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Hi venkatesh,
Topic dealt in simple, Detailed manner..
very infromative. thanks for sharing
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What Is Balance Score Card
Type: HR, Report if not a HR topic
Posted 27-09-2008Reply
Is there any one from vizag to discuss the topic Balance Score Card.
"Balance Score Card" or "Balanced Score Card" is a concept where the Strategic management and Measurement System links strategic objectives to comprehensive indicators. Few companies tend to attach importance just to a few measurements, the balanced scorecard focuses management attention on a range of key performance indicators in an attempt to provide a balanced view.
The concept of "Balanced Score Card" was developed by two Americans, David Norton, co-founder of consulting company Renaissance Solutions, and Robert Kaplan, from Harvard Business School. Kaplan and Norton suggest that four elements need to be balanced:
The Customer Perspective (companies need to ascertain how customers perceive them);
The Internal Perspective (companies need to know those things at which they must excel);
The Innovation And Learning Perspective (how companies can improve and create value); and
The Financial Perspective (how companies are perceived by their shareholders).
The concept of "Balanced Score Card" was developed by two Americans, David Norton, co-founder of consulting company Renaissance Solutions, and Robert Kaplan, from Harvard Business School. Kaplan and Norton suggest that four elements need to be balanced:
The Customer Perspective (companies need to ascertain how customers perceive them);
The Internal Perspective (companies need to know those things at which they must excel);
The Innovation And Learning Perspective (how companies can improve and create value); and
The Financial Perspective (how companies are perceived by their shareholders).
its nothing but... a mutual goal...and target.. which is distributed through and by the higher officials... to the Managers... Team leads... team members....
each of them will have their own level of targets to be achieved....
each individual will have his own goal...in view of the main target of the Co.
hence, all teams together will aim and reach for the main GOAL by their own ways and means.....
each of them will have their own level of targets to be achieved....
each individual will have his own goal...in view of the main target of the Co.
hence, all teams together will aim and reach for the main GOAL by their own ways and means.....
Description
A Balanced Scorecard defines what management means by "performance" and measures whether management is achieving desired results. The Balanced Scorecard translates Mission and Vision Statements into a comprehensive set of objectives and performance measures that can be quantified and appraised. These measures typically include the following categories of performance:
• Financial performance (revenues, earnings, return on capital, cash flow);
• Customer value performance (market share, customer satisfaction measures, customer loyalty);
• Internal business process performance (productivity rates, quality measures, timeliness);
• Innovation performance (percent of revenue from new products, employee suggestions, rate of improvement index);
• Employee performance (morale, knowledge, turnover, use of best demonstrated practices).
Methodology
To construct and implement a Balanced Scorecard, managers should:
• Articulate the business’s vision and strategy;
• Identify the performance categories that best link the business’s vision and strategy to its results (e.g., financial performance, operations, innovation, employee performance);
• Establish objectives that support the business’s vision and strategy;
• Develop effective measures and meaningful standards, establishing both short-term milestones and long-term targets;
• Ensure company-wide acceptance of the measures;
• Create appropriate budgeting, tracking, communication, and reward systems;
• Collect and analyze performance data and compare actual results with desired performance;
• Take action to close unfavorable gaps.
Common uses
A Balanced Scorecard is used to:
• Clarify or update a business’s strategy;
• Link strategic objectives to long-term targets and annual budgets;
• Track the key elements of the business strategy;
• Incorporate strategic objectives into resource allocation processes;
• Facilitate organizational change;
• Compare performance of geographically diverse business units;
• Increase company-wide understanding of the corporate vision and strategy.
Related Bain capabilities
• Corporate Strategy
• Mission & Vision
• Performance Improvement
A Balanced Scorecard defines what management means by "performance" and measures whether management is achieving desired results. The Balanced Scorecard translates Mission and Vision Statements into a comprehensive set of objectives and performance measures that can be quantified and appraised. These measures typically include the following categories of performance:
• Financial performance (revenues, earnings, return on capital, cash flow);
• Customer value performance (market share, customer satisfaction measures, customer loyalty);
• Internal business process performance (productivity rates, quality measures, timeliness);
• Innovation performance (percent of revenue from new products, employee suggestions, rate of improvement index);
• Employee performance (morale, knowledge, turnover, use of best demonstrated practices).
Methodology
To construct and implement a Balanced Scorecard, managers should:
• Articulate the business’s vision and strategy;
• Identify the performance categories that best link the business’s vision and strategy to its results (e.g., financial performance, operations, innovation, employee performance);
• Establish objectives that support the business’s vision and strategy;
• Develop effective measures and meaningful standards, establishing both short-term milestones and long-term targets;
• Ensure company-wide acceptance of the measures;
• Create appropriate budgeting, tracking, communication, and reward systems;
• Collect and analyze performance data and compare actual results with desired performance;
• Take action to close unfavorable gaps.
Common uses
A Balanced Scorecard is used to:
• Clarify or update a business’s strategy;
• Link strategic objectives to long-term targets and annual budgets;
• Track the key elements of the business strategy;
• Incorporate strategic objectives into resource allocation processes;
• Facilitate organizational change;
• Compare performance of geographically diverse business units;
• Increase company-wide understanding of the corporate vision and strategy.
Related Bain capabilities
• Corporate Strategy
• Mission & Vision
• Performance Improvement
Description
A Balanced Scorecard defines what management means by "performance&... See Ven's complete reply
A Balanced Scorecard defines what management means by "performance&... See Ven's complete reply
Hi venkatesh,
Topic dealt in simple, Detailed manner..
very infromative. thanks for sharing
Its a Strategic Management Concept. It helps the Management to Gauge in terms of Companies overall operation - Where are We now, Where do we want to go and How do we reach there?
Basically it helps the Organisation (management ) to measure its performance from 4 perspectives. These 4 perspectives should match or be in alignment with the Business objective or Vision and Mission of the Co.
There are a) Customer Perspective
b) Internal Operations or Business Process
c) Learning & Growth
d) Financial Perspective
Customer Perspective - Customer Satisfaction or Customer Delight.
Internal Operations - Improving the Operation to meet Customer Satisfaction and increase performance, Innovation and reduce costs.
Learning and Growth: Aims towards employees - Since Learning and gaining Knowledge is important in this competitive environment. So Training and Development of employees is Significant.
Financial Perspective - Achieving Profits and Satisfaction of Stakeholders, Shareholders and be competitive.
Basically it helps the Organisation (management ) to measure its performance from 4 perspectives. These 4 perspectives should match or be in alignment with the Business objective or Vision and Mission of the Co.
There are a) Customer Perspective
b) Internal Operations or Business Process
c) Learning & Growth
d) Financial Perspective
Customer Perspective - Customer Satisfaction or Customer Delight.
Internal Operations - Improving the Operation to meet Customer Satisfaction and increase performance, Innovation and reduce costs.
Learning and Growth: Aims towards employees - Since Learning and gaining Knowledge is important in this competitive environment. So Training and Development of employees is Significant.
Financial Perspective - Achieving Profits and Satisfaction of Stakeholders, Shareholders and be competitive.
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