Balanced scorecard
A balanced scorecard is a strategy performance management tool – a well-structured report used to keep track of the execution of activities by staff and to monitor the consequences arising from these actions.
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The term 'balanced scorecard' primarily refers to a performance management report used by a management team, and typically focused on managing the implementation of a strategy or operational activities. In a 2020 survey 88% of respondents reported using the balanced scorecard for strategy implementation management, and 63% for operational management. Although less common, the balanced scorecard is also used by individuals to track personal performance; only 17% of respondents in the survey reported using balanced scorecards in this way. However it is clear from the same survey that a larger proportion (about 30%) use corporate balanced scorecard elements to inform personal goal setting and incentive calculations.
The critical characteristics that define a balanced scorecard are:
- its focus on the strategic agenda of the organization/coalition concerned;
- a focused set of measurements to monitor performance against objectives;
- a mix of financial and non-financial data items (originally divided into four "perspectives" - Financial, Customer, Internal Process, and Learning & Growth); and,
- a portfolio of initiatives designed to impact performance of the measures/objectives.