Balanced scorecard is a measure and management tool that emphasizes performance based on strategic plans of a company. The development of balanced scorecard allowed managers to make concrete work strategies and to measure actual performance based on what the company has set. The system focuses on four areas of concerns which are also known as the four key perspectives of a balanced scorecard metrics. Performance is measured based on satisfying tasks enumerated on these key perspectives.
Performance reports then could be easily generated and more importantly comprehended because plans are clearly spelled out in a balanced scorecard. If a task is lagging behind, it can be easily pointed out even during the implementation of the entire business plan. In this way, appropriate adjustments or measures are implemented to make sure that planned tasks are carried out according to schedule.
This makes the balanced scorecard system a good strategic management tool and at the same time a good data generation tool as well. It would be easy now for companies to assess and evaluate the performance of different departments and business units because the plan can be used also as a report mechanism. Specific objectives and the methods to reach those objectives are listed on a balanced scorecard plan. Every responsible personnel have their own scorecard that serve as an implementing plan. Work is measured based on those scorecards and should be updated whenever a milestone has been reached. Upon assessment, manager and key personnel will evaluate accomplishments based on their scorecards. The data generated by this type of balanced scorecard report would be very accurate and reflective of actual situations.