Effective Use of KPIs in Business Social Responsibility

Market Mechanics have always been a major factor for organizational downfalls. As a result, there has been a consistent quest on the part of market players to discover something that would help them in tackling this situation.

Escalating the extent of 'social responsibility' is often admitted by the top-level management of organizations to be of great help in this direction. Implementation of Business Social Responsibility (BSR) has routinely led to fruitful results and use of KPIs can go a long way in guaranteeing the chance of success. So, KPIs when structured on a Balanced Scorecard is what can give an ever-lasting answer to the troubles posed by the dynamicity of external and internal conditions that BSR initiatives experience.

Some of the perspectives which when obtained can assist in performance gauging for Business Social Responsibility are Employee perspective, Environmental Perspective, Social Policies followed and Management perspective. Employee perspective is necessary to provide them a good enough environment and make them perform to the maximum extent. Health and Safety and Diversity Supportive ratio can prove useful in this sense. Contribution to Environmental conditions can be done by monitoring the degree of recycling, total amount of waste produced etc. Social Policies can be measured with indicators like Social Contribution in monetary terms, number of strategic partners etc. Lastly, efforts on part of Management can be had from number of Board meetings held, recognition achieved etc.

The idea of corporations following a benevolent attitude towards society does not go well with a group of analysts. The group opines that this concept distracts the organization from the basic motive of its existence, it being 'maximize profits'. Therefore, attempts to convince the organization's management to divert financial resources in this direction are often met with much resistance. Yet another roadblock encountered is regarding the recording of KPIs. This task requires being immensely meticulous in deciding what should be followed and what has to be discarded. Moreover, there can be considerable number of groups to which the organization owes its responsibilities. Consequently, taking care of all these classes at the same point is yet another hurdle.

KPIs help in enabling the organizations successfully extend their role to something more than 'profit extracting entities'. The social credo they earn owing to such activities, if carried out with transparency assures them of long-term benefits. Organizations can discharge their duties towards various groups they are accountable to, by using appropriate indicators. Besides the physical 'environment' with regard to which the KPIs are framed, organizations pay heed to sections like employees, ethnic minorities and women. Once the process of 'Business Social Responsibility' is quantified in the form of measures, progress can be easily made and measured. Gradually, with time the business house can see this as a powerful tool to not only survive but also flourish in the competitive situations.

'Measuring performance' is no less important than 'performing'. Organizational management needs to make sure that proceedings are being quantified in suitable and understandable manner. Yet another word of caution is the change that should be reflected in the Balanced Scorecard. This is possible with a continuous check on what's in and what's out in the current context and it holds true for BSR initiatives too. All this would enable it to 'keep performing' and avert the 'stagnant position' in terms of performance.