Compare and Contrast Between the Balanced Scorecard and Vertical Alignment Chart

Was an assignment to pass a course on Strategic Alignment of HR to Organizational Strategy

1. Compare and contrast the balanced scorecard and the vertical alignment chart.

While both are tools used widely by human resource management professionals to align HR strategy to the organizational strategy, the Balanced Scorecard tool focuses more on a holistic general diagnosis which serves HR professionals to see where they stand in terms of people, processes, customer and finance. While the Vertical-Alignment Chart tool strives to show evidence of how those stances sought out by a BSC have direct effect on organizational performance by making the links visual to top management executives, attributing which lever in organization is making that cause and the results predicted if changes have been made.

The Balanced Scorecard is a diagnostic tool used to measure organizational performance from an extrinsic (customer & financial performance) and intrinsic (people & processes) perspective. It answers critical questions to bring evidence of the changes HR needs to make. All-in-all the BSC draws for the HR professionals the "big picture" when these same HR professionals are submerged into finding solutions and fixing the day-to-day tasks, challenges, and crisis.

On the other side, I see the Vertical Alignment Chart as a diagnostic and HR lever analysis tool used by HR professionals to define critical organizational indicator objectives, where it identifies the connection they have with regards to organizational performance, and put out recommendations with regard to each lever. While (in my opinion) the BSC tends to view each critical indicator by itself as one pillar in relevance to its impact on the organizations performance, the VAC seems to have more of a linking feature, where numerous links are made apparent between the HR levels, and critical indicators within themselves. The VAC analyzes them under a single strategy with a decided-upon-earlier focus for execution. The vertical structure in my opinion is effective also because it does the analysis in a top-to-bottom approach, starting from the decision maker's strategies and their focus to the front-line managers, workers, and laborers.

a. What are the strengths of each?

BSC's main contribution to organizational performance evaluation was its introduction of 3 (customer, process, people) other main critical indicators for the organization to evaluate on top of financial evaluation (old managerial practice), which probably gave birth to an improved analysis in my opinion to the Vertical Alignment Chart. The second strength I see in the BSC tool is its measurement of the organizations performance from a balanced perspective, analyzing each indicator to figure out where the gap lies. In addition is a great tracking tool to track how well you are doing with regards to strategy execution (given that you do have a well-defined strategy - direction in your organization). The BSC's focus on customers and its people is a great performance drive for the organization, where I believe that these two critical indicators attribute to where the organization is heading and if it is successful or not.

On the other hand the strengths that I see in VAC's tool is that it takes the holistic view of a BSC and analyzes each critical indicator forming links between each and all indicators. Secondly the VAC is aligned greatly with the executive teams' strategy which gains the HR team a buy-in right from the start of the process. Thirdly, the VAC tool has utmost utilization of the cause-and-effect feature which seemingly is more analytical and convincing to executives.

By linking the Value-Creation Chart and VAC, HR's contribution and creditability becomes more