Balanced Scorecard

What is a Balanced Scorecard? Meaning & Definition

As per the standard Balanced Scorecard meaning, it is a framework that transforms traditional business strategies into operational ones to drive better performance and behaviour across the board.

To dive deeper into the Balanced Scorecard definition or BSC meaning, understand that it makes your strategy more visionary. It helps to add targets, objectives, and initiatives to each organisational strategy for better tracking and monitoring.

With a balanced scorecard framework, organisations can link financial measures with individual or group performances.

Because of its active usage in measuring employee and workforce performances, it’s now regarded as one of the crucial performance management frameworks or tools in the industry.

History or Origin of Balanced Scorecard

Dr Robert Kaplan, with the active assistance of Dr Norton, released a journal or paper mentioning BSC in it. This paper was released back in 1992. Again, this term was mentioned formally in 1996 in a book released by them.

From thereon, this concept picked up its application, leading to its worldwide success for measuring and monitoring performances in an organisation.

Benefits of a Balanced Scorecard in HR

Here are the key benefits of a Balanced Scorecard in HR:

• Align individual performances with the business objectives.
• Get a better insight and understanding of the KPIs to create.
• Create a strategic roadmap of performance expectations over a period.
• Enhance and multiply performances across the board with transparency of actions.

What are the Ways to Create a Balanced Scorecard?

HR balanced scorecard is easy to create, especially when you have smarter HR systems like ours in place. Nonetheless, these are the four goals you need to define to create a Balanced Scorecard Model:

1. Identify business goals and expectations for the four perspectives of this scorecard.
2. Create a strategy map in each perspective.
3. Set performance KPIs accordingly, aligning with the strategy map.
4. Keep a tab on the progress and analyse the impact of on-time course correction.

Four Perspectives of the Balanced Scorecard for Performance Evaluations

The four perspectives of a balanced scorecard include:

1. Financial:
   Getting the perspectives of your stakeholders
2. Customer:
   Insights on what your customers are expecting and experiencing
3. Learning and growth:
   Fostering a culture of continuous growth and learning
4. Internal processes:
   Streamlining and automating your business processes to achieve efficiency at every level.