When an organization implements any management control tool, the cost/benefit balance is vital. The decision to deploy a scorecard system requires the same analysis. The costs of implementing a new tool are relatively easy to appraise, but often, there's a lack of reliable information about the benefits. This article explores the extent to which organizations have realized significant benefits from using a scorecard system. (We use the term "scorecard system" to include both the scorecard as a control tool and the process, or technique, of integrating the scorecard system into the overall performance-achievement cycle of the firm.)
Over 150 service, manufacturing, and government organizations have responded to an on-line scorecard survey sponsored by the AICPA, CAM-I, CMA Canada, IQPC, Targus Corporation, and Hyperion (http://graziadio.pepperdine.edu/shaps). This article is the first in a series focusing on key themes from our findings. Almost two-thirds of the survey respondents agreed that significant benefits had been realized from using a scorecard system.
During the data analysis, respondents were divided into two groups: those that reported significant benefits from scorecard implementation (the "significant benefits group," hereafter SBG) and those that reported no significant benefits (the "no significant benefits group," hereafter NSBG).
Organizations can maximize the benefit they receive from a scorecard implementation by following the recommendations provided below. These recommendations also provide a gauge by which to appraise existing scorecard systems.
Impetus for Scorecard
Aligning employee behaviour with organizational goals and communicating strategy throughout the organization are important objectives of the scorecard system. The SBG unanimously set these reasons as a top priority, whereas only 39% of the NSBG cited these as objectives for implementing a scorecard system. A typical comment of the respondents was, "Perhaps the best benefits have been a disciplined approach to agreeing on what is most important to the organization and developing consensus on how to measure it."
Thus, a careful appraisal should be made of the reasons your organization is considering a scorecard system. Organizations that have had difficulty communicating strategy and aligning behaviour should realize significant...
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...gnment with objectives) can only be answered by analyzing the activities that are needed to attain objectives." Thus, it may not make much sense to deploy a scorecard system that relies on inaccurate cost data.
It's important to evaluate the overall cost accounting system before making the decision to deploy a scorecard system. The benefits achieved will be greater if the costing system is highly accurate. It would be wise to consider deploying both systems simultaneously if resources permit.
Based on the findings reported above, we have developed a short questionnaire shown in Table 1 that can be used as an assessment tool. The attributes listed in Table 1 can be thought of as key value drivers for this management control tool. If any check marks are in the shaded boxes or if the total score is greater than 15, we highly recommend a careful review of the factors in question. While there are other factors that play a role in the successful deployment of a scorecard system, from our findings, these appear to be the most significant. Indeed, our findings strongly suggest that the absence of these drivers may result in an unsuccessful experience with the scorecard system.
‘Though it is intricate to demonstrably prove in quantitative terms that the balanced scorecard can deliver efficiency improvements at the start of its implementation, it can be shown in quantitative terms that a well designed fully cascaded balanced scorecard system should address the needs of a health care system. ’ (Radnor and Lovell, 2003, p. 105)
measures" (Ball, Harbor, Moore, Verlaan-Cole, 2003). The balanced scorecard is organized into four perspectives: financial, customer,internal processes and learning and growth" (Ball, 2003).
Balanced scorecards are a tool a nurse leader can use in strategic planning to assess how the organization is meeting its strategic goals and objectives. It allows for a well-rounded analysis of four different metrics: fiscal measures, customers, processes and learning and growth (Marquis & Huston, 2015). The intention of a balanced scorecard is to help “organizations set strategic goals, allocate resources, set priorities for process tasks (operations), and evaluate progress and strategy effectiveness” (Sare & Ogilvie, 2010, p. 158). Appendix A outlines the balanced scorecard for this planned change.
The performance assessment and appraisal forms are crucial within the performance management system (Aguinis, 2014). However, the appraisal form within the case study provided is designed for the supervisor’s use thus missing one vital factor throughout the entire process, employee participation. Thus, questioning the validity and reliability of the process. This is especially concerning as the bottom 10 per cent of employees are being fired and the top 20 per cent are being rewarded with $5,000.00 based on what their supervisor records on the form without consultation with employees. Thus, supervisors may not provide accurate scores as they do not have to justify their responses (Aguinis,
In the mid 1980s, and into the 1990s, business leaders realized that a renewed focus on quality was required to continue to compete in an expanding global market. (NIST, 2010) Consequently, several strategic frameworks were developed for managing, and measuring organizational performance. Among them were the Malcomb Baldrige National Quality Award, which was created by and act of congress and signed into law by the President in 1987, and The Balanced Scorecard, which is a performance management tool that was born out of research conducted in the late 1980s and early 1990s by Robert S. Kaplan, and David P. Norton published in 1996 (Kaplan, 1996). Initially the renewed emphasis on quality management systems was a reaction to the LEAN approach
The Balanced Scorecard is a management tool used for strategic planning in business and industries to align activities with a vision and strategy. The tool is used in the organizational setting to improve communications (USAID,
These are very sensible goals indeed. Even though the company is profitable, implementing a new, activity-based cost accounting system will allow the company to improve its margins and become even more focused and competitive in the future.
The notion of the Balanced Scorecard was described as "a framework for multi- dimensional performance evaluation and performance management." This framew...
A Balanced Scorecard can be defined as a “performance management tool which began as a concept for measuring whether the smaller-scale operational activities of a company are aligned with its larger-scale objectives in terms of vision and strategy” (Wikipedia 2009, ¶ 1). Scents & Things will need to develop a balanced scorecard that will assist in meeting and help define the company’s values, mission, vision, and SWOT analysis. The balance scorecard is made up of four perspectives; financial, customer, learning and growing, and internal process. This paper will define each of the four perspectives objectives, performance measures, targets, and initiatives. The paper will also show how the perspectives relate to Scents & Things vision, mission, values, and SWOTT analysis.
The Balanced Scorecard has emerged in recent years as a performance measurement system in various organizations. This paper will discuss the origin and concept of the balanced scorecard and how it was first implemented. We will then review the criticisms on the balanced scorecard methodology as well as analyse the strengths and weaknesses of this performance measurement tool.
Performance management is a useful and powerful tool that can be used by managers to identify what areas of their organisation they need to improve to increase the organisation’s overall performance. The idea of a balanced scorecard enforces a sensible distribution of resources and effort across all aspect of performance an organisation is, or should be, concerned with.
These benefits are best discovered and maximized if used in conjunction with KPIs. A KPI is a key performance indicator and they allow a company to measure and manage ...
There are several reasons organizations initiate performance evaluations, however the standard purpose for performance evaluations is to discuss performance expectations; not only from the employers perspective but to engage in a formal collaboration where the employee and the manager are both able to provide feedback in a formal discourse. There are many different processes an organization should follow when developing its performance evaluation tool; in addition essential characteristics that must accompany an effective performance appraisal process. I will discuss in detail the intent of a performance evaluation, the process an organization should follow in using its performance evaluation tool, along with the characteristics of an effective
Punniyamoorthy, M. & Murali, R. 2008, "Balanced score for the balanced scorecard: a benchmarking tool", Benchmarking, vol. 15, no. 4, pp. 420-443. Emerald, Direct [Accessed 10th February 2014]
The following essay aims to analyse in depth a computerised accounting system and its aspects such as its history, what technologies is based on, and how it has developed since its beginning. Other aspects such as the current state of the system and the interactions with other systems and the future of the system will also be covered in this paper.