Balanced Scorecard Performance Measurement

Using a balanced scorecard approach to measure performance.

Balanced scorecard performance measurement. Using a balanced scorecard as a performance management tool. A positive outcome of using a balanced scorecard is that it makes performance in multiple areas readily observable when you take all aspects of a job into consideration you can see what areas are strong and what areas are weak. Key performance indicators kpis are commonly used to help companies effectively manage and guide their progress. Here is an example of balance scorecard developed for e commerce organization.

The e commerce business is reaching new high now in the market. It was first introduced in 1992 by david norton and. A more descriptive balanced scorecard is displayed in exhibit. The balanced scorecard is the closest management tool to a crystal ball as you will find.

Take the case of blue frog for example where we were able to use accounting kpis to help quadruple the company s profits the whole concept of key performance indicators and a balanced scorecard is to align workers performance with the long term strategic objectives of the. The e commerce organization can use the balance scorecard to improve the performance and make customer satisfied. A balanced scorecard is a performance metric used to identify improve and control a business s various functions and resulting outcomes. The balanced scorecard uses financial performance measures such as net income and return on investment because all for profit organisations use them.

The balanced scorecard was originally developed by dr. You not only need to know today s performance and measures and predict tomorrow s performance but you need to be able to demonstrate how your spending on strategic projects today will help you improve your impact in the future. The balanced scorecard requires specific measures of what customers get in terms of time quality performance and service and cost. Traditionally many federal agencies have measured their organizational performance by focusing on internal or process performance looking at factors such as the number of full time equivalents fte allotted the number of programs controlled by the agency or the size of the budget for the fiscal year.

Robert kaplan of harvard university and dr. 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. Give balanced scorecard industry practice example in performance measurement. These four perspectives have been briefly discussed below.