What is a balanced scorecard in performance management?
What is the Balanced Scorecard?The Balanced Scorecard is a Performance Management System that seeks to measure the effectiveness of operations and provide feedback to organizations on how well the internal procedures of the business are affecting its performance. Show
The Balanced Scorecard was developed in the early 1990s by Robert Kaplan and David Norton. It expands upon the Management by Objective model by providing a framework for translating the company's mission, strategy, and values into quantifiable, measurable goals, and objectives. Back to: BUSINESS MANAGEMENT Back to: STRATEGY & PLANNING
Dimensions of the Balanced ScorecardThe Business Scorecard analyzes the organization based upon four criteria:
Implementing the Balanced ScorecardThe first step in implementing the balanced scorecard is that any higher-level goal is categorized within these dimensions. Then, the manager would create a strategy map that links the goal to other dimensions of the scorecard. Next, the relevant managers will develop objectives that further the goals and metrics for assessing progress in achieving the objective. This will include identifying specific tactics that can be employed in carrying out these objectives. Collectively this makes up the strategic plan. Finally, the manager assigns tasks to employees to implement the strategic plan. Effects of the Balanced ScorecardThis framework allows managers to continuously monitor employee performance and to make immediate corrections when necessary. Lower-level objectives and performance measures are tied closely to individual employee performance. This is also employees by providing the information necessary for making autonomous decisions. Managers carry on their core functions. Financial goals are translated into unit-level budgets and production goals. It also seeks to assess performance beyond purely financial goals and objectives to focus on goals and objectives that further the company's strategy. Strategy Related Topics
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Strate What are the 4 perspectives of a balanced scorecard?Four Perspectives of the Balanced Scorecard. Financial perspective. ... . Customer perspective. ... . Internal business processes perspective. ... . Organizational capacity perspective.. What is balanced scorecard with example?Therefore, an example of Balanced Scorecard description can be defined as follows: A tool for monitoring the strategic decisions taken by the company based on indicators previously established and that should permeate through at least four aspects – financial, customer, internal processes and learning & growth.
Why is it called a balanced scorecard?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. The concept of balanced scorecard has evolved beyond the simple use of perspectives and it is now a holistic system for managing strategy.
What is the objective of balanced scorecard?To ensure long-term flexibility and survival, an organization needs to prepare for the future. The balanced scorecard managing system “maps an organization's strategic objectives into performance metrics in four perspectives: financial, internal processes, customers and learning and growth,” reports NetMBA.
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