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GROUP ASSIGNMENT
TITLE:
BALANCE SCORECARD IN TM (TELEKOM MALAYSIA BERHAD)
PERFORMANCE MEASUREMENT
VS.
PERFORMANCE MANAGEMENT
SHAMSIAH NOOR BINTI SAMSURI (ZP03414)

NUR AMIZA ZULAIKA ZAIDAN (ZP03336)
MAZNI BINTI MOHD SAID (ZP03463)
GROUP MEMBERS
DIANA SURAYA BINTI MAWARDI (ZP03332)
NORAISHAH BINTI RAMLAN (ZP03467)
SYED NAZRIN SYED YUSOF (ZP03479)
SUBJECT MANAGERIAL ACCOUNTING
SUBJECT CODE ZCMA6022
LECTURER DR ROZITA BINTI AMIRUDDIN

Managerial Accounting | ZCMA6022 2
TABLE OF CONTENT PAGE

1 Overview of TM Berhad 3
1.1 Vision and Mission 4
2 Reporting Evaluation Structure 4

2.1 Performance Management 7
2.1.1 Performance System 8
1. 2.2 Performance Measurement 10
2.
3 Balanced Score Card Applied In TM 11
3.1 Overview
11
3.2 (5) Five Principles of Strategy Focused Organization. 13

3.3 Perspectives 15
4 Findings 23
5 Conclusion 27
6 References 28
1. OVERVIEW OF TM BERHAD
Telekom Malaysia Berhad (TM) is the largest integrated communications solutions

provider in Malaysia. TM also is one of Asia’s leading communications companies with
market capitalization of RM11 billion and employee force of 28,047 people (TM annual
report 2014). TM is the major player in the Malaysian telecommunication industry,
providing telecommunication and related services under the license issued by the Ministry
of Energy, Water and Communication in Malaysia. At the global market, TM can be
regarded as an emerging leader in Asian communications with operations and interest in
the Asian region as well as globally. TM products include the provision of communication
services and solutions for fixed line, data, internet and multimedia.
As a model corporate citizen committed to good governance and transparency, TM

continues its pledge to ensure the integrity of our processes, people and reputation as
well as the sustainability of our operations. Our Corporate Responsibility (CR) ethos
reinforces responsible behavior in the four main domains of the marketplace, workplace,
the community and the environment. With a focus on ICT, the Group further promotes 3
major platforms i.e. education, community/nation-building and environment, through our
Reaching Out programmes.
TM looks forward to continue serving customers with its comprehensive suite of offerings,
delivering a seamless digital experience and integrated business solutions to meet their
lifestyle and business communication needs - towards making “Life and Business Made
Easier, for a Better Malaysian “
1.1 VISION & MISSION
The vision and mission of TM are as follows:
2. REPORTING EVALUATION STRUCTURE
The balanced scorecard (BSC) is a strategic planning and management system that
organizations use to:
 Communicate what they are trying to accomplish
 Align the day-to-day work that everyone is doing with strategy
 Prioritize projects, products, and services
 Measure and monitor progress towards strategic targets
TM is using balance scorecard (BSC) to make sure its employee force of 28,047 people
(TM annual report 2014) work efficiently to achieve its vision which is “to make life easier,
for a better Malaysia”.
The cascading structure in TM is based on the organizational hierarchy that is termed as

“tier”. The tier are organize as follows:
i. The top most tiers refer to the TM group and the Group CEO & C-level
ii. Tier 1 refers to all the heads of division reporting directly to group CEO & C-Level
iii. Tier 2 refers to all the units and heads reporting directly to Tier 1
iv. Tier 3 onwards refers to the subsequent direct reports to the higher tier
The diagram of TM’s organizational hierarchy/ tier as shown below:

Each tier have its area to focus as the table shown below:
Perspective GCEO & C-Level Tier 1 Tier 2 Tier 3 Tier 4

(Reporting To (Reporting To (Reporting To (Reporting To Tier
GCEO) Tier 1) Tier 2) 3)
Financial • Group Revenue • Opco Revenue • Division Revenue • Unit Revenue (RM) • Individual Accounts
(RM) (RM) (RM) • Unit OPEX – Actual Revenue (RM)
• OPEX Efficiency • Opco OPEX – • Divisional OPEX Vs Budget (%) • Unit OPEX – Actual
• OPEX Revenue Actual Vs Budget – Actual Vs Vs Budget (%)
(%) (%) Budget (%)
Customer • CSI • ICSI % Of SLA • ICSI% Of SLA • ICSI% Of SLA • ICSI % Of SLA
• Csr Index (Gcc, • Csr Spending • Nil • Nil • Nil
Ghr & Grp Mktg) Ratio
Internal • Revenue Market • Functional Kpi • Functional Kpi • Functional Kpi • Functional Kpi
Business Share (%)
Process • No Of Inter Opco

Budnling (Unit)
• % Service
Fulfillment Within
48 Hours
Organization • % Achievement • Opco Competency • 40 Hrs Training • 40 Hrs Training On • 40 Hrs Training On
Learning Towards Desired Index (%) On Functional Functional Functional
And Growth Tm Compentency • Opco Compliance Competency % Competency % Competency %

