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Balanced Score Card

Balanced Score Card translates an organisation’s mission and strategy into a set of performance
measures that provides the framework for implementing its strategy. The balanced score card
does not focus solely on achieving financial objectives. It also highlights the non financial
objectives that an organisation must achieve to meet and sustain its financial objectives. The
score card measures an organization’s performance from four perspectives:
 Financial;
 Customer;
 Internal Business Processes ;
 Learning and Growth.
It is called Balanced Score Card because it balances the use of financial and non financial
performance measures to evaluate short run and long run performance in a single report.
Following format will help in understanding the balance score card:
Framework of Balance Score Card

Perspectives Objectives Measures Initiatives Target Actual


Performance Performance
Financial Objectives Measures Initiatives Target Actual
Performance Performance
Customer Objectives Measures Initiatives Target Actual
Performance Performance
Business Objectives Measures Initiatives Target Actual
Process Performance Performance
Learning & Objectives Measures Initiatives Target Actual
Growth Performance Performance

Financial Perspectives

Objectives Measures Initiatives Target Actual


Performance Performance
Operating Income Managed Cost and Rs 20 crs Rs 21 crs
Increase from Productivity Unused Capacity
Shareholder Gain
Value Operating Income Building Strong Rs 30 crs Rs 31 crs
from Growth Customer
Relationship
Revenue Growth 6% 7%

1
Customer Perspectives
Objectives Measures Initiatives Target Actual
Performance Performance
Increase Market Market Share in Identify Future needs 8% 7%
Share the segment of of Customers
Industry
No of New Identify new 1 2
Customer customer Segments
Increase Customer Increase customer 90% 87%
Customer Satisfaction Rating focus of sales
Satisfaction organisation

Internal Business Process

Objectives Measures Initiatives Target Actual


Performance Performance
Improve Post Sales Service Response Time Improve Customer Within 4 hrs Within 2 hrs
Service Service Process
Improve Yield Identify root cause 78% 73.3%
Manufacture Quality of the problem and
and Productivity improve quality
Reduce Deliver Order delivery time Reengineer order 30 days 30 days
Time to Customer delivery process
Meet Specified On time Delivery Reengineer order 92% 90%
Delivery Dates delivery process
Improve Processes No of major Organise team from 5 5
improvements in mfg. and sales to
manufacturing and modify processes
business processes
Improve Percentage of Advanced Organise R/D mfg 75% 75%
Manufacturing Processes with Advanced teams to implement
Capability Controls advanced controls

Learning and Growth

Objectives Measures Initiatives Target Actual


Performance Performance
Align Employee Employee Satisfaction Employee 80% of 88% of
and Organisational Ratings Participation and employees give employees give
Goals Suggestions top 2 ratings top 2 ratings
Programme to build
teamwork
Empower Percentage of line Have supervisors act 85% 90%
Workforce workers empowered as coaches rather than
to management decision makers
processes
Develop Process % trained in quality Conduct employee 90% 92%
Skill and process aspects training programmes

2
Enhance % of manufacturing Improve online and 80% 80%
Information processes with real off line data gathering
System time feedback
Capabilities

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