Balanced Scorecard in Performance Management

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Balanced Scorecard is concept that is used in performance management as a tool to automatically manage performance and keeps track of the appropriateness of the execution of the tasks and activities by the workforce depending on their capacities and also helps in monitoring the consequences that arise from these activities and decisions made (Gumbus, Johnson, & Susan, 2003). As a human performance dynamic tool of managing performance, balanced scorecard is universally acclaimed through its use in annual surveys and has quickly gained popularity in English speaking nations of the West as well as some Scandinavian countries where it began being used from the early 1990s (Niven, 2005). This paper looks at different perspectives of a scorecard in the view of discussing the importance of all the perspectives as postulated by different authorities.

Components of the learning and growth perspective

Susan Johnson who is a president of a US based company emphasizes on the perspective of learning and growth. This perspective focuses on three major objectives, which are human capital, organizational capital and finally information capital. These aspects of a scorecard are discussed below as follows:

Human Capital

As we look at today’s most important factor for making business decisions is knowledge known at the time of making the decision. In the past it used to be land and then capital which has since changed. Without looking at whether it is a private or a public organization or not-for-profit organization or profit organizations, the same criterion applies when making decisions. Currently in the world’s economy intangible assets are seen as the drivers that lead to success. Hence Susan ensures that her team has the skills and knowledge needed so as to excel in the human capital setting. In so doing the employees possess skills that match Futura’s unique strategy which enables them to outdo their competitors. Futura has undertaken a mechanism that helps the company retain the best people and devotes its self to the customer (Niven, 2005).

Information Capital

Technology has a big impact on the economy as it has become a necessity in everyone’s life not leaving out businesses. In this modernity, information is the hub that moves economies where it transforms the performance of companies through the harnessing of data and using it for learning and formulation of strategies to ensure their profitability. This capacity is a great measure of the performance of the company as regards the technology it uses to optimize its operations and performance. The strategy to be executed is dependent on the ease with which information is disseminated across to all players in the company (Niven, 2005).

Organization Capital

This is rounded in the mind and the heart of the people of that specific organization and it monitors its ability to evolve and grow. It helps sustain long term prosperity and today’s success. This is all in the organizations culture, the company’s leadership, how people match with the set goals and finally the ability of employees to share information (Niven, 2005).


When looking at human capital the measurements done here are whether the employees have the right kind of skill and whether it is of the right level. This is done through comparing the requirements that are needed to carry out jobs effectively and the organization’s capabilities. The difference is called the competency gap. For information readiness it is all about how the organization’s IT portfolio is, its infrastructure and how well it is structured to meet its important internal operations.

Though this may prove to be difficult to understand and measure, most successful companies have maintained a culture whereby employees internalize the mission, the organization’s mission, vision and the core values required to reach the organization’s goals (Rodney & Biersteker, 2003). Most of these organizations have great leadership at all levels to drive all people to the meant goal. These organizations also promote team work in the sharing of the strategic knowledge all over the organization. Futura uses several surveys in order to measure and evaluate the company’s learning and growth. The birthday review –this occurs at the month of the employee’s birthday is done by a HR representative and checks on the employee’s work climate, his achievements and communication (Gumbus, Johnson, & Susan, 2003).

The representative gets the negative and positive issues of the working issues of the employee. There is a follow-up form that recommends the action to be taken and in so doing the employee see the organization takes their thoughts seriously. Leadership survey is done annually and seeks to find out from the employees how the manager in charge can improve effectiveness leading to a two way communication through improved leadership and management skills (Gumbus, Johnson, & Susan, 2003)

The annual performance and personal development review seeks to recognize employees’ achievements, as well as helping identify where the employee has improved and helps set out the expectations of the specific employee. Futura is also very keen on customer service which highly depends on hiring employees that match the company values and they also retain employees with excellent customer service. They conduct a survey by calling 10 customers and enquire about Futura’s service.

For financial matters, the group has a tool that helps analyze the customers’ cost per unit so as to get the profitability between the customers. During monthly report meetings it communicates the organization’s financial statements and compares it with consumer’s profitability thus driving the company’s behavior (Rodney & Biersteker, 2003). Internal operations is all about safety where the aim is to minimize the number of insurance claims (Gumbus, Johnson, & Susan, 2003)


Futura’s approach makes good business sense in focusing more on employees. It aims at retaining employees and this encourages employees. The company benefits since it does not have to lose money on advertisement for new positions and time when training the new employees. Every employee is expected to contribute to the success of the organization which is in return passed on to the customer. Having the right equipments needs people with the right skills so that production may be done effectively and efficiently. If more businesses adopt the learning and growth perspective improvement they will get more returns without having to hire more employees.


These measures wholesomely capture the central concept of the perspective of learning and growth especially since they have captured well the two central themes of the perspective which are performance effectiveness and efficacy. When employees are well trained and possess the right kind of skills for the position they improve productivity which increases profitability through increased sales. All these measures touch all the features of an organization: the capital of an organization, the human resource, technology part is all catered for.


Gumbus, A., Johnson, M., & Susan, D. (2003). The Balanced Scorecard At Futura Industries. Web.

Niven, N. (2005). Learning and Growth Perspective. Web.

Rodney, B., & Biersteker, T. (2003). The Emergence of Private Authority in Global Governance. Cambridge Studies in International Relations, 6 (6), 203-230.

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