Level (Ci) To Performance Smartorange Smartorange Smartorange
• % Of Executive Curve (%) Requirement Requirement Requirement
Performs Above • Divisional EEI • % Of Deployment • Nil • Nil
Target (%) Of Bsc • Divisional EEI • Divisional EEI
• Group EEI • Divisional EEI
2.1 PERFORMANCE MANAGEMENT
Performance management is a set of measurable criteria and methodology to enable

performance to be measured objectively. It comprises of financial and non-financial
manners to establish and monitor the progress of organization towards its vision.
While performance measurement asks, “How do we track the progress of the strategy
we’ve put in place?”, performance management asks, “How do we manage the strategy
we’ve put in place?” This is a subtle (but important) distinction.
The management process requires that your leadership team either department or
enterprise meet on a regular basis and discuss the results. The team should then discuss
the actions they’re going to take to improve the results and determine where your projects
link into those results.
So, while your measures may tell you where you are today, the actions you’re going to
take to improve those results for the rest of the year are more important. Leadership
teams should be able to say, “We’re behind in this performance measure; who is
responsible for this particular measure?” Accountability for initiatives is important, and
getting your leadership team aligned around your results will drive your company forward.
TM applied e-BSC where it uses an online system called Managing Accountability and
Performance System (MAPS). Employees have to key in and rate their performance in
the system and this performance is monitored by each division managers. MAPS system
is used in at 3-stages:
i. The contracting exercise at the beginning of the year
Business planning (individual Key Performance Indicator (KPI) are developed in
this stage )
ii. Tracking of performance in the middle of the year
Performance cycle
iii. Evaluating performance at the end of the year.
Performance-based rewards system.
MAPS focus in 4 Key Perspectives Measurement:

i. Financial : to grow revenue profitably and to manage cost effectively.
ii. Customer : to delight the customers while creating the synergy with
partners.
iii. Internal business process : to track on execution of projects and plans on
whether they are done effectively.
iv. Organizational Learning and Growth : to boost human capital execution
capacity.
2.1.1 PERFOMANCE SYSTEM

The performance system are divided into two groups.
i. Performance system for executives
ii. Performance system for non executives
PERFOMANCE SYSTEM – EXECUTIVES

The dashboard of performance system for executives is shown below.
The executive’s level also have 360 degree feedback for the subordinates, peers,
supervisor and internal customers’ of the employee to give opinion about him/her.
PERFOMANCE SYSTEM - EXECUTIVES
PERFOMANCE SYSTEM – NON EXECUTIVES

The dashboard of performance system for non-executives is shown below.
2.2 PERFORMANCE MEASUREMENT
Performance measurement deals specifically with performance measures. These are the
quantitative indicators you put in place to track the progress against your strategy.
Typically good performance measures cover a wide variety of criteria, like:
1. Financial measures
2. Customer measures
3. Process measures
4. People measures
Four Process of Performance Measurement:
1. Clarify and tranSLAte the organization's vision into strategy.

2. Strategic management will communicate and link the strategic objectives and
measures.
3. To plan, set targets and align the strategic initiatives.
4. Balanced scorecard enhances strategic feedback and learning.
TM uses Balanced Scorecards (BSC) to translate visions and company's strategies and
to set of measurable objectives that can be interpreted into some meaningful form as a
check list to monitor the performance of the company
3. BSC APPLIED IN TM
3.1 Overview
Harvard Business Review published the article “The Balanced Scorecard – Measures
That Drive Performance” which was jointly written by Dr. David Norton (the then CEO
of Nolan-Norton and now President of Balanced Scorecard Collaborative-BSCol) and
Professor Dr. Robert Kaplan of the Harvard Business School.
The article summarized the findings from an in-depth study of 12 manufacturing and
service companies that was carried out in 1990. The research program set out to design
a new approach to performance measurement that dealt with a growing managerial
problem – that accounting, or financial, measures were increasingly being found wanting
in assessing and managing organizational performance. Norton and Kaplan premised
that what business leaders required was a new mechanism with which it can take a
holistic view of organizational performance, thus, providing more than the lagging
financial metrics on which most organizations had based their decisions.
Consequently, Norton and Kaplan introduced a new performance measurement

framework, which they named it: Balanced Scorecard.
Figure 3.1 :The Balanced Score Card

The balanced Scorecard is a management system that enables organizations to clarify

their vision and strategy and tranSLAte them into action. It provides feedback around both
the internal business processes and external outcomes in order to continuously improve
strategic performance and results. When fully deployed, the balanced scorecard
transforms strategic planning from an academic exercise into the nerve center of an
enterprise.
It’s a way of looking at your organization that focuses on big-picture strategic goals. It
also helps to choose the right things to measure so that you can reach those goals.
Traditionally, companies have judged their health by how much money they make.
Financial measures are definitely important, but they only give you part of the picture.
They focus on the short-term, and you’re trying to build an organization to stand the test
of time. The name “balanced scorecard” comes from the idea of looking at strategic
measures in addition to traditional financial measures to get a more “balanced” view of
performance.
t’s this focus on both high-level strategy and low-level measures that sets the balanced
scorecard apart from other performance management methodologies. It takes your big,
fuzzy strategic vision and breaks it down into specific, actionable steps to take on a day-
to-day basis.
The Balanced Scorecard is basically a strategy management and implementation system

that comprise a Strategy Map and an accompanying Balanced Scorecard of strategic
measures, targets, and initiatives.
The Strategy Map serves as a strategy implementation roadmap in that it describes the
high-level strategic objectives that the organization must deliver if it is to successfully
execute its strategy. Central to the premise of the Balanced Scorecard philosophy is that
successful strategy implementation is the result of causal relationships within and
between typically three non-financial perspectives and one financial perspective.
Figure 3.2 : Strategy Map
Crucially, the Strategy Map and accompanying scorecard is a hypothesis. It is

management’s best guess as to what is required to implement the strategy. The Balanced
Scorecard basically provides a framework to tranSLAte a strategy into operational terms.
3.2 5 Principles of Strategy Focused Organizaton.
To understand and implement the Balanced Scorecard Management System, we first

