falls into the category of plain biscuits, cream variants,
crackers and ingredients based.

1.1 Company’s Vision
Company vision is continued expansion in the biscuits manufacturing

and marketing for not only meeting the local demand but to prepare
for WTO and SAFTA by becoming capable of meeting the regional
demand.
1.2 Company’s Mission
Throughout the world, to ensure that people can grow, live better and
thrive to be full by providing them daily with better food, a greater
variety of tastes and healthier pleasure."
The purpose of this Mission is to guide and to inspire, rather than to

distinguish us. What does distinguish us is the way in which we fulfill
this Mission.
1.3 Company’s Strategy

CBL's strategy is to be a leader in the biscuit business driving long-
term sustainability and delivering sustainable performance for the
company, environment and the community. This includes delivering
consistently on our promise to consumers, serving our customers,
developing and engaging actively with our employees, delivering
superior financial results to our shareholders and minimizing our
impact on the environment and interacting constructively with the
communities in in which we operate.
1.3.1 Innovations as a part of Growth Strategy
CBL's corporate philosophy is innovation, of products, strategies and

packaging. This passion with innovation has led CBL to introduce the
finest brands from the Danone portfolio in Pakistan.

Prince: Pakistan's premium range of sandwich biscuits is known for its
soft, creamy fillings. Consumers can select from a variety of flavors:
chocolate, coconut, strawberry, banana, vanilla, pineapple and prince
power milk.
TUC: In the cracker segment, CBL reigns number 1 with TUC and TUC
50/50. TUC-one of the first brands to be launched by CBL still stands as
the number 1 cracker. Loved for its light and crispy texture, TUC is
enjoyed by all. With toppings or on its own, TUC is a great snack.
Candi: One of the most innovative brands launched by CBL, the only
brown sugar biscuit in Pakistan; Candi: is, loved for its sweet taste and
crunchy texture.
Gala: Is, full of the natural goodness of milk and eggs. A wonderful
aroma, unique design and great taste are what set this brand apart
from the rest.
Zeera Plus: Fresh and tasty biscuits with the special taste of zeera.
Wah: The unique sugar glazed biscuit in a bite size.
1.4 Company’s Management Team

Our company is managed by the Board of Directors and the Corporate
Executive Committee.
The Board is comprised of executive and non-executive directors from
CBL and Kraft Foods, who are responsible for our corporate governance
and ultimately accountable for the company strategy, objectives and
performance.
The Company Chairman of the Board and Managing Director is
responsible for the management of the business and is assisted by the
Corporate Executive Committee. Each member of the executive

committee is responsible for a specific part of the business as well as
the overall organizational performance.
2 Human Resource at CBL

Our best ideas come from our best assets ‘Our People’.
2.1 Employability
In the current economic context where jobs change quickly, job

security and lifetime employment are no longer guaranteed. On the
other hand, companies may provide employment security which
means taking initiatives to
create greater employability for their employees, both within and
outside the organization.
We at CBL believe in providing employment security to our employees
through constant development of their skills, knowledge and
experience. This development enables our employees to take informed
decisions and thus contribute to increased learning. We believe in
empowering our employees to their fullest extent thus diminishing the
barrier between managers and employees which reaffirms concretely
that they a have a role to play in the performance of the company.
2.2 Diversity
Our commitment to diversity includes a range of initiatives that help

our employees work in an open, flexible and creative environment. We
actively encourage individuals to be themselves and use all of their
talents for the benefit of themselves and others. Some of our diversity
initiatives are as follows:
Mentoring:
Our employees are continuously learning being associated with
experienced colleagues in their respective fields. Mentoring not only
helps them develop professionally through means of constant feedback

on performance, but also motivates them to perform better, which
eventually helps us develop and retain potential employees.
Training & Development:
We provide our employees with an environment that fosters learning
and development, which enables them to realize their potential. CBL
has a fully-fledged training function which focuses on international and
local training, on-the-job training (OJT) and in-house training
programmes to ensure development of functional, technical,
managerial and soft skills. The company has recently taken initiatives
to develop a self-study and e-learning culture for the employees thus
adding more prospects for employee development.
Talent Management/Succession Planning Programs:
Talent management and development is of high priority at CBL. The
talent management programme commences by attracting the right
person for the position and ends at identifying the successor for each
key position in the organization. Our performance management system
enables us to identify potential employees who could be developed for
future leadership positions, through an integrated system of training
and development and reward management.
Recruitment of Females and Minorities:
We foster diversity through a variety of profiles, working across
functions, through which we nurture creativity, vitality and productivity
that directly contributes to our sustainable growth. Our desire is for a
diverse and inclusive workforce regardless of language, nationality,
work-style, learning style, culture, ethnicity, job level, gender, skills,
life experiences, physical abilities, thinking style and marital or family
status. A leading example of diversity is that 70% of employees
currently employed at CBL are females.

