Balanced Scorecard Performance Measurement Examples
Performance measurement is an important aspect of a balanced scorecard. One of the main reasons why is simply because it’s not enough to just set objectives. It would just make your balanced scorecard incomplete. If you just set objectives like that you will never know when that objective is met.
If you do know based off of a rough estimate or couple data points that’s great but there is a little drawback. This will not allow you to get the chance to analyze your data. That will allow you to see where within your different processes mistakes were made while reaching up to that goal.
That’s why it’s necessary to use performance measurement. When you use performance measurement on your balanced scorecard it will help you to develop metrics to help track certain operations and processes that will tend to have an impact on your goal.
When these metrics are then tracked and measured. It will give you the opportunity to see inefficient performances at a deeper level. That you would’ve overlooked if you were just looking at your goals and results like that. Creating a performance measurement for your balanced scorecard solely depends on your company’s goals.
A balanced scorecard comes with four main areas or perspectives. These include the financial section, learning and growth, internal business processes and customer. So it’s up to you as the manager to see where out of those 4 quadrants are there weaknesses.
That you can then go about creating a balanced scorecard for. Below you can see some examples of performance measurement that came from a balanced scorecard.
Financial
• Reduce our annual budget by 10% in 6 months
• Increase our operation cost by 5% in 12 months in order to scale up production
• Increase the valuation of our company by at least 7% in the next quarter
• Increase our sales volume by 3% in 9 months
Customer
• Create a better brand awareness among our customers in 12 months
• Increase our conversion rate by 10% in 6 months
• Reduce the number of daily angry customers by 5% in 10 months
• Reduce our average wait time by 10% in 8 months
Internal business process
• Decrease our manufacturing waste by 8% in 10 months
• Increase our normal machine uptime by 5% in 12 months
• Improve our overall equipment effectiveness in 3 months
• Decrease our production cycle time by 6% in 5 months
Learning and growth
• Retrain 40% of our employees who have worked at our company for over 10 years in 8 months
• Create 5 new training programs for our fresh new set of employees within 6 months
• Increase the rate of communication within our organization
• Set up training programs to turn our managers into better leaders in 5 months
As you can see above these are just to give you an idea of what it’s like to create performance measurement for your balanced scorecard. Using performance measurement will help your balanced scorecard be more effective. So it’s necessary for you to put the effort needed to create one for your organization.