need to understand the five principles of the Strategy-Focused Organization (SFO).
These principles as adopted and adapted by Norton and Kaplan, and are required for the
successful strategy implementation.
The first principle is to tranSLAte the strategy to operational terms. It incorporates the
framework for articulating strategic objectives, measures, targets, and initiatives. Strategy
Map and Balanced Scorecard may be created at the enterprise-level and then devolved
to the functional level.
The second principle is to secure synergistic benefits which require the explication of
common themes and objectives than are developed at the organizational level. The
components are corporate roles, business unit synergies, and shared service synergies.
The third principle is to make strategy everyone’s everyday job. This is where strategy is
moved out of the boardroom and into backroom. Strategic awareness requires concerted,
ongoing, educational, and communication efforts. The components are strategic
awareness, personal scorecards, and balanced reward.
The fourth principle is to make strategy a continual process. The Balanced Scorecard is
placed at the heart of the management system and it links budget to strategies which also
calls for an inculcated strategic learning process. The components are budget and
strategy linking, analytical and information systems, and strategic learning process which
captures and act on strategic feedbacks.
The fifth and final principle is to mobilize change through executive leadership. In order
to sustain the scorecard success, top management must introduce and champion the
scorecard. Senior management must be galvanized behind the scorecard. The
components are mobilization, governance process and strategic management systems.
The balanced scorecard methodology builds on some key concepts of previous

management ideas such as Total Quality Management (TQM), including customer-
defined quality, continuous improvement, employee empowerment, and primarily,
measurement-based management and feedback.
The goal of making measurements is to permit managers to see their company more
clearly, from many perspectives, and hence to make wiser long-term decisions.
3.3 Perspectives
A balanced scorecard looks at your organization from four different perspectives to

measure its health. Each of these perspectives focuses on a different side of your
company, creating a balanced view of your organization.
The balanced scorecard allows managers to look at the business from four important
perspectives. It provides answers to four basic questions:
How do we look to shareholders? (Financial perspective)

 Just because we’re taking a balanced look at your organization doesn’t mean that
we want to ignore traditional financial measures. Quite the contrary, the financial
perspective is a major focus of the balanced scorecard.
 Are you making money?
 Are your shareholders happy?
The financial health of your organization may be a lagging indicator showing the result of
past decisions, but it’s still incredibly important. Money keeps companies alive, and the
financial perspective focuses solely on that.
How do customers see us? (Customer perspective)

 The customer perspective focuses on the people who actually buy your products
and services. Are you winning new business?
 How about keeping your existing customers happy?
 How are you viewed in your industry compared to your competitors?
Customer satisfaction is a great forward-looking indicator of success. The way you treat
your customers today directly impacts how much money you’ll make tomorrow.
What must we excel at? (Internal perspective)

 The internal business processes perspective looks at how smoothly your business
is running. Efficiency is important here. It’s all about reducing waste, speeding
things up, and doing more with less.
 Are there unneeded obstacles standing between new ideas and execution?
 How quickly can you adapt to changing business conditions?
 Are you providing what your customers actually want? What should you be best
at?
Can we continue to improve and create value? Innovation and Learning

perspective)
 The learning and growth perspective looks at your overall corporate culture. Are
people aware of the latest industry trends?
 Is it easy for employees to collaborate and share knowledge, or is your company
a mess of tangled bureaucracy?
 Does everyone have access to training and continuing education opportunities?
 Are people able to use the latest devices and software, or are your archaic systems
stuck running yesterday’s tech?
 What are you doing to make sure your organization is staying ahead of your
competition?
Figure 3.3 The 4 Perpectives in BSC

The detail eloboration on the 4 perspectives are as follows :
1. The Financial Perspective
Kaplan and Norton do not disregard the traditional need for financial data. Timely and
accurate funding data will always be a priority, and managers will do whatever necessary
to provide it. In fact, often there is more than enough handling and processing of financial
data. With the implementation of a corporate database, it is hoped that more of the
processing can be centralized and automated. But the point is that the current emphasis
on financials leads to the "unbalanced" situation with regard to other perspectives.
There is perhaps a need to include additional financial-related data, such as risk

assessment and cost-benefit data, in this category.
2. The Customer Perspective
Recent management philosophy has shown an increasing realization of the importance

of customer focus and customer satisfaction in any business. These are leading
indicators: if customers are not satisfied, they will eventually find other suppliers that will
meet their needs. Poor performance from this perspective is thus a leading indicator of
future decline, even though the current financial picture may look good.
In developing metrics for satisfaction, customers should be analyzed in terms of kinds of

customers and the kinds of processes for which we are providing a product or service to
those customer groups.
3. The Business Process Perspective
This perspective refers to internal business processes. Metrics based on this perspective
allow the managers to know how well their business is running, and whether its products
and services conform to customer requirements (the mission). These metrics have to be
carefully designed by those who know these processes most intimately; with our unique
missions these are not something that can be developed by outside consultants.
In addition to the strategic management process, two kinds of business processes may
be identified: a) mission-oriented processes, and b) support processes. Mission-oriented
processes are the special functions of government offices, and many unique problems
are encountered in these processes. The support processes are more repetitive in nature,
and hence easier to measure and benchmark using generic metrics.
4. The Learning and Growth Perspective
This perspective includes employee training and corporate cultural attitudes related to
both individual and corporate self-improvement. In a knowledge-worker organization,
people -- the only repository of knowledge -- are the main resource. In the current climate
of rapid technological change, it is becoming necessary for knowledge workers to be in a
continuous learning mode. Government agencies often find themselves unable to hire
new technical workers and at the same time is showing a decline in training of existing
employees. This is a leading indicator of 'brain drain' that must be reversed. Metrics can
be put into place to guide managers in focusing training funds where they can help the
most. In any case, learning and growth constitute the essential foundation for success of
any knowledge-worker organization.
3.3 Balanced Score Card in TM
TM is committed in ensuring the success of its BSC’s implementation and usage. This is
manifested in its continuous effort to evaluate and improve the extent of BSC usage in
the company. The evaluation process is called a BSC health-check program,
 Conducted on a periodic basis.
 To review the current usage of BSC in TM
 To improve its usage as well as to determine its effectiveness as a tool to support
the strategic management process.
 To develop recommendations aimed at closing the gaps identified in the usage of
BSC methodology.
Findings from the health-check are based on a rating scale of 1-5 ranging from strongly
disagree to strongly agree.
Balanced scorecard used as a strategy implementation tool to assist TM in achieving its

