ITC HOTELS LTD.

BALANCED
SCORECARD – CASE STUDY

Abhinav Dandona 10PGHR02

Amandeep Kaur 10PGHR05
Sravya Arekatla 10PGHR09
Chhavi Aggarwal 10PGH12
Kunal Kashyap 10PGHR22
Prakhar Ranjan 10PGHR35
Introduction - Innovation
Different kinds of innovation in organization:
Product Innovation
Product Technology Innovation
Production Processes
Work Organization and HRM Practices
Patterns of Innovation:
Products and Technological Systems
Job Design, Work Organization and HRM Practices
Resource based view – organizational innovation rests with
organizing principles and interpersonal relationships
Strategic HRM – HR strategies and promoting ba creative
environment
HR Innovation
 Innovative Approaches to measure performance:

Balanced Score Card Approach

Human Capital Appraisal
People Capability Maturity Model

 Innovative HR practices for business strategy

Talent Management
Change attitudes and mindsets of employees
Alignment of Business Strategy to HR Strategy

 Key HR Roles:
Partnership
Change Facilitator
Enabler
Strategic
Innovator
Monitoring
 Research Design Adopted
 Single Case Embedded research design at ITC Maurya Sheraton and
Towers in NCR , India

 Interaction with 45 stakeholders

 Insights from V.P. HR

 Secondary Sources of data like power point presentations used during

communication stage of the intervention

 Conducted cultural analysis based on open ended interviews with 20

employees
 ITC Hotels Ltd. – An Introduction
 Rebranding initiated by ITC Hotels Ltd. (ITCHL) - consisting of more
than 50 hotels spread over more than 40 odd destinations across the
country

 Objective – most effectively match service and budgetary needs of all

business and leisure travelers.

 ITC Maurya Sheraton – super deluxe category pioneer of Indian hotel

industry – 27 year old, 1300 employees in NCR

 The four distinct brands emerging out of the rebranding were:

1. ITC Hotels
2. Welcom Hotels
3. Fortune Hotels & Resorts
4. Welcom Heritage
Old Performance Management System
Grade structure covering managerial, executive and non managerial cadre
Structured system of salary and remuneration linked to grades and
performances which in turn were based on performance
Almost the entire remuneration package was fixed with very little variable
component
Only variable component- increases through annual increments or
promotions

No provision for automatic reduction due to bad performance

Egalitarian nature of compensation - marginal difference in earnings between
excellent and average performers

Focus on take home earnings rather than long term accruals – person does not
enjoy one year’s good performance for a lifetime
 Phase 1 – Planning the Measurement Architecture
The Balanced Scorecard
 Prepared in conjunction with department heads to build consensus around
strategic objectives – objective and subjective terms
 Prepared on five parameters:
 Customer Perspective
 Financial Perspective
 Internal perspective
 Employees Perspective
 Social Perspective
 BSC was strategically oriented
 Conclusion:
 Output to be measured
 Separate balanced scorecard for every function
 Cascading Scorecard Approach- linked employees to organizational
objectives
 Lacuna: Highly objective, Subjective criterion missing
 Role of HR : Change Agent and Enabler
 Phase – II : The Design Issues
Equilibrium between input and output was stressed.
To bring in subjectivity, Career Review Forms were
introduced – developmental career enhancement, talent
management
 70% objectivity through BSC
 30% subjectivity through CRF

