Verizon Communications Case Study
To write this paper, I looked at the case study “Verizon Communications, Inc: Implementing a Human Resources Balanced Scorecard.” In order to analyze the measures taken to solve the case, it is necessary first to become familiar with the problem itself. In 1996, the American legislators adopted an unprecedented law, the Telecommunications Act, which aimed to end the monopoly and create a competitive situation in the communications market (Datar & Epstein, 2001). The result of this law was the explosive growth of broadband, as well as more than a dozen significant scandals and lawsuits, some of which are still pending. The Telecommunications Act of 1996 did something like cross-pollination. Under the Act, local phone companies, the traditional local Baby Bells, were allowed to enter the long-distance market, and long-distance carriers, such as AT&T, were allowed to offer local phone service. But the price for doing so was to create opportunities for competition in their own home fiefdom. Telephone operators were allowed to deliver new services and expand beyond their traditional market and geographic segments as long as they simultaneously opened up business opportunities and their networks to competitors.
At this time, the quality of service in the communications market began to decline. Verizon Communications was not spared this downturn, as it had problems assessing the performance of its Human Resources department. The fact is that the company’s departments were previously only subject to quantitative performance evaluations, such as evaluating the number of training sessions conducted for employees. At the same time, qualitative information about the results of training and employee development remained unknown. Thus, it was impossible to measure qualitative indicators, and investors were concerned about what their investments were going for. In addition, the company also suffered from the low qualifications of its hiring staff. But because the only indicator of the quality of the Human Resources department was the number of recruits, the deterioration of the situation was in no way reflected in the statistics. Underlying problems, in this case, could be seen as a lack of talent flow, problems in leadership and communication between departments, and problems in customer service and support. In addition, they could also include a lack of organizational integration and problems measuring the performance of the Human Resources department.
The company’s primary goal was to offer a complete set of high-quality communication services profitably. However, without solving the main HR problems, achieving this goal proved impossible. To solve this problem, the company decided to take unconventional measures and implement a new assessment form called the Balanced Scorecard (Becker et al., 2001). A dedicated team of four people called Planning, Measurement, and Analysis (PMA) was created to properly develop and implement this data collection and performance measurement system. The group set itself five primary strategic goals in the areas of talent, leadership, customer service, organizational integration, and HR capability. These goals included, among other things, investing in employee development, establishing a system for evaluating high-potential employees, and improving information sharing among business units. As this group worked to develop and implement the new evaluation system, it became clear that some additional factors could create challenges. For example, since qualitative data still had to be translated into quantitative data to build statistics and reporting, the indexing of results. To address this problem, the PMA team undertook two solutions.
First, they set a target value for each measurable parameter, allowing for comparison and performance evaluation. Second, most of the metrics were given the exact weighting, which changed over time to reflect the company’s priorities better. The second problem was the communication of assessment results to employees and department heads. This point was a key one in the whole system because further actions of the employees depended upon it directly. In order to communicate the results in a qualitative way, the PMA group introduced special markers for indicators, green for exceeding expectations, yellow for acceptable, and red for unacceptable. In this way, employees could more easily navigate their own performance and the department as a whole.
For the same purpose, additional training material was produced to help employees understand how to use the new system. The Balanced Scorecard developers also underwent a process of constant additions and reductions to the list of evaluation parameters. All of these metrics were changing in relation to the company’s evolving strategic goals and priorities. Another key factor in developing an evaluation program that I would like to talk about is employee reaction. After all, during the implementation of any program, you have to pay attention to it in the first place. The effectiveness of the company directly depends on how well the employees will accept the innovation.
Regarding the Balanced Scorecard, employees’ opinions were divided. Some were in favor of the new system, while some were afraid of its introduction. This is explained by the fact that certain employees were worried about losing control over the situation in general and their responsibilities in particular if they will be evaluated in a new way. However, the Director of Human Resources himself, whose opinion carried the most weight, was in favor of the new system. If I were an invited expert in a company, I would support the introduction of the Balanced Scorecard, but with some amendments. First of all, I am concerned about the dissent of some employees from the introduction of the new system, and I would set up some practice sessions for them. These would be adaptation training, not education exercises, where employees could discuss all their concerns. This is necessary to increase staff loyalty and trust in the new system and, therefore, ensure fair dealing with it.
Second, I would introduce a self-assessment procedure as part of the Balanced Scorecard. Self-evaluation is the process by which people measure their performance, skills, abilities, and other qualities. Self-assessment in the workplace is a vital part of evaluation for both employees and superiors (Mello, 2018). Through this procedure, employees can look at their performance objectively and determine their own shortcomings and strengths. Such personal evaluations enable a professional to determine the quality of their work, the level of pay they deserve, the training they need, and how effective they are against the general backdrop. Even if he inflates the final scores to please his superiors, he will still note for himself some shortcomings that can be corrected. For the bosses, however, this procedure is useful. They can see the employee’s attitude toward his work and develop the most appropriate recommendations through it. Therefore, I would not change the accepted system; I would make a few amendments to it that would make it function even more effectively.
References
Becker, B., et al. (2001). The Balanced Scorecard: Linking people, strategy, and performance. Harvard Business School Press.
Datar, S., & Epstein, M. J. (2001). Verizon Communications, Inc: Implementing a Human Resources Balanced Scorecard. Harvard Business School Press.
Mello, J. A. (2018). Strategic human resource management (5th Ed.). Cengage Learning.