Key Elements of Balanced Scorecard Method

The balanced scorecard method is a performance-driven and strategic management tool. It is being used by various industries around the world as a good business management model. The application of balanced scorecard method in the government sector has also resulted to outstanding success. In fact, government agencies and private organizations are aligning their management methodology based on the balanced scorecard system. The universal application and the success of this management methodology contributed to its growing popularity.

The balanced scorecard method measures short term achievements based on the overall strategy of companies. Different company tasks therefore have clear framework in order to keep it focused. In determining the performance levels of a company, the balanced scorecard method will cover key areas that are vital in the growth of companies. Specifically, it will measure the performance of companies in its customer relation management. Customers and stakeholders are vital to the survival and growth of companies. How the organization deals with its customers and how they respond to specific customer needs are important measures of success. Another key element is internal business process improvement. Every company has a goal and internal business processes are used to reach that goal. It is therefore imperative for companies to measure the performance of its business process to determine if it is aligned with the overall company goal.

Balanced scorecard also measures the performance of human resources. People carry out tasks and they are responsible for the smooth operation of companies. If employees perform according to the strategic plan, success could not be far behind. That is why the balanced scorecard method puts premium in developing company human resources.