THE BALANCED SCORECARD METHOD: FROM THEORY TO PRACTICE

Abstract

. Performance management has become a legislative requirement for the private and local sectors. Unfortunately, not many tools exist to measure and monitor public and private service delivery effectively. Managers require accurate information to ensure that their decisions are not based on emotions and assumptions but that the information with regard to service delivery is accurate and relevant. In modern business models, intangible assets such as employee skills and knowledge levels, customer and supplier relationships, and an innovative culture are critical in providing the much-needed cutting-edge to the organisation. This is where tools like the balanced scorecard method hold relevance for the enterprise. Developed by Robert Kaplan and David Norton, the balanced scorecard method translates an organisation’s strategy into performance objectives, measures, targets and initiatives. It is based on four balanced perspectives, and links them together with the concept of cause and effect. A proper balanced scorecard can predict the effectiveness of an organisation’s strategy through a series of linked performance measures based on four perspectives including finance, customers, internal processes, employee learning and growth.