Role of HR:
 Employee Champion
 Monitoring Role
 Enabler
 Phase III : Implementation and Review
 BSC circulated to all units - Introduced in 2001, first appraisal done in 2002
 Details of BSC communicated first to HR heads and then Department heads
 Responsibility of HR heads to convince Department heads
 Phase III : Implementation and Review
 Circulation of BSC and suggestions invited
 HR Facilitations and presentations
 Role of HR:
 Administrative Expert Role/ Monitoring Role
 Communicating details
 Convincing head of Departments
 Strategic partner and Change Agent
 Innovator and Strategist
 Extremely successful-Objective and Subjective based approach
 Bottom-Ups approach followed
 Highly performance driven culture: Pay of employee directly linked to
individual rating, unit performance and hotel performance
 Customized BSC
 All five perspectives are measured and different weightage is allowed to them
according to job. This is fixed as standard score. Personal scores are
calculated based on measures taken in following fields:
 Customer Perspective: Bring customer perspectives into account through
Welcome Index, Customer satisfaction ratio, daily complaint records by
engineers etc. On this basis, are allotted and they are compared with previous
years points.
 Internal Process: Measured by welcome reviews through various
environment, health, safety audits, preventive measures to avoid breakdowns
etc.
 Financial Perspective: includes measurement on various issues such as
efficiency in utilization of assets, inventory maintenance etc.
 Employee Perspective: Measured on basis of Percentage turnover of staff,
learning and growth, various training and development programmes
attended etc.
 Societal Perspective: Very unique aspect as it judges person’s contribution
towards welfare of society. Measured in terms of seminars, camps, awareness
programmes attended or conducted.
Career Review Form
 Assesses the subjective aspect of measuring performance
 Objective:
 Sum up the Big Five key competencies and feedback
 Assessing potential for future growth
 Objective:
 Encapsulate Big Five Theory
 Key Competencies
 Career Enhancement Form- Feedback to senior managers
 Confidential Section - Assessing potential for future
 Big Five : Role of HR
 Considering Employee’s point of view
 Culture which Supports Innovation
 CEF : Role of HR
 Employee champion
 Enabler
 Facilitator
Career Review Form( Contd.)
 Section A: filled by assessee
Deals with the Big Five, details of the employee performance and a
framework for appraisal

 Section B: Filled by Appraise

Lists all the components that are essential for a manager

 Section C: Jointly by appraisee and appraiser

Aim: exploring the core competencies possessed and required for
performing the job
Effectiveness in Innovation
 Two interventions should go together:

 BSC deals with hard HRM:

 Internal processes
 Cost
 Output

 Soft issues: Career Review form deals with Soft issues:

 Developmental Issues
 Competency profiling
 Interpersonal relations
 Employee feedback
 Welfare Activities
Climate Survey – A cultural
analysis
Creation of appropriate organizational climate crucial for innovation -
Cultural Analysis:

 People Oriented Culture

 Role Culture

 Defensive Culture

 Evolving Cultures
People Oriented Culture
 Focus on developing, taki9ng care of people at every stage

 Trade Union is very strong: thus, management has to ensure policies

are people centric

 Organizes activities and provides welfare amenities

 Departments design own Feedback forms

 Open Culture: employees free to come up with own views

Role Culture
 Seniority over merit concept

 Hierarchy is prevalent: Senior people have more say in various matters

 People encouraged to start their own processes to avoid problems

 Certain degree of Authoritarianism

 Bosses sensitive to personal needs of people, supportive of personal

problems

 Cross trainings , cross functional workshops

 Town halls etc. to encourage employee participation

 Defensive Culture
 Conservative and Rigid Trade Union : Resistant to change
 Union slowly adapting to changes – respondents opinion
 Negotiation Approach: moving from collective negotiation to one on one
basis

Evolving Culture
 Maurya Sheraton values traditional culture
 Culture of lifelong employment
 Experimentation given due importance by top management
 Welcome Creativity Index: Encourage employees to come up with
innovative ideas
 Performance Appraisal: Separate section to mark people on creativity
Positive and Negative
Implications
 Positive Implications:
 select right people with right attitude – need based assessment
 Ensures loyalty and reduces attrition rate
 Appropriate work environment

 Negative Implications:
 Favoritism towards senior employees may de-motivate newer
employees
 Rigid union to be convinced about implementing changes in
organization
Institutionalizing changing HR
Role
 Addressing the issue of Talent Management
 Encouraging performance through Value Index
 No employee expectations
 Automating the balance scorecard to save time