Balanced Scorecard | Meaning and Definition

What is a balanced scorecard?

A balanced scorecard is a framework that helps organizations implement and manage their strategy. It enables managers to track progress and identify areas where improvements are needed. 

This scorecard approach has been particularly effective in human resources management called the HR scorecard. HR professionals use it to develop a clear understanding of the organization’s strategic objectives and then create measures and targets to help achieve those objectives.

The resulting scorecard can then track progress and identify areas where further improvements are needed. When used effectively, the balanced scorecard can help organizations achieve their objectives and improve overall performance. 

Objectives of the Balanced Scorecard (BSC) Model

The objectives of the Scorecard Model are to align strategic objectives with operational measures and track progress toward those objectives. 

1. Objectives: The model starts with the identification of organizational objectives. These objectives are typically grouped into four areas: financial, customer, internal process, and learning & growth.
2. Measures: Once objectives have been identified, indicators or measures must be chosen to track progress towards these objectives. This step is important to ensure that the right metrics are tracked and reported.

3. Initiatives: The scorecard model is often used by organizations to measure their progress in achieving strategic objectives and initiatives. The model has four key perspectives: financial, customer, internal process, and learning and growth. Each perspective is subdivided into several specific metrics that help track progress towards the organization’s strategic objectives. 

Overall, this method is a great step forward in achieving the goals of an organization.