Verizon Communications, Inc.: Implementing a Human Resources Balanced Scorecard

2217 Words Oct 9th, 2006 9 Pages
This study discusses the four "Perspectives" specified in Kaplan's and Norton's Balanced Scorecard framework, focusing on their implementation at GTE4). Subsequently the efficiency of Garret Walker's and Randall MacDonald's internal communication strategy is evaluated and in the final chapter a summarizing conclusion is provided.
In 1996, J. Randall MacDonald, Executive Vice President of Human Resources at the GTE Corporation was facing the challenge to create an HR strategy supporting GTE's workforce through a major business transformation. Moreover Charles R. Lee, GTE's CEO wanted to know what the company was actually getting back for the money spent on various HR related activities.
The main problems for GTE
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In case there would have been a strong and negative correlation between these two measures, HR could have used this insight as a leverage to broaden the workplace improvement activity and could have proved to the CEO, what he was actually getting back for the money spent for this HR initiative.
The Financial Perspective
Regardless of conflicting views at GTE HR about whether a direct relationship between the performance of non-financial measures and financial outcomes could be established, Garret Walker and Randall Mac Donald thought that Balanced Scorecard would ultimately provide a reasonably close link to GTE's profitability.
Reducing employee turnover
In 1998, HR started an initiative to reduce the high employee turnover rate in the company's call centers. A subsequent calculation provided by HR demonstrated that the reduction of employee turnover by one percent saved the company $23.60 million. The costs for hiring and training were used as a base for this calculation. Mainly through exit interviews, a lagging indicator, HR found out that the number one factor for employees to leave the company was work environment related. As a response, the size of the cubicles that people worked in was increased and some of the computers were upgraded. Surprisingly, the cost savings calculated by HR did not consider the

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