The balanced scorecard as performance measurement and personal development tool in a steel organisation / André van Staden.

The Balanced Scorecard (BSC) is a strategic management tool that provides the manager with a clear and concise picture of the business's health and progress in reaching the goals of the business (Norton & Kaplan, 1992: 71-79). The BSC is a set of financial and non-financial measures relating to a company's critical success factors. Of late the BSC was also used as a personal development tool – measuring the individual's performance towards set personal growth targets. The BSC process has been part of ArcelorMittal, Vanderbijlpark Works for many years. This process can add great value to a company if managed effectively- the question is thus: is the BSC effectively implemented in ArcelorMittal, Vanderbijlpark Works? It was decided to conduct a study to determine the status of the BSC with one main objective and two secondary objectives, namely to –• establish whether ArcelorMittal, Vanderbijlpark Works is effectively using theBSC tool as a performance measurement and a personal development tool (main objective);• determine if there is a difference between the effective implementation of theBSC as a performance management and personal development tool within the different business units within ArcelorMittal, Vanderbijlpark Works. These units areIron Making, Steel Making, Rolling, Engineering and Staff (Secondary objective 1): and• determine if there is a difference between the effective implementation of theBSC as a performance management and personal development tool between different role gradings (these roles are defined as E, F and G roles) in ArcelorMittal, Vanderbijlpark Works (Secondary objective 2). An empirical study was conducted in ArcelorMittal, Vanderbijlpark Works. A questionnaire was used as the measuring instrument and was issued via the HR Department to a target group of 724 employees. The questionnaires consisted of 25 questions divided into 2 sections to test both the effectiveness of the BSC as a performance management tool and a personal development tool. To analyse the data, descriptive statistics and frequency distributions were used and calculated in Microsoft PHStat. From these results the following conclusions were drawn.• The BSC process is well entrenched in ArcelorMittal, Vanderbijlpark Works, but lacks overall effectiveness;• The BSC does encourage people to self-develop, but development plans are lacking, not enough time for training is given and managers must show a real intent to develop their people. From the study and the conclusions drawn, the following recommendations were made.• Address the issue of mistrust between the employees and their supervisory management.• Managers should make allowance for individuals to make mistakes.• Encourage innovation in the organisation.• More effort should be applied to translate the company strategic objectives into workable (and measurable) KPI 's at the lower levels of the organisation.• ArcelorMittal should make a concerned effort to allow more time for training and self-development during normal working hours.• Revisit all KPI's for weight allocation. All the departments and all the levels in theorganisation see this as a drawback of the BSC system.• Test the applicability of the KPis. Ensure that the KPis on the BSC are clear and that these reflect the effort the company requires form the individual.• Allow more participation of the individual during the compilation of the BSC (this will improve buy-in).• The E-role level communicates very well downwards to the lower levels in the organisation. Take key learning aspects from this group, and skill the F-role andG-role levels to the same extent.