business target. Besides than to gauge employee sentiment on all aspects of the
company’s operations, TM carries out a yearly employee satisfaction survey. They tried
to involve the entire employee through the balanced scorecard and KPI by cascaded
throughout the organization and monitored through the performance evaluation system
for all employees (MAPS-Management Performance System for the personal scorecard).
The Generic BSC implemented in TM and the measurement of all perspectives can be
seen in the following table:
Figure 3.4 : Generic Deliverables in BSC

In Financial perspectives, everyone in TM will measure the same thing as what the top
management is measured with. The only different is the weightage of the KPI according
to trhe position of the employee. This is also called as Shared KPI.
For instance, as a Head of Department (HOD @ Tier 2), the Financial Perspectives shall
carry around 20% -30% of total KPI, while for an Executive (Tier 4) it is weighted at only
5%.
Figure 3.5 Financial Perspective
Same goes to Customers Service perspectives, whether or not your position dealing
directly with TM’s customers, individual KPI will also shall carry the result of achievement
as the philosophy is every and each task given to every employee is indirectly contribute
to the satisfaction of TM’s customers as a whole. This is also called a Shared KPI.
Figure 3.6 Customer Perspective

As the previous Shared KPI is measured, the weight of the measurement will be based
on the Evaluation Structure tiers.
The Internal Business Process is the “real” job function of every position in TM. It
represent the day-to-day task as well as the task implemented according to everyone’s
expertise. The score can be up to 80% of total KPI weight for the Executive level. The
weight decrease as the position go up higher.
Figure 3.7 Internal Business Perspective

Organizational Learning & Growth is also an individual KPI measurement. It shows how
the organisation is able to sustain the excellent of their services by enhancing their
employee performance.
Figure 3.8 Organization Learning and Growth Perspective
Balance Score Card has implemented in TM since 1990’s and TM have improved the
usage of the mechanism to incorporate with its vision, mission and business strategy
objective.
As an evidence, in 2014, TM tops the list of companies in Malaysia with good disclosures,
followed by stock market regulator Bursa Malaysia Bhd last year, according to a study by
the Minority shareholder Watchdog Group (MSWG).
4. FINDINGS
The used of balanced scorecard is very helpful in monitoring the management of the
organization but it is very challenging as the implementation is very costly. It requires
some cost in setting up this system such as software licenses expense and installation
cost. This will results in large sum of money being expense before profit is generated.
Besides, the needs of expertise to implement a comprehensive and proper system will
consequently increases the cost of management as well.
Different business unit using the different balanced scorecard measures to achieve its
goal. In general, balanced scorecard consists of two types of measure. There are
common measure (measures across all subsidiaries or units) and unique measure
(measure each business unit). The use of unique measures in order to carry out the
system is tough because unique measures are significant in capturing the unit's business
strategy. If the manager does not actively participating in evaluating one unit's
performance, thus significance of the unique measures may not be appreciated.
The four perspectives in a well-designed balanced scorecard form a chain of cause-and-

effect relationships that determine the effectiveness of the strategy implementation.
Proper implementation will results in excellent performance. However, it is not easy to
identify and establish the cause and effect relationship. Inappropriate measure will result
in negative outcomes. Managers realize and understand that there are strong linkages
between customer satisfactions, employees' satisfactions, financial performance, internal
business process and company's learning and growth activities. Nevertheless, the
balanced scorecard system does not provide the detail guidelines on to how to improve
performance to achieve organization's goals.
In addition, balanced scorecard system need to be updated constantly. This update is

useful as it requires repositioning with changing of strategies or company structure in
order to keep in pace with the complex business environment. However, constant
updating of balance scorecard may be tedious and time consuming.
Lastly, lack of integration and communication of the objectives of the organization at

