Free Use of Balanced Scorecards Essay Sample


A balanced scorecard may be referred to a system used by the management to evaluate the performance of the business vis-a-vis its vision. The mission and vision statement are very important because they guide the objectives of the firm and the achievements they wish to attain in a certain time period. It is used to upgrade the way the organization is able to communicate internally or externally with the public. It is able to identify the problems and the successes of the systems applied in the organization. It eases the work of the managers in controlling and managing the entire organization. It is also the surest way in which the organization can fully implement its vision into action for the better of customers and their employees. In these modern times there are softwares that allow organizations to keep balanced scorecards in their computers. These softwares are easily understood, accessible, easily updated and compliant with the modern technology.

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Importance of the balanced scorecards

Before embarking on this holistic view, it is important to go through the company’s mission statement and its strategic plans. Then, the manager should check the financial status of the organization to ensure that it can be afforded or within the set budget. The balance scorecard also depends on the way the organization is structured and level of expertise of the employees to test for compatibility with the system. The most important departments that need this balance scorecard system include: finance, internal business processes, learning/growth and customer satisfaction. The financial balance scorecard is used to outline the possible ways in which the organization can succeed in meeting its financial obligations. It also incorporates the best strategies in which shareholders’ investments can be taken care of to yield more returns.

The customer satisfaction balance scorecard is used to evaluate how best the customers are served and how satisfied they feel with the products or services. It is measured by analyzing the delivery performance, quality performance, and customer satisfaction rate, customer percentage of the market and customer retention rate. The learning/growth balance scorecard is used to evaluate possible ways in which the employees will grow and adapt to the changing needs of the customers. It also helps the managers to find the best ways in which the employees will learn to improve their skills as pertains to technology. Again, it gauges if the correct level of expertise is applied to specific jobs. On the other hand, the scorecard can be used in internal processes to check if every stakeholder in the business is satisfied with the performance of the organization. It will also help to identify areas in which special care should be applied in order to excel. In addition, it aligns the process by making sure that the right process is carried out by the right department to lower the bottlenecks.

The balance scorecard measures performance by measuring all the significant aspects of the organization. The balance scorecard can only work in instances where the work is quantifiable. It needs to be work that is measurable otherwise it may be hard to evaluate its importance. In case there are those types of work that are immeasurable, then they should be minimized. There should be an expectation formed as pertains to the desired performance so as to evaluate the desired outcomes. There is also need for frequent reports in order to judge the successes and failures of the organization. Any failures should be corrected by timely and effective control by managers. If all requirements are met then the system may be efficiently implemented.

The balance scorecard is recommended because it has several functions in the performance of the company. It is used to evaluate how coherently the mission and vision are running. The objectives are evaluated on the basis of data collected from employees and customers on the performance of the company. The result of this of this evaluation should match the accomplishment of the company towards the public. It should be cost effective but still give value. The public should feel that the services are quality driven but affordable. In order for the organization to evaluate or analyse its performance it should set standards by using the balance scorecards. The results from the scorecards will determine how its performance compares to the expectations.

Again, the balance scorecards are used to control how managers are able to control the other employees and how effective they are at managing the overall organization. They are supposed to control or evaluate the work of the employees but also give them space to discover their potential. In addition, there should be control bias where the system allows some specific employees to work on specific projects. This is the best way to ensure that employees do not joy ride on other people’s work. It is important that managers control the behaviour of individual and how they respond towards the process outlined. The managers need to compare how the employees have complied with the set regulations or their responsibilities. Strategic management is needed to analyse how well the scorecard system is working. The measures for good performance involve the act of focussing the employees’ efforts towards the vital aspects.

Moreover, balance scorecards are used to guide the budget. The scorecards will contain all the budgetary cuts that should be made in order to increase the efficiency of the company in terms of expenditure. They need to check how each subsidiary is spending its money in case the organization has branches all over the country. The need to control the budget is important so as to plan for the vital elements in the organization. The scorecard will evaluate the important things that are needed in the organization and those that need an upgrade. Hence, it will act as guide as to how finances should be mobilized and utilized. Finances should be allocated to those projects that are feasible and also cost effective. This is measured by finding out the people that are likely to benefit vis-a0-vis the cost of implementing that project. Any expenses should be compared to those done on the scorecards to check if there has been misappropriation of funds, wastage or under utilization in special areas of the business. They can also be a good measure against corruption or embezzlement since the funds will need to be properly accounted for.

To add to that, balance scorecards may be used to motivate the employees and their managers to perform better.  The employees are given certain standards in which they have to perform including monthly, quarterly or annual targets. These targets are outlined in the scorecards in order to keep the employees focussed on their work. They allow an employee to feel a sense of accomplishment when they attain their targets. The managers should use this opportunity to appraise and reward the hardworking employees. This will make the rest to upgrade their skills in order to match up to the competition. These performance scorecards are also important because they allow workers to become creative. They become more efficient and they aim to learn from each other.

When the employees become efficient, they are able to produce more output in less time. Therefore, the production targets are also going to be alleviated and workers learn the need to have quick responses in dealing with organizational problems. The balanced scorecards help the workforce to appreciate their accomplishments.  It is the scale at which people can celebrate because of their targets whether personal or collective. Those who did not achieve their target are encouraged to improve through training or other motivational ways to avoid high employee turnover.

If the balanced scorecard is well implemented and succeeds then the business is likely to achieve more than its set vision. It will result to improved processes which are both time and cost efficient. The internal functions will be carried out faster and at minimal cost. Then the manager can allocate the extra time and money to areas where there is more attention needed. Again, the employees will be happy, satisfied and motivated to work harder because they know their efforts will yield returns. Moreover, there will be enhanced information systems where communication will flow smoothly between the customers, shareholders, management and employees. There will also be customer satisfaction which will lead to higher cash flows. In addition, there will be monitored progress that will ensure that the flaws in the organization are kept to a minimal.


Despite the fact that the scorecards may have limitations like being too subjective on certain areas or encouraging employees to meet short term targets instead of long term ones; it is a very valuable intervention strategy. It helps to increase employee focus on strategy and overall results. It aligns the organization strategy with the expected vision, improves communication channels, prioritizes projects and leads to the overall efficiency of the organization. Moreover, it is cheap to implement and easy to understand so it is worth a try in all organizations.


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