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RESEARCHBalanced Scorecard - The Learning & Growth PerspectiveP. Lakshmi Narayanamma* & Dr. K. Lalitha**ABSTRACTBalanced Scorecard allows management to measure financial and customer results, operations, andorganization potential. The term “scorecard” signifies quantified performance measures and “balanced”signifies the system is balanced between short-term and long term objectives, financial and non-financialmeasures, lagging and leading indicators, internal and external performance perspectives. Simplisticallythree words. Passion, Performance and People. Learning and Growth is the area probably leastmeasured by most companies and yet it holds the key to future sustainable success. Combined togetherthey very much form the Evolution Engine that will take any organization well beyond anything it hasachieved previously. Learning & Growth must focus on measurable outcomes to move the companyforward. Learning & Growth of employees is the foundation for innovation & creativity. Organizationmust create a culture that encourages employees to participate and provide resources needed to do theirjobs. In order to balance the scorecard learning and growth perspective play a key role. This paper talksabout role of learning & growth perspective towards balanced scorecard and proposed model whichexplains the relationship among the perspectives of scorecard.KEYWORDS: Balanced Scorecard, Culture, Learning & Growth, PerformanceIntroduction:Balanced Scorecard into today's integratedand aligned management system.About Balanced ScorecardThe balanced scorecard is a concept thathas become deeply embedded inorganizations of all kinds around the world and yet, remarkably, it has only existed forfifteen years. The paper introduced the ideaof focusing on human issues as well asfinancial ones, and measuring performanceacross a much wider spectrum thanbusinesses had done before.Balanced Scorecard has been launchedtwenty years ago as a first set of principlesfor balanced strategic Objectives andMeasures/KPIs setting and measurement.The “parents” of Balanced Scorecard are Dr.Robert S. Kaplan, Baker FoundationProfessor at Harvard Business School andDr. David P. Norton, the founder of theconsulting team that contributed over thepast two decades to the development ofBy the mid-1990s other organizational*Mrs. P. Lakshmi Narayanamma, Research Scholar, Krishna University, MachilipatnamEmail: lakshmipathi.mba@gmail.com**Dr. K. Lalitha, Professor, Guntur Engineering CollegeEmail: lalitha.kadapa@gmail.comA Peer Reviewed Research Journal59aWEshkar Vol. XXI Issue 2 September 2016 WeSchool

Balanced Scorecard - The Learning & Growth PerspectiveElectric on performance measurementreporting in the 1950's and the work ofFrench process engineers (who created theTableau de Bord – literally, a "dashboard"of performance measures) in the early partof the 20th century.theorists had taken up Kaplan and Norton'swork and modified the design method ofbalanced scorecards, ironing out early flaws.The idea of three generations of balancedscorecards was built on in Cobbold andLawrie's work of 2002, which described howthe balanced scorecard - or BSC, as it isoften referred to - can support three distinctmanagement activities and has evolved intothe use of strategy maps as a strategicmanagement tool. It has given a balancedview about the performance metrics.Starting from the day of its birth much ofthe research went on Balanced Scorecard.But, the research is of conceptual in nature.Recently many companies started designingtheir own scorecard with differentperspectives. BSC implementation is anoverall approach where collective effort isrequired from all levels of the organization.It requires in-depth analysis, planning &commitment from people.BSC has evolved from its early use as asimple performance measurementframework to a full strategic planning andmanagement system. The “new” balancedscorecard transforms an organization'sstrategic plan from an attractive but passivedocument into the "marching orders" forthe organization on a daily basis. It providesa framework that not only providesperformance measurements, but helpsplanners identify what should be done andmeasured. It enables executives to trulyexecute their strategies.This new approach to strategicmanagement was first detailed in a series ofarticles and books by Drs. Kaplan andNorton. Recognizing some of theweaknesses and vagueness of previousmanagement approaches, the balancedscorecard approach provides a clearprescription as to what companies shouldmeasure in order to 'balance' the financialperspective. The balanced scorecard is amanagement system (not only ameasurement system) that enablesorganizations to clarify their vision andstrategy and translate them into action. Itprovides feedback around both the internalbusiness processes and external outcomes inorder to continuously improve strategicperformance and results. When fullydeployed, the balanced scorecard transformsstrategic planning from an academicexercise into the nerve center of anenterprise.Balanced Scorecard is a strategic planningand management system that is usedextensively in business and industry,government, and nonprofit organizationsworldwide to align business activities to thevision and strategy of the organization,improve internal and externalcommunications, and monitor organizationperformance against strategic goals. It wasoriginated by Drs. Robert Kaplan (HarvardBusiness School) and David Norton as aperformance measurement framework thatadded strategic non-financial performancemeasures to traditional financial metrics togive managers and executives a more'balanced' view of organizationalperformance. While the phrase balancedscorecard was coined in the early 1990s, theroots of the this type of approach are deep,and include the pioneering work of GeneralA Peer Reviewed Research Journal60aWEshkar Vol. XXI Issue 2 September 2016 WeSchool