difference level of management would cause the lower level of employees can't see the
big picture of the system. Implementation of the balanced scorecard requires commitment
from all management levels, especially company's top organizational structure. Most of
them refuse to coordinate in the system because they may view the system as a threat
that implies they have underperformed in the past.
TM is using BSC to translate their visions and company's strategies into a set of
measureable objectives that can be interpreted into some meaningful form as a check list
to monitor the performance of the company. Basically, the BSC used by TM is an e-BSC
where it uses an online system called MAPS to allow employees to key in their
performance according to different areas concerned in the scorecard and monitor by each
division managers. The main concern of financial perspective will be to grow revenue
profitably and to manage cost effectively, customer perspective is to delight the customers
while creating the synergy with partners, internal business process is on execution of
projects and plans on whether they are done effectively and the organizational learning
and growth is to boost human capital execution capacity.
The implementation of BSC in TM consists of three stages, which are business planning,
performance cycle and then finally lead to a performance-based rewards system. In
business planning, BSC and individual Key Performance Indicator (KPI) are developed in
this stage where the KPI is used to measure the key performance in a specific division of
the company. BSC is developed through a process of six steps which include:
Firstly is to understand and develop the business strategic direction of TM and for
example the vision of TM is "to be Malaysia's leading new generation communications
provider, embracing customer needs through innovation and execution excellence" and
the mission is "to strive towards customer service excellence, enrich consumer lifestyle
and experience, deliver value to stakeholders and improve the performance of our
business customers." From these two statements it is clear that TM is stressing highly on
customers' satisfaction and so its direction is clearly stated in its vision and mission
statement (TM Annual Report, 2008).
Next is to decompose those TM's visions and missions into smaller components called
objectives that can drive the performance and measurable. With those components, TM
Group top management now will be able to create a strategy map using cause-effect
linkages for example, how an objective is dependent on another objective. A strategy map
(appendix) is important in BSC as it is the fundamental part of it to achieve towards the
objectives of the company and drive it towards the vision.
In step 5 is to develop KPI to measure and target to track strategic and operational
progress of the company to see if it has achieved the desired outcomes of the objectives.
Lastly is to identify the key strategic initiatives as a way to ensure the achievement of
strategic objectives for example funding of resource and implementation mechanisms.
In MAPS System, an individual employee will log into the system and key in their personal
information and then the division scorecard will be displayed. This is the part where
employees are required to submit their performance into the online system MAPS for the
company to track their performance into a KPI template provided in the system. Then,
employees are required to choose the areas that are relevant to his/her field for each
perspective. In the individual scorecard, the employee has to key in the target that is
challenging but achievable. In performance cycle phase, he/she will then be required to
key in the actual result and comment on the target. This performance scorecard will then
linked to the reward system to reward the employees accordingly.
Since the issue faced by TM is the quality of service, Total Quality Management (TQM)
is able complement the shortcoming of BSC. A quality service is vital for a
telecommunication company especially in such a competitive market in Malaysia. TQM is
a type of performance system that is used as a long-term measure to reduce errors in a
service or manufacturing process and focusing on customers' satisfaction by ensuring
workers have the highest level of training and modernization of equipment and limit errors
to 1 per 1 million units produced. ISO 9000, the international standard defined that TQM
as a management approach of an organization that centered on quality with participation

of all members aiming at long term success through customers' satisfaction and benefits
to the members of the organization and society (Subburaj, 2005).
TQM definitely benefits TM in many ways. It can apply this to the engineering of its
telecommunication networks such as its fixed line division, cellular services division as
well as the broadband division to improve the quality of services. Say for example, an
uninterrupted broadband service for the customers that only allows 0.0001% of down
time, same applies to the cellular networks and fixed line services. This definitely provides
benefits and robust solutions to the company to enhance customers' satisfactions on
quality services.
To achieve the TQM, TM must always from time to time send its engineers and other
employees for training and make sure that they are experts in their field. Also, TM must
spend more resources on its R&D division, known as TMRND, to provide the latest
equipment for the engineers to ensure that they have the best equipment to maintain the
network to provide uninterrupted services. This is a long-term implementation for TM and
it requires continuous improvement over time not only by the top management but also
all the members of the organization working together. Also, TM will be benefited in the
long run and enhanced its branding through attaining the TQM certification of ISO 9000.
5. CONCLUSION
Measures that Move Companies Forward
As companies have applied the balanced scorecard, we have begun to recognize that the
scorecard represents a fundamental change in the underlying assumptions about
performance measurement. As the controllers and finance vice presidents involved in the
research project took the concept back to their organizations, the project participants
found that they could not implement the balanced scorecard without the involvement of
the senior managers who have the most complete picture of the company’s vision and
priorities. This was revealing because most existing performance measurement systems
have been designed and overseen by financial experts. Rarely do controllers need to
have senior managers so heavily involved.
Probably because traditional measurement systems have sprung from the finance
function, the systems have a control bias. That is, traditional performance measurement
systems specify the particular actions they want employees to take and then measure to
see whether the employees have in fact taken those actions. In that way, the systems try
to control behaviour. Such measurement systems fit with the engineering mentality of the
Industrial Age.
The balanced scorecard, on the other hand, is well suited to the kind of organization many
companies are trying to become. The scorecard puts strategy and vision, not control, at
the centre. It establishes goals but assumes that people will adopt whatever behaviour
and take whatever actions are necessary to arrive at those goals. The measures are
designed to pull people toward the overall vision. Senior managers may know what the
end result should be, but they cannot tell employees exactly how to achieve that result, if
only because the conditions in which employees operate are constantly changing.
This new approach to performance measurement is consistent with the initiatives under
way in many companies: cross-functional integration, customer-supplier partnerships,
global scale, continuous improvement, and team rather than individual accountability. By
combining the financial, customer, internal process and innovation, and organizational
learning perspectives, the balanced scorecard helps managers understand, at least
implicitly, many interrelationships. This understanding can help managers transcend
traditional notions about functional barriers and ultimately lead to improved decision
making and problem solving. The balanced scorecard keeps companies looking—and
moving—forward instead of backward.
1. REFERENCES
https://en.wikipedia.org/wiki/Balanced_scorecard
http://www.balancedscorecard.org/BSC-Basics/About-the-Balanced-Scorecard
https://balancedscorecards.com/balanced-scorecard/#learn-overview
https://hbr.org/1992/01/the-balanced-scorecard-measures-that-drive-performance-
2
https://www.scribd.com/presentation/210750360/discuss-about-TM-Malaysia-
balance-scrore-card
https://www.slideshare.net/husenamr/performance-measurement-system-of-
telekom-malaysia
http://www.thestar.com.my/business/business-news/2015/05/12/tm-and-bursa-
among-firms-with-sound-corporate-governance/
Balanced Score Card in
TM (Telekom Malaysia Berhad)
Performance measurement vs.
Performance management ?
Presented by:
Shamsiah Noor Binti Samsuri
Mazni Binti Mohd Said
Nur Amiza Zulaika Zaidan
Diana Suraya Binti Mawardi
Noraishah Binti Ramlan
Syed Nazrin Bin Syed Yusof
Topic Overview
• TM Berhad
• Performance Management
• Performance Measurement
• Balanced Scorecard
• Finding & Conclusion
TM Berhad (Overview)
 The largest integrated communications solutions

