Performance Measurement Using Balanced Score Card
8 Pages Posted: 19 Apr 2007 Last revised: 30 Aug 2012
Date Written: April 10, 2007
In the global knowledge economy, creation, sustenance and application of knowledge has become the key differentiator of success. Many companies have realized that management of knowledge and the knowledge workers as a critical source of competitive edge than the traditional effective physical asset management
There has been growing criticism of financial measures in performance evaluation system and variety of new measures were floated in the last two decades, Balanced Score Card is an important one among them
Balanced scorecard is a set of measures that gives top managers a fast but comprehensive view of the business. It pulls together, all important elements of a company's competitive agenda. Through this, the top management can better understand the internal trade offs - whether the value addition in one area is achieved at the cost of another.
The major limitation of the balanced score card is that it promotes multiple objectives. Despite the criticism the balanced score card continues to be a very important tool of performance measurement all over the globe. However, the difficulty in balancing the various measures together, prioritizing the perspectives and parameters/assigning weights continues to be an area of major concern in its implementation
Use of Balanced score card with much broader utility of linking strategy and translating vision into actions are yet to be empirically established.
Keywords: Corporate Performance, Balanced Score Card, Corporate Objective, Financial measures, Non financial measures
JEL Classification: G00, J33, L21, M40, M52
Suggested Citation: Suggested Citation