Table of Contents
2.0 Overview of the Balanced Scorecard (BSC)
3.0 Using of Balanced Scorecard.
3.0 Balanced Scorecard: a perfect approach for the management of performance.
A balance Scorecard (BCS) is a method to measure business performance. This is an automation method that provides semi-standard structured reports. Managers in business use this method to record and track staff activities to support the managers to monitor, review and control employee performance. This paper discusses the balanced scorecards as a performance measurement tool and their usages in the business organization.
2.0 Overview of the Balanced Scorecard (BSC)
Experts define the “Balanced Scorecard” in different ways. Kaplan (2015) said Balanced Scorecard is a retained traditional financial measure. Hoffecker (2014) defined the Balanced Scorecard as the strategic method used by managers in the business to measure staff performance and gain balance in the progression of organizational goals and objectives. However, Kaplan (2015) argued that the Balanced Scorecard is not an effective method for long-term capabilities and customer relationships. In addition, this method cannot provide information about suppliers and customers, employee process, creativity and innovation, investment policy and technology used in the business. This method mainly focuses on four key business areas that are internal business process, financial issue, learning and growth, and customers. The overview of the Balanced Scorecard is outlined as the diagram below:
3.0 Using of Balanced Scorecard
Kaplon and Norton (2016) stated that a Balanced Scorecard is an effective strategic management technique that is applied to measure business and staff performance. However, this method is still now a new concept in many organizations. Kaplan (2015) said this strategy is effective to turn the strategy into action in business and increase business growth. In another word, the Balanced Scorecard follows effective and actionable theory to can turn the business mission and strategies into performance measures. The Balanced Scorecard can also provide structure for strategic management in the case of performance measurement. Booth (2016) believes the Balanced Scorecard will contribute a lot in future business because this tool supports the business gain organizational goals and objectives. Hoffecker (2014) said Balanced Scorecard is an innovative and creative way that can provide complicated and scrutiny solutions for business. Kurtzman (2013) stated that a Balanced Scorecard can support a business’s internal management process that leads to organizational success.
The main advantages of this method are it increase business communication and performance, aligns business strategies with activities. According to Brain (2015), 75% of global businesses use the Balanced Scorecard as strategic planning and management system. This method also aligns business vision, mission, and organizational goals with the business strategies and turns into daily base business activities. Booth (2016) said the Balanced Scorecard increase employee attention; therefore, it measures staff performance. In addition, this method provides a common language for supporting managers to communicate with their followers effectively. In a word, the Balanced Scorecard can be effectively used for performance measurement. However, Brain (2015) suggested the managers use the Balanced Scorecard properly and appropriately. In addition, managers must verify the data come through the Balanced Scorecard. Hart (2015) suggested defining balanced scorecard objectives along with business objectives before using the Balanced Scorecard to measure business and employee performance. If the managers fail to define the goals and objectives of the balanced scorecard, managers will fail to gain organizational goals.
3.0 Balanced Scorecard: a perfect approach for the management of performance
Balanced Scorecard is widely recognized as the effective performance measurement method in global business organizations. According to Anthony (2015), lots of performance measurement tools have been developed over time and successfully applying by managers to measure business performance. In comparison to many of the traditional performance measurement tools, the Balanced Scorecard is a quite new innovation. Therefore, many organizations are still now in dilemma about the performance of Balanced Scorecard as a measurement tool. However, many of the traditional performance measurement tools fail to offer expected solutions or outcomes to the business managers. Thus, managers are now more dependent on the Balanced Scorecard than ever before to overcome the limitations of the traditional performance measurement tools. Kaplan and Norton (2016) considered the Balanced Scorecard as the modern, creative and innovative financial and accounting measurement tool. Brain (2015) considered the Balanced Scorecard as the innovative and creative strategic management and performance measurement tool. This is because this method can measure both intangible and soft factors that were recognized as immeasurable issues before in business. Hart (2015) claimed that a Balanced Scorecard can balance short-term and long-term business objectives, financial and non-financial measures, internal and external business performance, and leading and lagging indicators.
Hoffecker (2014) said Balanced Scorecard is now recognized as the proven effective management system and innovative measurement system. Kaplan and Norton (2016) revealed that many businesses are now using the Balanced Scorecard as a research methodology. Businesses are now using this method for depth qualitative research and to ensure data integrity (Brain, 2015). Kaplan (2015) said Balanced Scorecard and its effective application by business managers can provide better staff performance and support in making appropriate business decisions. Brain (2015) believed this method assists the managers to make decisions related to employee performance management by comparing other areas of businesses. Overall, the Balanced Scorecard is an innovative and creative method that support the managers to measure organizational performance, employee performance, and make an appropriate and suitable business decision, and to develop effective strategies for business (Booth, 2016).
The finding of this paper discloses that the Balanced Scorecard is now a proven effective performance measurement method that can provide universal solutions for businesses. The finding of this paper also shows that many of the traditional performance measurement tools fail to provide effective solutions for particular issues, whereas the Balanced Scorecard provides better solutions in comparison to the traditional performance measurement tools. Balanced Scorecard is now widely recognized as an effective tool to linage better management and business performance. This is because four key features of the Balanced Scorecard support the managers to maintain linage between performance management and business problems. In a word, the Balanced Scorecard is an effectively new and innovative tool to measure employee and overall business performance effectively and efficiently. However, managers should use the Balanced Scorecard properly and appropriately. In addition, managers must verify the data come through the Balanced Scorecard. The manager should also define balanced scorecard objectives along with business objectives before using the Balanced Scorecard to measure business and employee performance.