A balanced scorecard is a fundamental tool because it gives an organization realistic, workable and achievable goals to enable it to reach its targets. This tool clearly acknowledges that the company has a sense of responsibility to diverse investor assemblies, which include workers, contractors, clients, community and stockholders. Valmohammadi and Ahmadi (2015) state that k ey performance indicators (KPI) are extremely vital in improving operations of a business because they help us to know if a business is achieving its strategic goals.
The four components of a balanced scorecard include; Financial, innovation, clients and internal processes. The financial component of a balanced scorecard could make use of the income KPI to establish if the company is really achieving its goals. Like in this case when a company is acquiring a good margin in terms of income, then this is a good way to show that the company is doing very well. In the case of the customer perspective of the balanced scorecard, the most applicable KPI here would be the customer satisfaction which is achieved through feedback acquired ( Kenny and Bourne, 2015). Looking at what the customer says, in the end, would be a good way to know the performance of the company. When and if a company is innovative it means that they are able to study the needs of their clientele and connect with the upcoming technology to know what fits their clients best. The most ideal KPI for this component of the balanced scorecard is employee retention because to will only retain clients you satisfy. Last but not least, the internal processes component can be measured perfectly by the material turn over KPI. Knowing the material turnover makes the company to know if the internal systems that have been put to place are efficient or not ( Kenny and Bourne, 2015).
Delegate your assignment to our experts and they will do the rest.
Look at it this way, using the balanced scorecard as well as their respective KPIs are perfect parameters for the purpose of making a business to establish how well or badly it is doing.
References
Kenny, G., & Bourne, M. (2015). Performance Measurement. Wiley Encyclopedia of Management , 1-3.
Valmohammadi, C., & Ahmadi, M. (2015). The impact of knowledge management practices on organizational performance: A balanced scorecard approach. Journal of Enterprise Information Management , 28 (1), 131-159.
