A balanced score card is a framework that is used in strategic planning of organizations and management of performance. It is used in businesses, organizations, government and non-governmental agencies and other institutions to align daily activities with their goals, vision, and mission (Ting, 2011). In addition, it is used to reinforce proper conduct in an organization. This tool is used in tracking both financial and non-financial indicators to establish the extent to which an organization/business is performing as expected and when correction is required (Ting, 2011).
The management use a balanced score card to provide a more extensive perspective by complementing metrics such as client satisfaction with financial indicators.
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A balanced score card is linked to the effectiveness of an organization and individual/performance evaluation too. A balanced perspective to the performance of an individual is an effective means of a complete insight into the person’s work performance. By applying balanced measures and disseminating the outcomes to managers, supervisors, workers etc., the information required to align the performance of an employee with the goals, vision and mission of the organization is provided (Kamakoty, 2018). Norton and Kaplan propose that managers should collect information from four different crucial perspectives. These perspectives include customers, internal business, innovation and learning, and financial perspectives. By doing so, the information gathered helps in managing the organization and providing direction.
When balanced measures are used in evaluating employee performance, the individual’s performance picture is presented in a complete and comprehensive manner. When both internal and process indicators are balanced with outcomes, the management create a picture that is complete and when they realize the areas to make improvements, the effectiveness of the organization is ensured (Kamakoty, 2011). The complexity associated with management requires that performance is viewed from different perspectives at the same time and a balanced scorecard gives that important information.
Reference
Kamakoty, J. (2018). A Balanced Score Card Approach to Performance Measurement of Firms. Industrial Engineering Journal,11 (5). doi:10.26488/iej.11.5.1061
Ting, W. (2011). Applying the balanced score card in the team strategic performance management. 2011 2nd International Conference on Artificial Intelligence, Management Science and Electronic Commerce (AIMSEC) . doi:10.1109/aimsec.2011.6010534