2.3 Health and Safety
Employee safety is a value at CBL. We are committed to providing a
safe and healthy work environment, preventing accidents. Employees
are accountable for observing the safety and health rules and practices
that apply to their jobs. They are expected to take precautions
necessary to protect themselves and their co-workers, including
immediate reporting of accidents, injuries and unsafe practices or
conditions. Employees also are expected to report to work free from
the influence of any substance that could prevent or impair them from
performing their jobs safely and effectively.
3 About Human Resource Director

Col. (Retd.) Fazale Naeem - HR & Technical Director: Col. Fazale
Naeem is an engineer by profession and has served in the Pakistan
Army for nearly twenty years. After retirement as Lt. Col. in 1978, he
worked for organizations in the private sector. He joined Continental
Biscuits Ltd. as Factory Manager at Sukkur in 1992 and was later
promoted as the H.R. & Technical Director of the company based at
the Head Office in Karachi; all the HR activity is done my Col. (Retd)
Fazale Naeem.
The Role of Human Resource in Continental Biscuits:
Continental Biscuits strategic Principals and a major goal are of profit

maximization and maximizing market share. They have HR policies
regarding strategic fit and strategic plan like business level strategy.
To measure the HR functions effectiveness and efficiency, LU focuses
on organization learning and employee productivity and use HR
scorecard in evaluating employee performance. However, the
company does not have any advanced Human Resource Information
System (HRIS) for employees’ database.

Recruitment and selection, and performance appraisal get
consideration and are incorporated in job analysis information,
whereas organization chart process chart are also important and used
in the promotion of employee.
LU has the system of job enrichment and job rotation for the
employees; it reviews job description after every one year (for some
particular job it could be two years). Forecasting techniques for future
vacant position in LU is usually done through trend analysis.
LU basically depends over centralized recruitment system rather than

decentralized, the most suitable recruitment media is advertisement in
newspaper and selection device to choose the new employee are
general mental ability test, integrity test structure interview.
Succession planning for filling the key position is present in the modern
world i.e. the world of internet provides CBL an advantage of internet
recruiting like cost effectiveness visibility and target only qualified
respondent. General economic condition and ratio analysis they have
to forecast the supply of out side candidates. The method of interview
is structured sequential and based on situational job related questions.
3.1 Recruitment Method at Continental Biscuits

3.1.1 Person Specification
Whenever a vacancy is created for a particular job, a job description is
prepared with theconsultation of the department. Department Head
gives all the requirements of the job.All this information is used to
prepare the essential requirements to be included in thepress
advertisement. The information is not documented; it is just a verbal
discussion.

3.1.2 Company Recruitment Method
The Company uses ‘Company-self Recruitment’ method and also the
outside agency recruitment method for new employees.
Because CBL is a huge organization with a lot of employees,
outsourcing of recruitment is essential and very important for efficient
and effective performance of organization goals and objectives. Also, in
order to provide opportunity to individuals from all walks of life, it is
very important that continental biscuits provide equal opportunity
toeveryone, also to those who cannot be reached directly.
3.1.3 Internal Sources

Continental Biscuits follow internal source of hiring when the work
related activity for the particular job vacancy is at a higher level and
requires a high level of familiarity with the current operations and
functions that the organization follows. External hiring would be a
second option because those chosen internally already know the
organization and can perform better and as quickly as possible that
saves time and cost on getting familiar with the company
The Management provides growth and career diversity employees
across the company for open positions at various levels / job grades.
Job openings within the organization are announced periodically on the
intranet and internal job boards for existing employees as and when
required necessary.
3.1.4 Internal Job Posting
The goal to ensure that all employees are made aware of and have the
opportunity to apply for open positions either before or concurrent with
the Company's consideration of external candidates for employment.
The following factors are informed about to employees as criteria for
internal hiring:
1. Eligibility

