Performance Management of the Company by Balanced Scorecard

In measuring performance management of the company, there is an approach known as the Balanced Scorecard. This approach introduced by Kaplan and Norton through books Balanced Scorecard. Balanced scorecard means performance report that balanced. This approach to measure the performance of the organization through a comprehensive through four main dimensions, namely: the dimensions of financial, customer, internal business processes and the dimensions of learning and growth.

Financial dimensions are the last result achieved by a business organization. In this dimension, several performance indicators (key performance indicators) are often used as a reference, among others: the level of profitability of the company, the number of sales in the year (sales revenue), the level of cost efficiency of the operation (operation cost, compared to sales), or financial indicators such as ROI (return on investment), ROA (return on assets) or EVA (economic value added).

Customer dimensions are important factor to achieve success in financial aspect, because without customers, a business organization may not run. A number of key performance management indicators that are commonly used in the dimensions of these customers include: the level of customer satisfaction (customer satisfaction index), index of the brand image, brand loyalty index, the percentage of market share, or market Penetration level.

Internal business processes dimensions. Some key elements in the internal business processes that suitable controlled with the optimal include the entire chain (supply chain) the process of production or operations, quality management, and process innovation. Some examples of key performance management indicators that are usually used in these dimensions are: the percentage of the product defect (defect rate), high speed level in the production process, the number of innovation process and product are developed in a year, the number of products / services on-delivery with the appropriate time, the number of violations SOP (Standard Operating Procedures).

Learning and Growth dimension. This dimension focuses on the development of a capability, Human Resources, leadership potential and strength of the cult organization to continue to be developed to the optimum point. This dimension would put a strong foundation so that a business organization can continue to display its superiority. Examples of key performance management indicators used to measure the performance of these dimensions are: employee satisfaction (Employee satisfaction index), level of competence the average employee, the index cultural organization (organizational culture index), or the number of hours of training and development per employee.

That’s four main dimensions that must be managed and measured performance in constant from time to time. The fourth dimension is synergistic and closely relation mutually in hierarchical. A business organization is almost not possible achieving superior financial without supported by the customers satisfied and loyal. And the loyal customers who will never continue to grow if the organization does not have a business process that excellent and innovative. And in the end, this excellent working process will probably only become a reality if the organization is supported by the Human Resources superior, good leadership and a positive culture of the organization.

A series of key performance management indicators (with the target number) for each of the dimensions above must be monitored and identified achievement periodically (once a month in each session monthly performance review meetings). Through a process of comprehensive performance management in four dimensions, a business organization should be able to continue to grow toward success.

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2 Responses to “Performance Management of the Company by Balanced Scorecard”

  1. Tim Reynolds Says:

    Nice post. Thank you for the info. Keep it up.

  2. Jaka Setya Says:

    Great info…im balancescorecard practitioner, if you have some question just leave messages at my blog. Thanks

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