Practical Application: Utilizing the Balanced Scorecard Approach

Instructor: Natalie Boyd

Natalie is a teacher and holds an MA in English Education and is in progress on her PhD in psychology.

Companies use a balanced scorecard to assess their growth in several key ways. This practical application walks you through the four major areas on a balanced scorecard and an example scorecard you can use now to assess your organization.

The Balanced Scorecard

A balanced scorecard approach allows companies to think about progress in a multifaceted way. There are four major process areas that most balanced scorecards include. They are:

1. Financial goals, which look at the profits and losses of a company or department.

2. Customer satisfaction, which looks at how happy customers are.

3. Departmental and organizational processes, which focus on how well the processes within a company or department are serving their purposes.

4. Training and learning goals, which are about how a company or department is growing and responding to change.

For a more detailed look at balanced scorecards, try the lesson Balanced Scorecard Approach to Performance Evaluations. For information on metrics that can be used for each of the four process areas, check out the lesson What is a Balanced Scorecard?

Below, you'll find a balanced scorecard divided into the four process areas. Use the rubric below to score your organization or department based on the metrics in the scorecard.

The Rubric

Score Category
4 Exceptional
3 Good
2 Competent
1 Needs Improvement

Area 1: Financial Goals

Score Metric
Profitability: How profitable are we?
Profitability: Have we met our profit goals for this quarter? This year? The past five years?
Market share: Is our market share growing?
Costs: Are our costs rising faster than our profits?
Costs: Have we managed to reduce costs to maximize profits?

Area 2: Customer Satisfaction

Score Metric
Direct feedback: Are our customers saying they are happy?
Direct feedback: Are our complaints down?
Indirect feedback: Do we have a lot of repeat customers?
Indirect feedback: Do we get customer referrals?
Public responsibility: Have we launched initiatives to increase the public good and proactively help our customers?

Area 3: Processes

Score Metric
Productivity: Are our processes efficient?
Productivity: Are our employees accomplishing what they need to accomplish?
Employee attitudes: Do our employees feel the processes help them accomplish their work?
Agility: Do our processes allow for fast response to change?
Innovation: Do our processes allow our employees to try innovative solutions?

Area 4: Training & Learning

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