Balanced Scorecard

1. Balanced Scorecard

2. Meaning- It is a connecting bridge between the strategy and operation elements of the organization Balance Scorecard Meaning and Definition Definition- It is a performance based metric which companies used for strategic management • Purpose of Balanced Scorecard • Ensure clear communication about goals • Align daily work with strategy of the company • Prioritize on product, project and services level • Monitor and measure organizational progress

3. Kaplan and Norton balanced scorecard Background to the Balanced Scorecard • The balanced scorecard was developed in early 1990 • It measures firms performance using both financial and • non-financial data • Aim- 1. To align the work activities of organization to its vision • 2 To improve communication • 3.To monitor business performance with respect to strategic goals • A broad picture of status of organization can be created using different perspectives • Composite scorecard is always preferable than single measure to determine the performance progress of organization • Four important perspective of analysis of organization- customer, finance, internal, learning and growth. • Critical measures should be selected for these perspectives

4. Four Perspectives of balance scorecard • Financial Perspective • Customer Perspective • Internal Process Perspective • Learning and Growth Perspective

5. Balanced Scorecard Approach • Preparation • First round of interviews • First executive workshop • Second round of interviews • Second executive workshop • Third executive workshop • Implementation • Periodic Reviews

6. Advantage of Balanced Scorecard • Builds up the necessary focus which is needed to improve performance • Integrates the organization as one entity • Helps in reflecting organizational strategy through performance • Connects the corporate team with the operational team of organization • Improves clarity and communication among employees • Improves organizational efficiency

7. Disadvantages of Balanced Scorecard • Can be confusing for employees due to large number of performance indicators • It is hard to manage balance between all four perspectives of balanced scorecard • The operational team might get busy in execution but the leadership team will still look for quick financial results. • Need to be updated regularly to maintain its relevance for the organization.

8. Purpose and Objective of Balanced Scorecard • Objective • To ensure that at operational level the vision, mission and value of the organization is properly reflected • To make sure that the set financial goal is achieved through a planned workout • To uplift the organization at the skill and talent level • To understand the wants and needs of customer and to set a internal processes to satisfy the customers • Purpose • To integrate the organization on one platform • To empower the employees who can now contribute in the organizational system • To measure both tangible and non-tangible aspects of performance • Overall performance improvement of organization

9. Thank You