Balance score card • Level of Importance)

• Satisfaction Distribution (% of each area scored)

• Developed by Harvard Professors Robert Kaplan and David
Norton in early nineties 1. Internal Perspective
• The logic of BS is improve their internal processes (product
development, service etc.) which are critical for creating customer To satisfy our customers, in which business processes must we
satisfaction and loyalty excel?
• BS enables to translate broad corporate goals into divisional,
departmental and team goals in a cascading fashion which helps Possible Performance Measures
an individual to see clearly how his performance ties with overall
• Cycle Time
performance of the firm.
• Workload and Employee Utilization
Definition: • Transactions per employee
• Errors or Rework
At the highest level, the Balanced Scorecard is a framework that 1. Learning and Growth
helps organizations translate strategy into operational objectives
that drive both behavior and performance. To achieve our goals and accomplish core activities, how must we
learn, communicate and work together?
Importance
Possible Performance Measures
• To achieve strategic objectives.
• Employee Satisfaction
• To provide quality with fewer resources.
• Retention and Turnover
• To eliminate non-value added efforts.
• Training Hours and Resources
• To align customer priorities and expectations with the customer. • Technology Investment
• To track progress.
• To evaluate process changes. Advantages of Balanced Score Card
• To continually improve.
• It translates vision and strategy into action.
• To increase accountability
• It defines the strategic linkages to integrate performance across
STEPS FOR BALANCED SCORE DEVELOPMENT organizations.
• It communicates the objectives and measures to a business unit.
• Assessment of vision, mission and values of the organization. • It aligns the strategic initiatives in order to attain the long-term
• Strategy –Customer values, strategic themes and strategic results. goals.
• Objectives- Strategy elements • It aligns everyone within an organization so that all employees
• Strategic Maps- Objectives are linked understand how they support the strategy.
• Performance Measures- Targets and baselines • It provides a basis for compensation for performance.
• Projects • The scorecard provides a feedback to the senior management if the
• Application and Automation- Knowledge sharing and strategy is working.
performance measurement software. • Focusing the whole organization on the few key things needed to
• Cascade- Business units and Support units create breakthrough performance.
• Evaluation- Performance results and Revise strategy • Helps to integrate various corporate programs. Such as: quality,
re-engineering, and customer service initiatives.
THE FOUR PERSPECTIVES
• Breaking down strategic measures towards lower levels, so that
unit managers, operators, and employees can see what's required
Kaplan and Norton have surveyed several companies to create a
at their level to achieve excellent overall performance.
model of a balanced scorecard

1. Financial Perspective
Disadvantages of Balanced Score Card
To satisfy our constituents, what financial and regulatory
• It is not easy to implement this tool because it involves a lot of
objectives must we accomplish?
subjectivity.
Possible Performance Measures • The tool is much more complex compared to the other tools
• The measures that need to be taken are contingent upon the kind
• Cost / Unit of environment, industry and the business the organization is in.
• Unfunded Requirements or Projects
• A lot of refinement is still required to be done so that it becomes
• Cost of Service
understandable to every stakeholder associated with the
• Budget Projections and Targets
organization.
1. Customer Perspective

Possible Performance Measures

• Customer Satisfaction (Average)

• Satisfaction Gap Analysis (Satisfaction vs.