Performance Management Systems and the Balanced Score Card

Performance Management Systems and the Balanced Score Card

What is performance management?

Performance management refers to an ongoing procedure of communication amongst an administrator and workers that happens the whole year, in support of achieving the strategic organizational goals (Van Dooren, Bouckaert and Halligan, 2010). The process of communication is such as goal setting, clarifying potentials, giving feedbacks, revising results, and recognizing objectives.

What is the Balanced Scorecard?

A balanced scorecard refers to a performance measurement tool that incorporates economic and non-economic measures (Kaplan and Norton, 1996). It is fundamental to companies as it includes their performance procedures with strategic goals. It enables business analysis concerning its outcomes, organizational abilities, and their processes. The balanced scorecard assists an industry know about their clients as well as their standards. Furthermore, it is a procedure that is crucial to the firms as they highlight and concentration its strength to accomplish both their long and short term objectives.

• Why is Balance Scorecard different from traditional performance management systems?

At some point, each industry requires examining its performance. Performance measures are technologies that are utilized to exam economic and non-economic business aspects. They are crucial to explore the industry’s distribution of resources, budgeting, and targets (Nørreklit 2003, p.591). The outcomes of these measures are utilized to control and observe the company’s performance in all business areas. There are differences between the balanced scorecard and traditional performance measurement systems.

A balanced scorecard focuses on assimilating both the economic and non-economic performance procedures to evaluate the long and short-run performance in a single report. On the other hand, the measurement of traditional performance systems entails company economic goals (Nørreklit 2003, p.592). This explains that there exists logic in the balanced scorecard, which will not be located on the traditional performance measurement methods because they are only interests in economic procedures in the short-term (Nørreklit 2003, p.592).

Traditional performance measurement strategies emphasize enhancing and observing the existence of business procedures. The only period to go further economic systems is the time they try to integrate metrics that are equal and time-based. Therefore, they might be recognized in emphasizing developing current business procedures (Nørreklit 2003, p.594). In contrast, the balanced scorecard is interested and introducing different processes that the enterprise might employ in a bid in meeting its consumer’s needs and the company’s fiscal concerns.

Although the balanced scorecard takes present and upcoming modernizations and efforts to combine them within the perception of the inside business procedure, while traditional measurement methods focus on delivering prompt services and products to existing clients with no upcoming procedures integration (Nørreklit 2003, p.594). These methods signify crucial formation in the short wave that starts with a consumer’s receipt of order, and this method finishes with products being transported to the clients. Therefore, this wave standard results from preventing and advancing the already current business procedures.

Suggest how your organization can apply the Balanced Score Card Framework to improve organizational performance?

Balanced Scorecard plays a significant role in the industry as it is a management system that supports the firm’s management in leading significant processes and to be more competitive in the marketplace. Balanced Scorecard is a planned development and performance administration method which is utilized in business to support the firm’s activities to the revelation and undertaking of the industry (Kaplan & Norton, 1996).

Furthermore, the scorecard protects against sub-optimization, let the firm’s managers deliberate all the significant company activities’ processes as a whole, and see clearly whether the improvement of a single place might have been achieved at the expense of another until the goals can be attained. For example, to reduce the time-consuming in resolving customer feedback, the firm uses the E-form to capture customer’s feedback (Kaplan & Norton, 2005).

Balanced scorecard also is a planned organization contrast tool that indicates the present performance of the firm and additional capacity to play in the assured marketplace. It evaluates the company’s general performance, associates it with various players in the same industry in the market, and shows the location of the sector (Kaplan & Norton, 2005). Through the balanced scorecard, the firm can know which segment should want to form more value and participate with the participants. For instance, the firm might give “Pet Hotel” to differentiate the service provided with its’ competitors and create a new customer base to increase its’ competitive (Kaplan & Norton, 2005). In short, the leader might make use of the Balanced Scorecard to consider consumer preservation, product improvement cycle times, and worker gratification in a balanced manner and enhanced the firm’s performance and competitiveness.