2. Job Criteria
3.1.5 External Sources
The second option that CBL follows is the external source. It uses two
of its features: the referral approach and the external search approach
which includes, press advertisements, and e-recruitment. The main
reason for referral approach is to find competent and self devoting
employees to carry forward the company goal of profit maximization
and growth strategy.
If there are any referrals, then those applicants are given priority but
they also have to go through the whole procedure, like submitting CV,
initial interview and final interview. However, if CEO asks HR to hire a
particular applicant on his referral, then the particular employee is
hired without going through the whole process.
3.2 Selection Process at Continental Biscuits Limited
The Selection criteria of the continental biscuit states that after pre
screening process they use to call the candidate who come up with
their required criteria.
• They call the candidate after reviewing their CV, before taking
interview in front of committee.
• Committee comprises of departmental head, HR Director, HR
manager and sometimes CEO is also involved.
• In some cases there is direct hiring departmental heads are not
involved.

• Basically in interview they check various things regarding
personality, passions (regarding job), consistency,
communication, general knowledge and educational skills.
• Then they calculate total score if he fulfills 70 percent of their
required skill than they short list that candidate and call him for
second interview on that day or next according to their
need/schedule.
• In second interview they ask the person some general question
regarding company and then ask him for salary and then
negotiate with him accordingly
• Calculate the final status point.
• Hire the person.
This is the general practice which continental biscuits are using in

hiring efficient employee for them.

4 Performance Management System
4.1 Why do you need a Performance Management

System?
Organizations need to grow and expand in order to remain
competitive. For this purpose they need to identify, retain and develop
high caliber human resource. The traditional performance appraisal
system is an exercise carried out in every organization with the
objective to achieve this purpose. However in recent years
organizations have far from being successful in achieving this aim
through performance appraisals…… ever wondered why?
Unfortunately, the concept of performance management means

something very specific, and much too narrow, to many managers.
They tend to equate it with performance appraisal – an exercise
typically done once a year to identify and discuss job-relevant
strengths and weaknesses of individuals or work teams.
What is missing is timely and continuous feedback about individual

performance, and ultimately it’s linkage to the organizational goals.
4.2 What do you mean by Performance Management

System?
Let’s start from what is traditionally being practiced in all organizations
- performance appraisal system. In this system, supervisors meet with
their subordinates once a year to discuss their performance against
objectives set at the beginning of the year. Far from being a dialogue,
it is a monologue where the supervisor gives feedback on performance
lapses and the meeting ends mostly with a ‘not-too-satisfied’

employee. Subsequently, all is forgotten about this appraisal until the
following year and the same exercise is repeated.
Performance appraisal is a necessary, but far from sufficient, part of

the performance management system. The latter is a continuous
process of improvement overtime, and it demands daily, not annual
attention. Performance management requires willingness and a
commitment to focus on improving performance at the level of the
individual or team every day.
It is a holistic process bringing together activities that contribute to

effective management of individuals and teams in order to achieve
higher levels of organizational performance.
4.3 What is wrong with your existing system?

As already indicated in my covering e-mail, CBL did not have a
performance management system but a performance appraisal system
in practice, which according to my knowledge came to a cessation
during the last two years. Even when fully operational, it only had a
few identified individual objectives which were not necessarily aligned
to organizational strategies. Moreover, people responsible in
appraising employees were either not trained to implement it properly
or did not understand the efficacy of managing the system effectively.
Without disclosing the identity, I would like to quote a recent episode,
when we needed to have a dialogue with one of our brand managers,
due to comments written on his/her performance appraisal that was
contradictory in nature. An incident akin to this can only happen when
performance appraisal is used more as a tool rather than a part of an
effective performance management system.

For this reason, I must admit that I need top management commitment
and support to make my suggested performance management system
effective in this organization.
4.4 What objective does performance management

seek to achieve?
Performance management seeks to identify, sustain and continuously
improve performance, at individual, departmental and organizational
levels and tend to develop high potential human resource. It brings
together many elements that make a successful practice of people
management, succession planning and in particular learning and
development.
Performance management is about establishing a culture in which

individuals and groups take responsibility for the continuous
improvement of business processes and of their own skills,
behaviour and contributions. It is about sharing expectations.
Managers can clarify what they expect from individuals and teams;
likewise individuals and teams can communicate their expectations of
how they should be managed and what resources will be required to
do their jobs effectively. It follows, that performance management is
about interrelationships and about improving the quality of
relationships - between managers and individuals, between managers
and teams, between members of teams and so on, and is therefore a
joint process. It is also about planning - defining expectations
expressed as objectives and in business plans - and about
measurement.
The old dictum is 'If you can't measure it, you can't manage it'. It
should apply to all employees, not just managers, and to teams as

