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Hi Sir;
How budgets are related with other performance management systems e.g. Scorecard, prism, building block model etc?Is there any link between them?
While budget is a plan in financial or quantitative terms. And them we measure performance at the end through variance analysis.
On the other hand these performance management models use performance measures which are different.
Are there any targets set in budgets for these measures or no?How performance pyramid can be related to an organizationwhich operates budgets.
A budget can be defined as a quantified plan. Most budgets are financial, but they don’t have to be. You can budget for chargeable hours, production volume, quality rejects eyc.
The point about the scorecard (and the other models) is that the seek to extend budgets (which are essentially also targets) beyond just the financial. So the customer perspective requires budgets/targets for customer satisfaction, sales growth, return visits etc.Customer satisfaction is one performance measure of the customer perspective and would have a target or budget.
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