“Balance Score Card”

What is the Balance Score card?

The Balanced Scorecard is a strategic measurement system for implementing organizational strategy, monitoring performance, and achieving organizational objectives. It provides a balanced four-dimensional view of the business, with each perspective consisting of financial, customer, internal process, and learning. It is an integrated approach that helps organizations set goals, measure progress, and link strategy to financial results by connecting multiple facets of the organization to a higher-level strategy.

Features of Balanced Score card

The Balanced Scorecard has four distinct features:

• Financial Perspective: This refers to the financial objectives set by the organization, including but not limited to operating income, return on equity, and earnings per share.
• Customer Perspective: This is how customers perceive the organization such as cost, quality, and service.
• Internal Process Perspective: This focuses on how the organization strives for excellence by ensuring the processes within it remain efficient and effective such as innovativeness, employee satisfaction, and process cycles.
• Learning and Growth Perspective: This encompasses how well the organization invests in the development of its people and their activities in order to create a dynamic and competitive environment.

Advantages of Using a Balance Score card

The Balance Scorecard is an effective tool for organizations to meet their goals and objectives. Its advantages include:

• It helps prioritize and track strategies across multiple areas.
• It can increase employee motivation and engagement.
• It provides data-driven performance measurements.
• It improves communication between departments.
• It encourages risk-taking and innovation.
• It helps organizations move beyond relying solely on financial performance.

FAQs

Can a balanced score card be tailored for different departments?

Yes, the Balanced Scorecard can be tailored for different departments. By identifying the key performance indicators and objectives for each department, the Balanced Scorecard can be used to measure progress and success.

How does a balanced score card align with strategic goals?

The Balanced Scorecard provides a framework for measuring and tracking progress towards strategic goals. It rewards employees for achieving their objectives and identifies which strategies are and are not working. By providing a clearer picture, it can help an organization stay on the path to meeting its goals.