much as individuals. It is a continuous process, not a one-off event.
Last but not the least, it is holistic and should pervade every aspect of
running an organization.
Key Benefits of Performance Management:
4.4.1 PM focuses on results rather than behaviours

and activities
A common misconception among supervisors is that behaviours and
activities are the same as results. Thus an employee may appear
extremely busy, but not be contributing at all toward the goals of the
organization.
4.4.2 Aligns organizational activities and processes to

the goals of the organization
PM identifies organizational goals, results needed to achieve those
goals, measures of effectiveness or efficiency (outcomes) toward the
goals, and means (drivers) to achieve the goals. This chain of
measurements is examined to ensure alignment with overall results of
the organization.
4.4.3 Cultivates a system-wide, long-term view of the

organization
An effective performance improvement process must follow a system-
based approach while looking at outcomes and drivers. For example,
laying off people will likely produce short-term profits. However, the
organization may eventually experience reduced productivity, resulting
in long-term profit loss.

4.4.4 Produces meaningful measurements
They are useful in benchmarking, or setting standards for comparison
with best practices in other organizations. They provide consistent
basis for comparison during internal change and improvement efforts.
They help ensure equitable and fair treatment to employees based on
performance.
4.4.5 Other Benefits of Performance Management

System:
• Depersonalizes issues: Supervisor’s focus on behaviours and
results, rather than personalities.
• Helps ensure equitable treatment of employees because
appraisals are based on results.
• Optimizes operations in the organization because goals and
results are more closely aligned.
• Cultivates a change in perspective from activities to results.
• Performance reviews are focused on contributions to the
organizational goals, e.g. forms include the question “What
organizational goal were contributed to and how?”
• Supports ongoing communication, feedback and dialogue about
organizational goals. Also supports communication between
employee and supervisor.
• Provokes focus on the needs of customers, whether internal or
external.
• Produces specificity in commitments and resources.
• Redirects attention from bottom-up approaches to top-down
approaches.

4.5 What are your concerns About Performance
Management?
Typical concerns expressed about performance management are that
it seems extraordinarily difficult and often unreliable to measure
phenomena as complex as performance. Since organizations are
rapidly changing, thus results and measures quickly become obsolete.
Translating human desires and interactions to measurements is
impersonal and even heavy handed.
4.6 What does a Performance Management System

involve?
• A process for communicating employee performance

expectations
• Maintaining ongoing performance dialogue, and conducting
annual performance appraisals
• A procedure for addressing employee performance that falls
below expectations
• A procedure for encouraging and facilitating employee
development
• Training in managing performance and administering the system
4.6.1 The process:
The broad process of performance management requires us to do

three things well:
1. Define performance
2. Facilitate performance

3. Encourage performance
4.6.2 Define Performance:

Performance definition ensures that individuals or teams know what is
expected of them, and that they stay focused on effective
performance. This is done by paying careful attention to three key
elements: goals, measures, and assessment.
Goal setting has a proven track record of success in improving

performance in a variety of settings and cultures. Goals direct
attention to the specific performance in question and mobilize effort to
accomplish higher levels of performance. Setting specific, challenging
goals clarifies precisely what is expected of an individual and leads to
high levels of performance.
Moreover, mere presence of goals is not sufficient. One must also be

able to measure the extent to which goals have been accomplished.
For e.g., a production goal of producing 30,000 tons per month is not
enough. Measures such as, wastage reduced to 10% per 30,000 tons
are more tangible.
In defining performance, the third requirement is assessment. This is

where performance appraisal comes in. Regular assessment of
progress toward goals keeps the employee focused.
Therefore, to define performance properly, one must do three things

well: set goals, decide how to measure accomplishment, and provide
regular assessments of progress.

