Scorecard System Essay

Performance management systems benefit stakeholders at every level if they are implemented successfully. Performance management systems align employee performance with the strategic direction set by the organization. St. Jessica’s Urban Medical Center’s leadership must perform specific actions, prior to implementing the new performance management system, to ensure it is a success. The organization's leadership must disseminate the information throughout the company, create a process that ensures employees can dispute ratings, train raters to evaluate employees and gain buy-in from early adopters (Aguinis, 2013). A newly implemented performance management system will fail if the proper steps are not taken in the beginning.

The use of a balanced scorecard when gauging the performance of executives at Paradigm Toys is useful because it measures several key areas that measure past and real time performance that directly affects the company. A balance scorecard can contain both financial and nonfinancial measures as well as both quantitative and qualitative performance measures. Additionally because a balance scorecard can be tailored to the business’s specific targets it can measure the substance of performance better that basic financial indicators that are usually considered the basis of performance ratings. It is important to use more than just financial indicators, because other factors, those qualitative in nature, measure how an employee does their job and gives a larger picture of how well an employee performs. For example, in the case of sales concerning installation of home improvement products one might be measured by repeat buyers or customer satisfaction of how well the salesman followed up with their sale and installation. This kind of non-financial factor can be used to measure the company’s goal of repeat buyer and customer satisfaction which can translate into future sales and growth. Financial indicators are used in similar ways, but are more quantitative in nature. The main reason to use financial indicators is because they can provide a clear picture

“The balanced scorecard should translate a business unit’s mission and strategy into tangible objectives and measures. The measures represent a balance between external measures for shareholders and customers and internal measures of critical business processes, innovation and learning and growth. The measures are balance between outcome measures, the results of past efforts, and the measures that drive future performance. And the scorecard is balanced between objective, easily quantified outcome measures and subjective, somewhat judgmental, performance…”

It is important to view measurements as a way of improvement. Without knowing areas of weakness how can we better our position? The author notes the importance of transformational measurements as making a difference, (Spitzer, 2007). As the organization improves upon their progress, performance measurements are an effective method of capturing progress, when performance improves so does the environment, (Spitzer, 2007). People feel good when they see positive results, (Spitzer, 2007). Measurements are very effective for establishing a steady rate of progression in reaching individual and organizational goals, (Spitzer, 2007). Measurement is life; it is something that occurs in just about everything we do, (Spitzer, 2007). Measurement is more than just numbers it also pertains to how we feel, how we interact socially and our overall health. Organizations need measurement to remain competitive, they measure productivity and marketing skills to improve their position within society, (Spitzer, 2007). In order for management to be effective, their method of measurement must be in line with the objective. The author explains that rewards are great for continued progress and motivation, but when not measured effectively it can be very disastrous, (Spitzer, 2007). Employees are rewarded for the wrong thing, which in turn sends the wrong message, (Spitzer, 2007). An

Introduction- To be competitive, organizations must be both strategic and tactical to the nth degree, must be proactive rather than reactive, and must find a way to measure this easily and accurately. One way to accomplish this is through a Balanced Scorecard approach; a tool often viewed as one of the best tools that helps organizations translate strategy into performance. In general the BSA (Balanced Scorecard Approach) allows for a clear strategic and tactical directions for the organization, retains financial measurements in a summation along with their links to performance, and highlights an important and robust measurement system that links and integrates customers, stakeholders, processes, resources, and performance into single measurement strategy.

be measured. Scorecards are a useful tool for both managers and employees, as they can be

What you measure is what you get” – In the journal ‘The Balanced Scorecard – Measures that drive performance’ by renowned professors, Kaplan and Norton (1992), a new management system was introduced to a peripheral perspective economic industry. Past the industry era, traditional financial performance measures such as return-on-investment and earnings-per-share were deemed no longer competent in the ever-changing market. The view of focussing on either financial or non-financial perspectives alone were regarded as one-dimensional and ignorant of other crucial factors in both the company and the market.

This article describes the benefits and concerns of adopting balanced scorecards as a performance management tool to meet organisational missions and strategies. It discusses the areas of: financial, customer, internal business, and learning and growth perspectives and how they relate to balanced scorecards; the principles involved in using balanced scorecards; how balanced scorecards are beneficial for an organisation; the administrative support required; and the outcomes that can be achieved from employing balanced scorecards as a performance management tool.