provider in Malaysia
 One of Asia’s leading communications companies with market
capitalization of RM11 billion and employee force of 28,047 people (TM
annual report 2014).
 TM is the major player in the Malaysian telecommunication industry,
providing telecommunication and related services under the license
issued by the Ministry of Energy, Water and Communication in
Malaysia.
 At the global market, TM can be regarded as an emerging leader in
Asian communications with operations and interest in the Asian region
as well as globally.
 TM products include the provision of communication services and
solutions for fixed line, data, internet and multimedia.
TM Berhad (Overview)
The cascading structure in TM is based on the organizational

hierarchy that is termed as “tier”.
1. The top most tiers refer to the TM group and the Group
CEO and all C-Level
2. Tier 1 refers to all the heads of division reporting directly to
group CEO and all C-Level
3. Tier 2 refers to all the units and heads reporting directly to
Tier 1
4. Tier 3 onwards refers to the subsequent direct reports to the
higher tier
TM Reporting & Evaluation
Structure
GCEO
C-Level
CTIO CSO CFO
Tier 1 Division 1 GM/HOD GM/HOD
Tier 2 AGM AGM AGM
Tier 3 MGR MGR MGR
Tier 4 STAFF STAFF STAFF

TIER 1 TIER 2 TIER 3 TIER 4
PERSPECTIVE GCEO & C-LEVEL (REPORTING TO C- (REPORTING TO (REPORTING TO (REPORTING TO
LEVEL) TIER 1) TIER 2) TIER 3)
• INDIVIDUAL
• OPCO REVENUE • DIVISION • UNIT REVENUE
• GROUP REVENUE ACCOUNTS
(RM) REVENUE (RM) (RM)
(RM) REVENUE (RM)
FINANCIAL • OPCO OPEX – • DIVISIONAL OPEX • UNIT OPEX –
• OPEX EFFICIENCY • UNIT OPEX –
ACTUAL VS – ACTUAL VS ACTUAL VS
• OPEX REVENUE (%) ACTUAL VS
BUDGET (%) BUDGET (%) BUDGET (%)
BUDGET (%)
• CSI • ICSI % OF SLA

• ICSI% OF SLA • ICSI% OF SLA • ICSI % OF SLA
CUSTOMER • CSR INDEX (GCC, • CSR SPENDING
• NIL • NIL • NIL
GHR & GRP MKTG) RATIO
• REVENUE MARKET
SHARE (%)
INTERNAL • NO OF INTER OPCO
BUSINESS BUDNLING (UNIT) • FUNCTIONAL KPI • FUNCTIONAL KPI • FUNCTIONAL KPI • FUNCTIONAL KPI
PROCESS • % SERVICE
FULFILLMENT
WITHIN 48 HOURS
• 40 HRS TRAINING
• % ACHIEVEMENT • OPCO
ON FUNCTIONAL • 40 HRS TRAINING • 40 HRS TRAINING
TOWARDS DESIRED COMPETENCY
COMPETENCY % ON FUNCTIONAL ON FUNCTIONAL
TM COMPENTENCY INDEX (%)
ORGANIZATION SMARTORANGE COMPETENCY % COMPETENCY %
LEVEL (CI) • OPCO
LEARNING AND REQUIREMENT SMARTORANGE SMARTORANGE
• % OF EXECUTIVE COMPLIANCE TO
GROWTH • % OF REQUIREMENT REQUIREMENT
PERFORMS ABOVE PERFORMANCE
DEPLOYMENT OF • NIL • NIL
TARGET (%) CURVE (%)
BSC • DIVISIONAL EEI • DIVISIONAL EEI
• GROUP EEI • DIVISIONAL EEI
• DIVISIONAL EEI
Performance Management
• A set of measurable criteria and methodology to enable

performance to be measured objectively.
• It comprises of financial and non-financial manners to
establish and monitor the progress of organization
towards its vision.
TM applied e-BSC where it uses an online system called

Managing Accountability and Performance System
(MAPS)
 Employees to key in and rate their performance in the
system
 Monitored by each division managers
Performance Management in TM
 4 Key Perspectives Measurement:
Deliverables Measure:
to grow revenue profitably and to manage cost effectively.

Financial
to delight the customers while creating the synergy with

Customer partners.
to track on execution of projects and plans on whether

Internal business process they are done effectively.
Organizational Learning to boost human capital execution capacity.

and Growth
Performance Management in TM
 MAPS system is used in at 3-stages:

 The contracting exercise at the beginning of the year
- Business planning (individual Key Performance Indicator (KPI)

are developed in this stage )
 Tracking of performance in the middle of the year

- Performance cycle
 Evaluating performance at the end of the year.