4.6.3 Facilitate Performance:
A commitment to managing for maximum performance requires
performance facilitation that is, to eliminate roadblocks to successful
performance. Another is to provide adequate resources to get a job
done right and on time. Delays in receiving information, ineffective
work methods, all lead to obstacles.
Having eliminated roadblocks to successful performance, the next step
is to provide adequate resources – capital, material and human
resources.
A final aspect of performance facilitation is the careful selection of
employees. People who are ill-suited to jobs (both by temperament or
training) often leads to reduced productivity.
4.6.4 Encourage Performance:

To encourage performance, especially repeated good performance, it
is important to provide a sufficient amount of rewards that employees
really value, in a timely and fair manner
4.7 How does it work?
4.7.1 Setting Departmental Objectives

Before the exercise on performance appraisal can begin, supervisors
and managers need to ponder and decide what are the aims and
objectives of their respective departments in alignment with the
organizational mission and values. Getting this part right is important
as it will align departmental efforts in accordance with organizational
strategies and organizational development initiatives and serve as a
baseline against which individuals objectives will be set. It will be
useful to define the metrics against which these objectives will be
measured and benchmarks against which progress will be assessed.

4.7.2 Communicating employee performance
expectations
Supervisors shall meet with their employees, establish expectations
regarding their employees’ performance, specify how employees’
actual performance will be measured and their success determined,
and impart to them an understanding of how meeting these
expectations will contribute to the achievement of the organization’s
mission. The goals should be S.M.A.R.T. (Specific, Measureable,
Achievable, Realistic, and Time-related.). Based on departmental
metrics, employees should be clarified as to how their different goals
will be measured and against what standards performance will be
appraised.
4.7.3 Maintaining ongoing performance dialogue

Employees shall be responsible for meeting their performance
expectations. Progress toward meeting expectations shall be
measured, and discussed throughout the year.
When expectations change during the course of the year, supervisors

shall communicate these changes and modify work plans as necessary.
Modifications shall be signed and dated by both the supervisor and the
employee.
4.7.4 Conducting annual performance appraisals

At the end of the year, supervisors shall evaluate employees’
performance during the past year compared to their performance
expectations. They shall use verifiable information collected and

documented throughout the cycle to determine the extent to which
actual performance has met the expectations defined in the work plan.
Prior to discussing a completed performance appraisal (that is, an

appraisal containing ratings and descriptions of actual performance)
with an employee, a supervisor shall review the appraisal with the
next-level manager to ensure that ratings are appropriate and
consistent.
Supervisors shall discuss the appraisals with their employees. Both

supervisor and employee shall sign and date the completed
performance appraisal indicating that the
4.7.5 Addressing poor performance

When an employee’s performance falls below expectations at any time
during the performance cycle, the supervisor shall document the
performance deficiency and take actions, including (if appropriate)
disciplinary action, to assure that performance expectations will be
met within a reasonable period of time.
4.7.6 Supporting Employee Development

Many employees may express interest in growing in their current
positions or in furthering their careers in other business functions.
Supervisors shall work with them to identify strengths and weaknesses
and, if appropriate, to help them prepare an individual development
plan. Individual development plans may specify how employees can
more fully apply their strengths in their current positions, build up
areas of weakness, enhance their performance in their current
positions, or develop the skills and experience they will need for

possible future assignments. This includes defining a developmental
plan for the employee.

5 Balanced Scorecard (BSC)
5.1 Background:
‘One of the hot trends in management today is the balanced

scorecard. Though empirical research and many success stories show
that strategic measurement can work wonders, there are also many
cases where scorecards simply did not work. The most balanced
perspective is that these tools work well, when they are well
implemented.’ This is a quote from a US consulting company, which
identifies BSC as a tool for measurement.
On the contrary, BSC is a framework or what can be best

characterized as a ‘strategic management system’ that claims to
incorporate all quantitative and abstract measures of true importance
to the enterprise. It provides managers with the instrumentation they
need to navigate to future competitive success. It is a performance
planning and measurement framework, with similar principles as
‘Management by Objectives,’ which helps focus managers’ attention on
strategic issues and the management of the implementation of
strategy.
Traditional models for measuring performance are constrained by

departmental boundaries, which encourage unit managers to be
concerned only with their portion of a process that may span multiple
work groups or units within the institution. Allowing the budget process
to drive performance measures does not take into account the critical
outside perspectives of customers and stakeholders as well as the
dimensions of performance that are meaningful to them, such as time,

cost and quality of service. Finally, there is no opportunity to tie
individual performance objectives and performance evaluation
processes to institutional performance.
Having realized the shortcomings of traditional management control

system, Kaplan and Norton designed the BSC as a result of a one year
research project with 12 companies. Since its introduction, the
balanced scorecard has been awarded a prize by the American
Accounting Association as the ‘best theoretical contribution in 1997’
and its industry and academic attention placed it alongside such as
‘Activity based costing’ and ‘Total Quality Management’.
5.2 Balanced Scorecard – The Basic Philosophy

