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I want to know the concept of balanced score card. It’s use and how it is created. Please help

The Balance Scorecard is a Vision Report Card.

The balanced scorecard is part of the management

system, which enables a company to correlate key performance

indicators to the firm’s goals. These goals, in

new terminology, are the vision and the mission. The

scorecard accomplishes seven main objectives in today’s

business environment:

1. Translates the vision, mission, and strategies.

2. Defines and aligns objectives and measurements.

3. Communicates the objects and measures.

4. Aligns strategic initiatives.

5. Aligns people.

6. Aligns compensation with performance.

7. Provides feedback on strategy.

The balanced scorecard translates the vision, mission,

and strategies into four or five basic categories that can-not be conflicting: financial, customer, internal business

process, employee (learning and knowledge), and/or

innovation. The result is a Vision Report Card. Each

category contains a mission to accomplish.


How do we want our stakeholders to view us?

Kaplan and Norton do not dismiss the old-style management

need for financial data. This type of data will

always be a priority, and most managers will do whatever

possible to accomplish the task. As network systems grow,

data can be centralized and automated to create timely

and accurate reports. The financial goals, however, cannot

be attained at the sacrifice of the other categories.


How do we want our customers to view us?

The importance of customers comes down to basic

need because without them we have no business. Thus,

customer service and satisfaction should be the forefront

of all indicators. After all, if customers are not satisfied,

they will find someone else to supply the service

or product.

Internal business process: What are the processes at

which we should excel?

This category allows a manager to know how the

operation is running. Aligned with the first two, it

shows the production efficiency, quality levels, etc., in

relation to what the customer wants and expects. These

processes can be split into two units—production (service)

processing and support processing. Support processing,

such as maintenance (internal and external),

engineering, quality, etc., can be rated by many variables

similar to those in the service industry.


How do we support, satisfy, and develop our

employees into excellence?

A company’s most valuable resource is its people.

Therefore, just like equipment, people need maintenance

and improvement, which includes training, retraining,

evaluations, and so forth. In the current

technological explosion, it is imperative that workers

are in a continuous learning mode. Measurement metrics

guide managers in focusing training funds to the

most important areas. Kaplan and Norton emphasize,

“Learning is more than training,” and include mentors,

tutors, and coaches leading workers within the organization,

easing the process, and improving communications

to readily improve problem solving and decision



How can we continue to improve our

processes to create value?

Continuous improvement of our people, processes,

and systems are vital to the long-term success of our

business because what happens today may not be

enough for tomorrow. Each of these metrics needs to be

referenced back to the first four categories, and, as

innovation happens, change occurs in performance. If

the continuous improvement metrics are not utilized,

employees may believe that the goals set are the highest

attainable, so long-term failure is inevitable.

Please check the following link for presentation.


In caseany doubts arise please feel free to revert.



Hi guys,

That is a technical way of looking at the scorecard. In simple terms i like to describe it as a performance management tool that seeks to align typical business objectives with contributions from Board, MD to as low as the security guard.

The elements are as presented by the first respondent and the presented reading is rewarding.

The organization must be ready for such a move because it requires a huge change in paradigm and management must be ready to see their deliverables written to the barest expectations on a daily to weekly basis which will then form their performance appraisal.

It is an elaborate strategy attainment map that ensures that all efforts are geared towards attaining the set corporate objectives.

Principally it introduces the argument that the typical financial targets that organizations measure themselves by do not suffice because you can hit those targets but close down in 5yrs. it argues that you should have more corporate targets that focus on other aspects of the business critical enough to cause deep problems at a later date.

Also try google for more presentations on the scorecard but be certain to note that if the organization is disciplined its a sure way of monitoring performance organization wide.

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