The balanced scorecard (BSC) is fundamentally a customized performance measurement system that looks beyond traditional financial measures and is based on organization strategy. This paper discusses fundamental concepts in developing performance metrics, provides an overview of issues in developing balanced scorecard measures, and gives numerous illustrations of performance measures. As shown later, the BSC is an active area of research within the medical community. However, previous research does not report on the fundamental linkages between hospital inputs, outputs, and the creation of performance metrics. In addition, these articles provide few specific examples of balanced scorecard measures and illustrations of how the balanced scorecard translates action into improved performance.

In the modern business and organizational environment, particularly as a result of globalization, competition equates performance. To be competitive, organizations must be both strategic and tactical to the nth degree, must be proactive rather than reactive, and must find a way to measure this easily and accurately. One way to accomplish this is through a Balanced Scorecard approach; a tool often viewed as one of the best tools that helps organizations translate strategy into performance. In general the BSA (Balanced Scorecard Approach) allows for a clear strategic and tactical directions for the organization, retains financial measurements in a summation along with their links to performance, and highlights an important and robust measurement system that links and integrates customers, stakeholders, processes, resources, and performance into single measurement strategy. This tool also provides the organization with a tool that takes vision and moves it to strategy, and the conversely, strategy into tactics. BSA supports planning and unites the organization into a more singular vision and common goal. It also allows for both internal and external feedback so that performances and results continue to evolve and improve.

The employees are with the scorecard more empowered, as they can see the work in a more strategic context and therefore set priorities more effectively themselves.

Since an organization is composed of multiple levels, a scorecard must support different levels and perspectives from strategic business units and divisions, to departments, teams and individuals. To accommodate this architecture, the scorecard is structured as multiple, aggregated cubes. Each layer a nesting of the ones below. In general, the highest level cube defines the measures and dimensions that apply to the corporate level, and these drill through to divisional and departmental cubes that have a more detailed level of information (Nickols, 1999). This “artery” of the cubes lets the strategy communicate down the organization, while performance is aggregated up through the organization like blood through vein.

A balanced scorecard is a popular management tool that evaluates a company’s performance with both financial and nonfinancial measures (Hendricks). This concept was developed after the realization that a company could not determine its success by one factor (Manzoni 193). Organizations are complex, often consisting of multiple departments which have different goals and measures of success. Choosing one factor to explain the organization’s achievement as a whole is near impossible. “Financial indicators, for example, are typically considered to be ‘lagging indicators of performance,’ because they record

The scorecard turns strategies and goals into tactics and demonstrates any actions to drive success. This allows all of the employees throughout McDonald’s hierarchal structure to head towards the same direction. Through the scorecard, you can paint a vivid picture of how all departments must be synchronized to achieve a goal of increased sales. Without this coordinated view, each department is free to set its own measures of success and there is no golden thread to ensure the organisation’s goals are met. My Sector which consists of tills and making sure the customer is served in a fast, efficient, and friendly way sets KPI standards and gives out promotional products in order to give consumers a chance to come back and get a discount on their next purchase. Without the coordination from all departments individual sections of the organisation would have their own actions of success to attain for and there would be no “Golden thread” to make sure strategies and goals within McDonald’s are met. The multi level view of the scorecard enables all layers of the organisation to understand how they can impact results, that is, what is within each tiers specific control to influence. As a team member , I assure that where there a need, I help other departments when I can such as the grill, making sure that they have all the utensils in place on grill side and chicken side, Managers, and delivery team.

The primary focus of BSC’s few measures for each perspective is to avoid overloading managers with information. This is supported by proponents Milad, Norlena and Nor Hasni-“The dependence on a few measures in the BSC is to identify and measure those actions that are required to improve desired outcomes. Mohobbot (2004) and Henk and Kim (2002) point out that the advantage of checking just a few number measures becomes a disadvantage when the right numbers are not selected for the BSC.” (Milad Abdelnabi Salem, Dr. Norlena Hasnan, Dr. Nor Hasni Osman). All of the critic’s viewpoints depend on the fact that BSC lacks the mechanism for maintaining the relevance of chosen metrics which leads to the possibility of missing some critical measures. Although BSC provides good exposure on the performance measurements, it provides no validation mechanism for the defined metrics.