The basic philosophy of the balanced scorecard is that people will
focus on what you measure – more because it shows you care about it
than because of financial incentives. Most organization, when you look
at their actual behaviours rather than their words, focus on a few
financial measures, but that doesn’t help them to improve their results,
because if you tell your employees to increase shareholder value –
what should they do? But if you know what determines shareholder
value – high customer loyalty, high quality or low price products, new
products, etc. – then you have some ground to stand on, especially if
you can work back to the key issues managers and employees should
focus on.
5.3 Balanced Scorecard BSC - The idea in brief

Why do budgets often bear little direct relation to a company’s long-
term strategic objectives?
That’s because they don’t take enough into consideration. A balanced
scorecard augments traditional financial measures with benchmarks
for performance in three key non financial areas:

• a company’s relationship with its customers
• its key internal processes
• its learning and growth.
When performance measures for these areas are added to the financial
metrics, the
result is not only a broader perspective on the company’s health and
activities, it’s also a powerful organizing framework. It is a
sophisticated instrument panel for coordinating and fine-tuning a
company’s operations and businesses so that all activities are aligned
with its strategy.
5.4 The idea in practice

The balanced scorecard relies on four processes to bind short-term
activities to long term objectives:
5.4.1 Translating the vision.

By relying on measurement, the scorecard forces managers to
come to agreement on the metrics they will use to operationalize
their lofty visions.
Example:
A bank had articulated its strategy as providing “superior service
to targeted customers.”
But the process of choosing operational measures for the four
areas of the
scorecard made executives realize that they first needed to
reconcile divergent views of who the targeted customers were
and what constituted superior service.

5.4.2 Communicating and linking.
When a scorecard is disseminated up and down the
organizational chart, strategy becomes a tool available to
everyone. As the high-level scorecard cascades down to
individual business units, overarching strategic objectives and
measures are translated into objectives and measures
appropriate to each particular group. Tying these targets to
individual performance, and compensation systems yields
“personal scorecards.” Thus, individual employees understand
how their own productivity supports the overall strategy.
5.4.3 Business planning.

Most companies have separate procedures (and sometimes
units) for strategic planning and budgeting. The discipline of
creating a balanced scorecard, forces companies to integrate the
two functions, thereby ensuring that financial budgets do indeed
support strategic goals. After agreeing on performance measures
for the four scorecard perspectives, companies identify the most
influential “drivers” of the desired outcomes and then set
milestones for gauging the progress they make with these
drivers.
5.4.4 Feedback and learning.

By supplying a mechanism for strategic feedback and review, the
balanced scorecard helps an organization foster a kind of
learning often missing in companies: the ability to reflect on
inferences and adjust theories about cause-and-effect
relationships.
Feedback about products and services, new learning about key
internal processes, technological discoveries, etc., all this
information can be fed into the scorecard, enabling strategic

refinements to be made continually. Thus, at any point in the
implementation, managers can know whether the strategy is
working— and if not, why.
5.5 The Balanced Scorecard –Measures That Drive

Performance
(Source: Kaplan and Norton 1992, Harvard Business Review)
Think of the balanced scorecard as the dials and indicators in an

airplane cockpit. For the complex task of navigating and flying an
airplane, pilots need detailed information about many aspects of the
flight. They need information about fuel, air speed, altitude, bearing,
destination and other indicators that summarize the current and

predicted environment. Reliance on one instrument can be fatal.
Similarly, the complexity of managing an organization today requires
that managers be able to view performance in several areas
simultaneously.” (Kaplan and Norton, 1992).
5.6 Benefits of implementing BSC

Thus, the balanced scorecard does its magic by focusing the
organization on the issues which the leadership team decides are key
to its success. It does this more through the process of implementing
the scorecard than through the actual paper or numbers – so a human
solution is the key.
There are other benefits – stronger communication, (through the
cascading and measurement tracking processes), warning of strengths
and opportunities ahead (from watching key indicators), less
“information overload” (from focusing only on the most important
measures), and greater alignment (from agreement on key objectives),
to name a few. However, the point of a balanced scorecard is to:
• Align all members of an organization around common goals and
strategies
• Link initiatives to the strategy, making prioritization earlier
• Provide feedback to people of key issues – notably, areas where
they can have an impact
• Be an essential decision-making tool for everyone in the
organization
5.7 Creating the BSC model - How to implement?

