and Non-Financial Measures
on Performance Evaluation
Learning Objectives
•
Identify and differentiate the four perspectives of the
balance scorecard and formulate performance indicators to
evaluate, monitor and improve business performance.
•
Demonstrate and
understanding of how to
construct and use a
balanced scorecard.
•
Compute for operational
performance measures.
Balanced Measures
•
In a firm, measures selected should be balanced between:
• Lag and lead measures
Balanced Measures
Balanced Measures
FINANCIAL
NON FINANCIAL
Financial measures focuses on
short-term success.
Non-financial measures is concerned
with the organization's long-term
success.
(sample – for Airline Industry)
Balanced Measures
INTERNAL and EXTERNAL MEASURES
Internal performance measurement basically focuses on the comparing of
activities and processes to previous operations and/or goals. For example a
firm may compare the customer service with last year's performance as well
as this year's goals or target.
External performance measures typically ask relevant external groups to
evaluate various program activities – usually through surveys of individuals
within these groups – related to the services they have experienced (such as
perceptions of customer service delivered, perceptions of the ease or
efficiency of application processes, the accessibility of information
disseminated, etc.)
Learning and Growth Perspective
The Balance Scorecard:
From Strategy to Performance Measures
Performance Measures
Financial
Has our financial performance
improved?
Customer
Do customers recognize that we
are delivering more value?
Internal Business Processes
Have we improved key business
processes so that we can deliver
more value to customers?
Learning and Growth
Are we maintaining our ability to
change and improve?
What are our financial
goals?
What customers do
we want to serve and
how are we going to
win an retain them?
What internal
business processes
are critical to
providing value to
customers?
Vision
and
Strategy
The Balance Scorecard:
NON-FINANCIAL MEASURES
The Balance Scorecard and Compensation
Learning Objectives
•
Identify and differentiate the four perspectives of the
balance scorecard and formulate performance indicators to
evaluate, monitor and improve business performance.
•
Demonstrate and
understanding of how to
construct and use a
balanced scorecard.
•
Compute for operational
performance measures.
Results
Profits
Increase
Contribution
Increases
Results
Cars Sold
Increases
Results
Satisfaction
Increases
Time
Decreases
Learning Objectives
•
Identify and differentiate the four perspectives of the
balance scorecard and formulate performance indicators to
evaluate, monitor and improve business performance.
•
Demonstrate and
understanding of how to
construct and use a
balanced scorecard.
•
Compute for operational
performance measures.
Wait Time
Throughput Time
Delivery Cycle Time