MA 13 Performance Management - Balanced Scorecard Flashcards
Reasons for BSC
- reduces ambiguity, mixed signals
- enables management and employees to better assess performance in all key facets and take action where needed
4 perspectives
Financial
Customer
Internal Business Processes
Learning and Growth
3 levels of results
- org can assess if it achieved strategy overall
- performance within each perspective can be analyzed
- each goal within the perspective can be assessed individually
5 steps to compiling
- Choose perspective framework
- Pick the goals
- Establish appropriate measure
- Decide on the SMART target
- Compile results using numerical scores
Strategy mapping - how is linked to the BSC?
Strategy mapping is used to set and communicate strategy, BSC used to measure progress - it takes the strategy and breaks it into tangible objectives and measures.
Employees can see the cause-and-effect relationships between the four BSC perspectives
3 levels of BSC use
Overall org
Department or division
Individual
What is the blend of indicators?
Leading and lagging, this demonstrates the cause-and-effect logic built in
How many goals should each perspective have?
4-7
What do strategy maps do?
translates strategy into action, by taking the 2 input perspectives (people/tech and business processes and combining with the 2 output perspectives (financial and customer expectations).
Takes strategies and translates them into concrete actions.
Strategy maps should be created. What is the benefits
- allows managers to suppot strategic planning process
- provides a frame of reference for developing the plan
- tests validity of strategy through examination of cause and effect
- refines strategic performance goals and measures
- equipms managers with tools that can help their careers in more senior finance or management roles
- highlights key strategic focus areas