- Performance-based rewards system.
PERFORMANCE SYSTEM
For Executives
PERFORMANCE SYSTEM
For Executives
PERFORMANCE SYSTEM
For Non Executives
Performance Measurement
• Defines your interaction with an employee at every

step of the way in between these major life cycle
occurrences.
• Performance management makes every interaction

opportunity with an employee into a learning
occasion.
Four Process of Performance Measurement:

1. Clarify and translate the organization's vision into
strategy.
2. Strategic management will communicate and link the
strategic objectives and measures.
3. To plan, set targets and align the strategic initiatives.
4. Balanced scorecard enhances strategic feedback and
learning.
 TM uses Balanced Scorecards (BSC):
 to translate visions and company's strategies

 to a set of measurable objectives that can be
interpreted into some meaningful form as a check list
to monitor the performance of the company
The process of development and
implementation of BSC in TM
I
Review & M
Communicate results P
L
E
M
E
N
Establish linkage to T
other managements A
process T
A
I
O
N
TM Mission
TM Vision Manage & review BSC S
Understand and Establish
TM Strategic articulate strategic Establish KPI Performance and
strategy objectives action plan T
Direction
A
CV Matrix
G
E
DEVELOPMENT STAGE
Balanced ScoreCard
A strategic planning and management system that organizations use to:
• Communicate what they are trying to accomplish

• Align the day-to-day work that everyone is doing with strategy
• Prioritize projects, products, and services
• Measure and monitor progress towards strategic targets
Balanced Scorecards in TM
TM is committed in ensuring the success of its BSC’s implementation and usage.
This is manifested in its continuous effort to evaluate and improve the extent of
BSC usage in the company. The evaluation process is called a BSC health-check
program,
 conducted on a periodic basis.

 to review the current usage of BSC in TM
 to improve its usage as well as to determine its effectiveness as a tool to
support the strategic management process.
 to develop recommendations aimed at closing the gaps identified in the usage
of BSC methodology.
 Findings from the health-check are based on a rating scale of 1-5 ranging from
strongly disagree to strongly agree.
Balanced Scorecards in TM
The evaluation was based on the principles of a Strategy-Focused Organization
(SFO) by Kaplan and Norton, the ultimate aim of any organization adopting BSC.
The five principles of SFO are:
1. Mobilize change through executive leadership

2. Translate the strategy to operational terms
3. Align the organization to the strategy
4. Make strategy everyone’s job
5. Make strategy a continual process.
Balanced scorecard in TM
• Balanced scorecard used as a strategy implementation tool to
assist TM in achieving its business target.
• Besides than to gauge employee sentiment on all aspects of the

company’s operations, TM carries out a yearly employee
satisfaction survey.
• They tried to involve the entire employee through the balanced

scorecard and KPI by cascaded throughout the organization and
monitored through the performance evaluation system for all
employees (MAPS-Management Performance System for the
personal scorecard).
Generic Scorecard
Perspective Strategic Objective Measures
Financial • Support Business Growth • Total Revenue

• Measure cost Effectively • OPEX
• CAPEX
• Labour cost/ Total cost
• Revenue
Customer • Excellent Customer Service • Customer service index

• % of recruitment
• Timely respond to complaints
Internal Business • Improve operations management • Competency development

Process • Improve process management program
• Skill in audit
Learning & Growth • Human capital /leadership/talent • Competency level

development • Employee satisfaction index
• Manpower optimization • % achievement towards desired
• Productivity TM
Balanced Scorecard : Element 1
Strategic Objectives KPI
Increase shareholder value • Group revenue (RM)

 Group EBITDA margin (%)
 Group PATAMI (RM)
 Group ROE (% )
Mitigate fixed decline • Malaysian business revenue
Increase domestic cellular • WEBE revenue

business
Financial Perspective Grow international business • TMI revenue (RM)
Grow revenue of retained

ventures business • TMV External revenue (RM)
Manage OPEX efficiency • OPEX efficiency

•
Manage assets efficiency • ROA

Customer centric solution • CSI (Customer Service Index)
Reliable services • TM Group CSI

Customer Service Perspective
Convenience • Compliance achievement to TM
group customer service charter
(%)
Win-win partnership • Transparency Index
Good corporate citizen • CSR Media Value Index (RM)

• Return on Sport Sponsorship
Investment
Turn around fixed • Revenue decline in fixed services

• No. Of broadband subscribers
Turn around WEBE • Growth in 4G/LTE market revenue
share
Strategic Regional Expansion • Revenue market share
Maximize group synergies • Incremental sales

• Increase in traffic/revenue from WEBE
& TM international companies
• Procurement cost saving
Improve critical business • Service fulfilment within 48 hours (%)
processes, quality & services • 4G/LTE network availability (%)
Internal business process • Mean time to restore (hours)
• Drop calls (%)
Build TM brand value • TM group brand value increase (%)
Rationalized ventures business • Completed rationalization of non-core

companies (%)
Improve cost and capital efficiency Group ROCE (%)
Ensure support, compliance & Compliance achievement (%)
influence regulatory & national
policy
Perform corporate social CSR spending ratio (%)
responsibility
Organizational learning and Human capital & leadership/talent • Talent leadership pool numbers
growth development • Achievement towards the
desired TM competency level of
75%
• Key positions filled within 1
month (%)
Intensify performance driven Operational efficiency

culture
Manpower optimization & Employee satisfaction index

productivity
Telekom Malaysia Bhd tops the list of
companies in Malaysia with good
disclosures, followed by stock market
regulator Bursa Malaysia Bhd last year,
according to a study by the Minority
Shareholder Watchdog Group
(MSWG).
Discussion
 TM has achieved the higher performance of the staffs by using the
Performance Evaluation System (Personal Scorecard).
 The measurement for the performance of each staff can be evaluated

easily so that bonus and other increment will be given to them fairly.
 Bonus and increment actually motivate the staffs to work harder and
show their better performance. The bonus for the non-executive is same
for every person according to the top management, but the bonus for
executives are different depends on their performance evaluation.
 Finally, the management of TM also believed that recently BSC is