The first part of the process is creating a model for the scorecard. First
review and clarify strategies; this often requires some facilitated
arguments and discussions, so that broad disagreements can be dealt
with.

At CBL this will require the formation of organizational objectives with
reference to the vision, strategies and the approved budget 2008
documents. The process should also incorporate long term strategies
with reference to our recent meeting with Kraft.
Ideally it will be an EXCO forum, who will also be responsible to
develop and align their vision and goals with the organizational
objectives. Participation of senior members will make the goals a
compass for business managers and a catalyst for organization-wide
intervention.
The next step is agreeing on what capabilities are needed within the
company to actually pursue the strategy. The above process may take
one or two full day meetings.
The final part of creating a model for the balanced scorecard is making
the actual model. At this meeting the leadership team must agree on
key goals and drivers, values, and their competitive situation. They
must build the map which will be used as the basis of the scorecard –
not the measures themselves, but what concepts will be measured.
Third, most important, they must gain personal involvement in an
ownership of the process.
Once this is done, one can move to the second step, which is designing
and selecting measures for the scorecard. This is where the process
and the paper come together.
One way to do this is to assign teams to come up with appropriate
measures.
The measurement teams normally present their conclusions to the
senior leaders, who then either use them or ask for changes or
clarification. The leadership team can then identify leading and lagging
indicators or measures.
As with any change constant communication are essential for success.
Employee surveys can be conducted to judge whether people

understand the process and are prepared for it; and how well the
scorecard is implemented in each area.
5.8 Cascading the scorecard

Once the balanced scorecard is installed at the top, where
commitment is most vital to success, it is then cascaded throughout
the organization, to focus department’s goals with the overall company
goals and finally linking it to personal goals in each department.
The senior leadership needs to act as a steering group over the life of
the effort, providing ongoing direction, prioritization, problem solving,
encouragement and motivation for staff to participate.
Incentives will also be needed to build in and different mechanisms of
doing so can be a separate document for consideration and approval
once we have a consensus on the implementation of balanced
scorecard.
5.9 Balanced Scorecard: The Process

Putting the Balanced Scorecard to Work

Example: CBL Vision and the Four Perspectives

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Performance Appraisal Report

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Performance Appraisal

Submitted to: Syed Jahangir Ali

Performance Appraisal Report on Continental Biscuits Page 2

Performance Appraisal Report on Continental Biscuits Page 3

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Company vision is continued expansion in the biscuits manufacturing

1.2 Company’s Mission

The purpose of this Mission is to guide and to inspire, rather than to

1.3 Company’s Strategy

1.3.1 Innovations as a part of Growth Strategy

CBL's corporate philosophy is innovation, of products, strategies and

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Wah: The unique sugar glazed biscuit in a bite size.

1.4 Company’s Management Team

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2 Human Resource at CBL

In the current economic context where jobs change quickly, job

Our commitment to diversity includes a range of initiatives that help

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3 About Human Resource Director

The Role of Human Resource in Continental Biscuits:

Continental Biscuits strategic Principals and a major goal are of profit

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LU basically depends over centralized recruitment system rather than

3.1 Recruitment Method at Continental Biscuits

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3.1.3 Internal Sources

3.1.4 Internal Job Posting

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3.1.5 External Sources

3.2 Selection Process at Continental Biscuits Limited

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This is the general practice which continental biscuits are using in

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4.1 Why do you need a Performance Management

Unfortunately, the concept of performance management means

What is missing is timely and continuous feedback about individual

4.2 What do you mean by Performance Management

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Performance appraisal is a necessary, but far from sufficient, part of

It is a holistic process bringing together activities that contribute to

4.3 What is wrong with your existing system?

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4.4 What objective does performance management

Performance management is about establishing a culture in which

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Key Benefits of Performance Management:

4.4.1 PM focuses on results rather than behaviours

4.4.2 Aligns organizational activities and processes to

4.4.3 Cultivates a system-wide, long-term view of the

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4.4.5 Other Benefits of Performance Management

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4.6 What does a Performance Management System

• A process for communicating employee performance

4.6.1 The process:

The broad process of performance management requires us to do

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4.6.2 Define Performance:

Goal setting has a proven track record of success in improving

Moreover, mere presence of goals is not sufficient. One must also be

In defining performance, the third requirement is assessment. This is

Therefore, to define performance properly, one must do three things