Balanced Scorecard - The Learning & Growth PerspectivePrevious Targets“To achieve ourvision, how willwe sustain ourability to changeand improve?”“To satisfy ourshareholdersand customers,what businessprocesses mustwe excel at?InitiativesObjectivesLearning andGrowthhuman into tangible commercial assets,then author said that the learning-andgrowth dimension of strategy has so far onlybeen scratched on the surface, that is,statistically. The tip of the invertedpyramid suggested by the balancedscorecard framework, which centrallycomprises, at its tip, the intangible assets ofpersonnel mental growth over the life span,has so far not been thoroughly eitherassessed or consciously activated bymanagement. As a result, companies'knowledge about their intangible mentalgrowth assets is shallow, and their controlover intangible human resources iscorrespondingly weak. But “intangible” is a[1] Authors coated that the traditionalistenablers of learning and growth in thebalanced scorecard framework (BSC) areinsufficient for “driving down” strategy sothat the authors introduced into BSC anadditional tier of “meta-enablers” forlearning and growth. Meta-enablers aremental-growth competencies that groundand enable the traditionalist enablers, suchas employee satisfaction, productivity, andretention (staff competency, use of strategictechnology, climate for action). Ifeconomic value creation is the translation,through focused strategy, of intangibleA Peer Reviewed Research JournalInternal nitiatives“To achieve ourvision, how shouldwe appear toour customers?”ObjectivesCustomerMeasures“To succeedfinancially, howshould weappear to easuressuccess. These financial measures areinadequate, however, for guiding andevaluating the journey that information agecompanies must make to create future valuethrough investment in customers, suppliers,employees, processes, technology, andinnovation."Kaplan and Norton describe the innovationof the balanced scorecard as follows:"Balanced Scorecard retains traditionalfinancial measures. But financial measurestell the story of past events, an adequatestory for industrial age companies for whichinvestments in long-term capabilities andcustomer relationships were not critical for61aWEshkar Vol. XXI Issue 2 September 2016 WeSchool

Balanced Scorecard - The Learning & Growth Perspectiveknowledge management. The author camewith a new view to BSC and shown thefifth perspective of BSC - the technologicalperspective, which is included inperspective of learning and growth andessentially provides the infrastructure toachieve the objectives of other perspectivesof BSC and corresponds with theknowledge management technologieswithin the enterprise.relative term. Its meaning depends on howmuch of what is invisible can be madevisible. Through Corporate DevelopmentReadiness and Effectiveness Measure(CDREM) intangible mental-growth assetsare made visible, and then tangible, asnever before.[2] Organizations have realized thatlearning is more than training. They havebroadened their understanding of learningto include the development of corporateculture, the strength of knowledgemanagement, the importance of focusingtraining funds and the inherent value ofinformal networks. Most of all they havelearned to align learning initiatives tobusiness objectives and make profoundchanges to those that do not fit.[3] Learning & Growth Perspective focuseson the intangible assets of an organization,mainly on the internal skills andcapabilities of the employees that arerequired to support the value-creatinginternal processes. The Learning & GrowthPerspective focuses on Human, Information& Organization Capital. The Learning andGrowth objectives describe how the people,technology, and organizational climatecombine to support strategy. Measures inthis perspective are lead indicators forimprovements in the internal processes,customer and financial perspectives.[5] The most important perspective insidethe BSC is learning and growth perspectivethat have significant relationship with thedevelopment of human capital in theorganization. This paper attempts tofacilitate communication andunderstanding of business goals andstrategies at all levels in the organization.Rather than that, organization attempt todevelop skills through education andtraining, motivated employees, provideaccess to strategic information, alignindividuals and teams to business unitobjectives. By using balanced measures atthe organizational level, and by sharing theresults with supervisors, teams, andemployees, managers are providing theinformation needed to align employeeperformance plans with organizationalgoals. At the same time, by balancing themeasures used in employee performanceplans, the performance picture becomescomplete.[4] Eva Rakovska (2011) stated that manychanges of business environment comefrom changes of management. New aspectsof business performance are associated withnew concepts of measurement. The BSCconcept is a good platform for building newframe for measure the business performancealso in knowledge economy, because here isa similar approach for implementing[6] Capelli and Crocker-Heffter haveresearched on the correlation betweenhuman resources practices and the strategythe company adopts, reaching down “to thespecific practices, and their effectiveness forthe development of the organization indefined strategies”. Starting from thisauthor, this paper reviews the BSC as a toolfor aligning human capital with businessA Peer Reviewed Research Journal62aWEshkar Vol. XXI Issue 2 September 2016 WeSchool