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Hi Sir,
With reference to Sept/Dec15 Q4(a), what is the examiner trying to test us on when the question says “how the use of balanced scorecard could improve the performance management system”?
1. what does performance management system refers to (it’s a general term)? is it about measurement, improvement or both?
2. how do we explain our answer on “how bsc IMPROVES it? on what basis are we evaluating or writing?
3. What should the approach be in answering this kind of question? Do we identify the issue, link it to one of the perspectives of BSC, then…? (I’m a lost and confused student haha)
Thank you in advance for the enlightenment, Sir!
A performance management system consists of:
Deciding what is meant by ‘performance’.
What factors lead to good performance
Measuring those factors
Improving performance in those factors so that overall performance improves.BSC suggests that financial performance (usually what matters ultimately) rests on customer perspective (eg are they happy with us?), internal business (why are customers happy with us and are we efficient?) and innovation (for long term survival).
Performance at each level needs to be measured and improved where necessary.
BSC widens organisations’ perspective of where they need to perform well if they are to have sustainable success. There’s no point in saying performance will be improved if profits improve ( a truism) if you cannot say what improves profits and you cannot manage those elements.
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