successfully implemented throughout the organization.
Discussion - Comparison
Performance Performance
Management Measurement
Defines your interaction with an A set of measurable criteria
employee at every step of the and methodology to enable
way in between these major life performance to be measured
cycle occurrences. objectively.
Performance management It comprises of financial and

makes every interaction non-financial manners to
opportunity with an employee establish and monitor the
into a learning occasion. progress of organization
towards its vision.
Problems and Challenges
 The vision barrier - the HR person agreed that the strategy developed
through BSC is not understood by those who must implement it.
 Even though each employees involved in the development of BSC,
sometimes it is difficult to make sure that all the employees understand
their role and responsibility.
 Besides that, the management feels that the vision of the organization is
not translated into strategic goals and objectives within corporate center,
OPCOS and subsidiaries.
 The people barrier - the personal KPI, goals, knowledge building and
competencies among employees are not linked to strategy implementation of
TM.
Problems and Challenges
 The management and operational system:

 In TM, management systems are designed for operational control and
tied to budget not the strategy developed. This is not aligned with the
idea of implementing BSC.
 The key work processes determined in TM are not designed to leverage

the drivers of corporation strategy. For example, the lower level such as
management and operational are more focus on the financial that is tied
with the budget such as target revenue and their prospects in the future.
They have their own strategy to achieve within different division.
 Consequently, it is not tied with the top management strategy because it

was set general. For the lower level, they prefer a specific strategy and
easier to understand and achieve.
Recommendations
 TM is facing a lack of commitment, understanding and communication

among their employees.
 TM should encourage employee empowerment by working together

with the management. Eg; set up workshops with employees and
management to translate the strategy and vision into key performance
indicator.
 Communication is critical part in implementing BSC and it difficult to

get it right throughout the big organization like TM.
 Required effective communication among employees and

management, and top- down commitment, as well as bottom-up input.
Conclusions
 Implementing balanced scorecard across the business is attractive

but it is required a mind set change among employees and
management.
 Positive behaviors needed to support the successful of balanced

scorecard.
 Working together to achieve goals, setting out clear goals and areas
of accountability and responsibility and implementing a range of hard
and soft measures that help to manage the business and drive overall
performance improvement.
 With the comprehensive usage of BSC in TM, Performance

Measurement is better suited in achieving the higher performance of
their employees.

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GROUP ASSIGNMENT

BALANCE SCORECARD IN TM (TELEKOM MALAYSIA BERHAD)

SHAMSIAH NOOR BINTI SAMSURI (ZP03414)

SUBJECT MANAGERIAL ACCOUNTING

SUBJECT CODE ZCMA6022

LECTURER DR ROZITA BINTI AMIRUDDIN

TABLE OF CONTENT PAGE

2 Reporting Evaluation Structure 4

3.2 (5) Five Principles of Strategy Focused Organization. 13

Telekom Malaysia Berhad (TM) is the largest integrated communications solutions

As a model corporate citizen committed to good governance and transparency, TM

1.1 VISION & MISSION

The vision and mission of TM are as follows:

2. REPORTING EVALUATION STRUCTURE

The cascading structure in TM is based on the organizational hierarchy that is termed as

The diagram of TM’s organizational hierarchy/ tier as shown below:

Perspective GCEO & C-Level Tier 1 Tier 2 Tier 3 Tier 4

Process • No Of Inter Opco

And Growth Tm Compentency • Opco Compliance Competency % Competency % Competency %

2.1 PERFORMANCE MANAGEMENT

Performance management is a set of measurable criteria and methodology to enable

MAPS focus in 4 Key Perspectives Measurement:

2.1.1 PERFOMANCE SYSTEM

PERFOMANCE SYSTEM – EXECUTIVES

PERFOMANCE SYSTEM - EXECUTIVES

PERFOMANCE SYSTEM – NON EXECUTIVES

2.2 PERFORMANCE MEASUREMENT

Four Process of Performance Measurement:

1. Clarify and tranSLAte the organization's vision into strategy.

Consequently, Norton and Kaplan introduced a new performance measurement

Figure 3.1 :The Balanced Score Card

The balanced Scorecard is a management system that enables organizations to clarify

The Balanced Scorecard is basically a strategy management and implementation system

Figure 3.2 : Strategy Map

Crucially, the Strategy Map and accompanying scorecard is a hypothesis. It is

3.2 5 Principles of Strategy Focused Organizaton.

To understand and implement the Balanced Scorecard Management System, we first

The balanced scorecard methodology builds on some key concepts of previous

A balanced scorecard looks at your organization from four different perspectives to

How do we look to shareholders? (Financial perspective)

How do customers see us? (Customer perspective)

What must we excel at? (Internal perspective)

Can we continue to improve and create value? Innovation and Learning

Figure 3.3 The 4 Perpectives in BSC

The detail eloboration on the 4 perspectives are as follows :

1. The Financial Perspective

There is perhaps a need to include additional financial-related data, such as risk

2. The Customer Perspective

Recent management philosophy has shown an increasing realization of the importance

In developing metrics for satisfaction, customers should be analyzed in terms of kinds of

3. The Business Process Perspective

4. The Learning and Growth Perspective

3.3 Balanced Score Card in TM

Balanced scorecard used as a strategy implementation tool to assist TM in achieving its

Figure 3.4 : Generic Deliverables in BSC

Figure 3.5 Financial Perspective

Figure 3.6 Customer Perspective

Figure 3.7 Internal Business Perspective

Figure 3.8 Organization Learning and Growth Perspective

The four perspectives in a well-designed balanced scorecard form a chain of cause-and-

In addition, balanced scorecard system need to be updated constantly. This update is

Lastly, lack of integration and communication of the objectives of the organization at

as a management approach of an organization that centered on quality with participation