HR Balanced Scorecard at Verizon: Strategy & SWOT Analysis
This paper examines the implementation of the Balanced Scorecard framework within Verizon Communications' Human Resources function, drawing on the Harvard Business School case study by Epstein, Cott, and Datar. It explores how HR departments can move beyond being perceived as cost centers by adopting strategic measurement tools that align HR practices with broader business objectives. The paper outlines the origins of the Balanced Scorecard, developed by Kaplan and Norton in the early 1990s, and demonstrates how SWOT analysis supports its implementation. Key HR domains addressed include staffing, compensation, employee relations, performance management, and health and safety, illustrating how data-driven frameworks can close the gap between HR strategy and corporate strategy.
- Introduction: HR Strategy and Measurement: HR must measure value and align with business strategy
- The Balanced Scorecard Framework: Origins and purpose of Kaplan and Norton's scorecard
- SWOT Analysis as an HR Tool: SWOT prepares organizations for balanced scorecard implementation
- Applying SWOT to Key HR Functions: Strengths, weaknesses, and opportunities in staffing and safety
- HR Action Plan: Staffing and Compensation: Metrics and strategies for supervisor retention and pay equity
- Conclusion: Verizon as model for strategic HR measurement alignment
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What makes this paper effective
- Clearly connects a well-known management framework (the Balanced Scorecard) to a concrete corporate case study, grounding abstract concepts in a real organizational context.
- Uses SWOT analysis as a practical bridge between theoretical HR strategy and operational implementation, making the argument accessible and applied.
- Maintains a consistent focus on the central problem — the disconnect between HR strategy and business strategy — and returns to it throughout, giving the paper coherent argumentative flow.
Key academic technique demonstrated
The paper demonstrates applied case analysis: it uses a published Harvard Business School case to anchor its argument, then extends the discussion by layering in supplementary frameworks (SWOT, Balanced Scorecard theory) to show how strategic HR management can be operationalized. This technique of anchoring analysis in a named case while broadening the conceptual discussion is characteristic of undergraduate business writing.
Structure breakdown
The paper opens with an introduction that situates the problem of HR measurement within modern business demands. It then explains the Balanced Scorecard framework and its origins, followed by a section on SWOT analysis as a preparatory tool. The middle sections apply both frameworks to specific HR domains such as staffing, compensation, and employee relations. A brief action-plan discussion highlights two key HRM components. The conclusion recaps the argument and reaffirms Verizon's role as a leading example of strategic HR measurement.
Introduction: HR Strategy and Measurement
This report is a combination review of the article "Verizon Communications, Inc.: Implementing a Human Resources Balanced Scorecard" and a review of the Balanced Scorecard process itself. Companies today can only improve what they measure. When it comes to Human Resources (HR) performance management, how can organizations be sure they are measuring the right things — or communicating the right information to the right people? New tools now help companies address issues such as these, allowing them to align and support key processes and to translate strategy into operational objectives, measures, targets, and initiatives.
This report identifies and discusses the key issues and problems related to the cohesion between an organization's existing business strategy and its Human Resource Management (HRM) strategy and practices. This is accomplished by analyzing how and why organizations create business missions and strategies. There has been a significant shift in the assessment and alignment of business and HR strategies, and this report attempts to identify and resolve some of the key HRM issues that arise from this new alignment.
The article demonstrates how HR leaders are now continually placed under increased pressure to clarify and demonstrate — through the use of hard data — the value that their functions deliver to the business as a whole. In other words, soft functions such as Human Resources can no longer simply represent a bottomless pit of costs. This report details how HRM is implementing new strategic management frameworks such as the Balanced Scorecard to develop and embed the value of HR processes business-wide. The report also elaborates on two HRM component areas included in the strategic HRM action plan.
As the world becomes a smaller place through new technologies such as the Internet, businesses are requiring more from their HR departments. It is now essential for an organization's business and HR strategies to mesh effectively. Business leaders are also requiring HR management to quantify their departments' contributions and costs.
One way of achieving this statistical quantification is through the Balanced Scorecard process. HR must conduct audits that reveal existing performance compared to desired performance, thereby enabling the identification of initiatives or strategies that can close the gap. It is now critical for HR functions to clearly assess the return on investment of their programs and, by doing so, provide clear, demonstrable, and meaningful financial measures of their value to the company.
The Balanced Scorecard Framework
The Balanced Scorecard is a management system that also functions as a measurement system. It permits an organization to identify a clear vision and translate that vision into an action plan, while providing feedback about key internal business processes and their external outcomes. Through this process, organizations can continuously improve their overall strategic performance.
This new approach to the strategic management of non-financial processes was developed in the early 1990s by Harvard Business School professors Dr. Robert Kaplan and Dr. David Norton. The two professors recognized apparent weaknesses in existing management approaches and offered a framework to balance non-financial functions. Human Resources is an excellent example of a critical function that, in the past, was simply considered a cost center at companies like GTE. The HR function rarely, if ever, was required to provide strategies consistent with the overall business strategy.
The inherent problem, therefore, was that there was no way of measuring whether the HR function was successful in the eyes of financially driven corporate management teams. Today, because of processes such as the Balanced Scorecard, companies can address key issues that were once caused by a lack of alignment between business strategy and HRM strategy.
SWOT Analysis as an HR Tool
To implement the Balanced Scorecard, it is essential for an organization to first evaluate its current business processes and existing primary and secondary strategies. This can be accomplished through a SWOT Analysis. SWOT Analysis is an effective methodology for identifying a company's strengths and weaknesses as well as the opportunities and threats it faces. The SWOT process helps management focus on areas where the company is strong and pinpoint opportunities for future success. SWOT stands for:
Strengths Weaknesses Opportunities Threats
SWOT works by prompting companies to address questions such as: What do we do well? What could we improve upon? What trends or opportunities are presenting themselves in our industry or in the broader world? What obstacles will we face in the near future? SWOT is an environmental analysis tool that helps identify a company's value proposition, new or existing business objectives, departmental strategies, and opportunities to align differing business strategies throughout the organization.
By using a Balanced Scorecard approach in conjunction with SWOT, an organization can create a strategic HR action plan to resolve key issues such as staffing, compensation, employee relations, and health and safety. The approach begins with a SWOT analysis of the following HR areas:
HR Planning & Staffing | Training & Development | Compensation | Work Systems / Job Design | Employee Relations | Performance Management | Health & Safety
Conclusion
This report was a combination review of the article "Verizon Communications, Inc.: Implementing a Human Resources Balanced Scorecard" and a review of how the Balanced Scorecard concept works and can be applied in today's highly competitive global economy. Verizon is the largest provider of wireline and wireless communications in the United States and is a recognized proponent of the HR Balanced Scorecard methodology. Top Verizon executives have described the approach as a compelling and strategically critical business imperative.
This report identified and discussed key issues and problems related to combining an organization's existing business strategies with its newer HRM strategies and practices. This was done by analyzing how and why organizations create business mission and strategy ideals. Because of the ongoing shift in the assessment and alignment of business and HR strategies, this report also attempted to identify and resolve key HRM issues in relation to that newer alignment. In short, the HR function is being compelled to become more of a strategic partner for the business — and that is being accomplished through the use of balanced performance measurement frameworks such as the Balanced Scorecard and SWOT analysis.
Works Cited
Epstein, Marc J., Jeremy Cott, and Srikant M. Datar. "Verizon Communications, Inc.: Implementing a Human Resources Balanced Scorecard." Harvard Business School Review, 2001.
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