Balance Score Card

A performance appraisal technique.

 Introduction

 With increased international competition and focus on

stewardship for both profit and non-profit organizations, there
is an increased need to understand and effectively evaluate
the performance of the organization and the effectiveness of
implementing strategies.
 Performance measurement systems must achieve a balance,
which supports progress against predetermined objectives,
without sub-optimization.
 Concept of the Balanced Scorecard

 The BSC complements financial measures of past performance with

measures of the drivers of future performance. The objective and
measures of the score card are derived from an organization’s vision
and strategy. The BSC shows how to link the organizational vision to
critical success factors or outcomes and key performance indicators,
representing all perspective of the business. This compels the senior
management team to operate as a unified team, balancing competing
objectives to achieve the optimum result for the organization as a
whole.
Four pillars of the BSC- the perspectives

Vision,
mission&
strategy
 Barriers in implementing strategy:
1. Vision Barrier –

No one in the organization understands the strategies of the organization.

2. People Barrier –

Most people have objectives that are not linked to the strategy of the organization.

3. Resource Barrier –

Time, energy, and money are not allocated to those things that are critical to the organization. For

example, budgets are not linked to strategy, resulting in wasted resources.

4. Management Barrier –

Management spends too little time on strategy and too much time on short-term tactical decision-making.
 
 Barriers in implementing strategy:

Only 10% of organization

execute their strategy
Barriers to strategy Execution Management barriers
People barriers 85% of executive teams
Vision Barrier Only 25% of spends less than one Resources Barriers
Only 5% of the workforce 60% of organization don’t
managers have hour per month
understand the strategy. link budget to strategy.
discussing strategy.
incentive linked