Putting the Balanced Scorecard to Work

"Balanced Scorecard" as the name suggests, is meant to strike a balance between various factors. These factors are the various parameters used to measure performance.

To discuss in detail, it is the method used in the organizations to measure their performance in the form of different parameters and thereby assess that the goals set in the organization for these parameters are achieved or not. But along with this, it also helps to review that whether any change in required in these set goals or not.

Balanced Scorecard can be described in the following easy steps:

1. The performance of the organization is measured in the terms of the parameters such as profit rise and customer retention.

1. This performance is evaluated on a daily basis using the various key performance indicators (KPIs); decided by the organization as per their needs and area of business.

1. The reasons behind various performance measures are then analyzed. These reasons are obviously the organization’s internal processes and daily activities and the daily targets set for the employees, for example, daily production target or sales target.

These targets are set and the processes are designed keeping in mind the annual, semi annual, quarterly and other such goals set for a period of time. These goals are set for various dimensions such as production, sales, learning and development of employees, reduction in time required in production, etc. by both the planning team and the concerned department together.

1. Hence, if the performance does not meet the targets, it is reviewed that changes are required in these set targets or not.

1. If the conclusion is drawn that the targets need to be revised, then the course of action is taken. Goals and objectives which need to be changed are done so, accordingly.

In this way, it is not just a performance measurement system, but an integrated and strategic planning and management system. Considering all the above steps, it can be said that Balanced Scorecard has both forward and backward approaches.

This method is used in the companies across the world. An increasing number of companies in the continent of US, Europe and Asia are adopting this method. In our India also, many large-scale companies use this method. And in a growing economy like ours, it is essential that along with large-scale; medium and small-scale companies also use this method.

But, just deciding to design and implement it for our organization is not enough, it is essential to put it to work. And putting the balanced scorecard to work requires lots of planning and co-operation from everyone in the organization.

The biggest concern here is that the employees and the HR department of the company may not be fully aware about this method and its implementation. Also, if they do it, it may be time consuming for them, thereby disrupting their regular activities. And hence, it is much wiser to take the help of the business solution providing firms.

These firms specialize in designing the method as per the organization’s industry, size, structure, location and their principles and way of working. Such firms design the balanced scorecard method, suitable to the needs of the organization and keeping in mind the above factors. The organizations benefit from these firms’ knowledge and professionalism and save their time and money.