“Performance Measurement System Implementation…” by Valmohammadi

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Introduction

Indisputably, departmentalization is an essential aspect of an organization, which ensures that ever there is optimal, effective, and efficient production. Every organization needs to establish a human resource department in order to ensure that employees’ needs and demands are addressed and resolved amicably. With increased and advanced technology, organizations continue to opt for information systems for purposes of ensuring that all the needs and wants of the employees are as well as the objectives, aims, and targets of an organization are effective and timely. Measurement information systems are at adding value especially within the contributions towards the attainment of set missions, visions, and objectives. Nonetheless, many contemporary organizations continue to face serious challenges in respect to identifying the performance of human resource information systems.

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Motivated by such challenges, Valmohammadi and Servati (2011) decided to identify how balanced scorecards, strategic management and measurement tools could be used in enhancing the effectiveness and efficiency of performance measurement information systems. The article defines how balanced scorecard can be used as a measurement system within performance measurement systems. Some of the uses of a balanced scorecard as discussed by Valmohammadi and Servati (2011) include justification of costs as well as highlighting the effectiveness of performance measurement and information systems. In addition, Valmohammadi and Servati (2011) argue specifically on the Kaplan-Norton balanced scorecard as a perfect framework for identification as well as alignment of goals, objectives, visions, and missions of an organization.

Moreover, the article argues that it is usually necessary to collect baseline information that would enhance measurements in respect to set measurements within the organization in question. Valmohammadi and Servati (2011) also confirm the need to have adequate statistical methods for purposes of providing more analysis and understanding of performance within an organization. Therefore, Valmohammadi and Servati (2011) assert that other than balance scorecard organizations may use statistical methods in order to identify the effectiveness and efficiency of performance measurement systems. Indeed, this article has significantly explained and elaborated on the significance of a balanced scorecard for purposes of measuring the effectiveness and efficiency of human resource information systems within a contemporary organization.

Relevance of the Article

Reading through the article, there is enough evidence that it is relevant to the unit’s subject matter of “contemporary approaches to measurements and managing performance” as illustrated in chapter seven (Langfield-Smith, Thorne, & Hilton, 2012). According to Langfield-Smith, Thorne, and Hilton (2012), it is crucial for organizations to enhance the effectiveness and efficiency of performance for not only the employees but also across the operational aspects of the firm. It is also true from the concepts discussed by Langfield-Smith, Thorne, and Hilton (2012) that contemporary business organizations or firms continue to experience challenges relating to measurement and managing performance amongst the employees, as well as information systems. There are many approaches to measurements as well as managing performance, which are by Langfield-Smith, Thorne, and Hilton (2012). These same topics or concepts are relevantly explained by Valmohammadi and Servati (2011).

Valmohammadi and Servati (2011) establish the fact that the third-generation balanced scorecard (BSC) is a powerful tool within the designing and implementation of performance management systems, especially in contemporary organizations. Using various organizations from Iran and Thai, Valmohammadi and Servati (2011) assert that balanced scorecard can be used in achieving the strategies and visions of an organization. Attainment of the strategies, vision, mission, objectives and set targets is essential for purposes of obtaining profitability, expansion, and growth. Many contemporary organizations continue to face serious challenges from increased competition, which hinder them (existing firms) from expanding and growing. Consequently, this has called for the introduction and incorporation of strategic tools such as the balanced scorecard, which will assist in achieving the same strategies, visions, mission, objectives, and purposes of the organizations under scrutiny.

Information concerning the combination of statistical methods and balance scorecard discussed in this article is relevant to the contemporary approaches to measurements and managing performance. It is clear from the concepts discussed by Valmohammadi and Servati (2011) in the article and Langfield-Smith, Thorne, and Hilton (2012) in the book that measuring performance is a monumental challenge to many contemporary organizations, hence the need to identify better approaches to achieving the same objective. It is in respect to this that Langfield-Smith, Thorne, and Hilton (2012) propose the use of a balanced scorecard whilst Valmohammadi and Servati (2011) confirm that, for the best results, there is a need to combine more than one approach. Consequently, Valmohammadi and Servati (2011) provide an alternative of using both statistical methods and a balanced scorecard. Such concepts are by Wesley and Friedman (2002) and Alsyouf (2006).

Wesley and Friedman (2002) discuss the impact of using a balanced scorecard within a human resource information system. It is true that one of the most challenging aspects of human resource divisions of contemporary organizations is the diversity of needs and wants of the employees (Alsyouf, 2006). What’s more, employees’ productivity is in most instances considered to be below optimal, ineffective, and inefficient. Alsyouf (2006) adds that a balanced scorecard is an indispensable strategic tool for fulfilling the strategies, objectives, and aims of an organization. Langfield-Smith, Thorne, and Hilton (2012) and Wesley and Friedman (2002) vividly describe the significance of a balanced scorecard as one of the strategic tools that enhance performance. Hence, the information provided within the article and supported by other studies is relevant to the subject matter of the unit.

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Other than measurement of performance, another aspect that has spurred a lot of interest from different scholars is the management of effective and efficient performance. Even though organizations may find it easy to measure the performance of various operative actions, individuals, and activities, there are cases when managing such performances is a challenging task (Alsyouf, 2006). In their article, Valmohammadi and Servati (2011) provide relevant information on how to manage performance. It is noteworthy that organizations should not only measure performance but also develop effective ways of managing the achieved performance. According to Valmohammadi and Servati (2011), a combination of both statistical models and a balanced scorecard.

There is no doubt therefore that the information provided by Valmohammadi and Servati (2011) in the article, “performance measurement system implementation using a balanced scorecard and statistical methods”, is relevant to the subject matter of the unit as discussed by Langfield-Smith, Thorne, and Hilton (2012). Supported by different scholars, the two sets of authors discuss adequate applications of balanced scorecards in measuring and managing the performance of activities and actions of various individuals. Therefore, the relevancy of information and concepts discussed by Valmohammadi and Servati (2011) is indisputable.

Relationship between the Article and Unit’s Subject Matter

Comparison

The concepts of balance scorecard discussed in the article by Valmohammadi and Servati (2011) correlate with the concepts discussed by Langfield-Smith, Thorne, and Hilton (2012). In both schools of thought, it is clear that a balanced scorecard is one of the most recent strategic tools applied in measuring and managing performance. Based on the discussions and analyses done by the two sets of authors, there is a consensus that a balanced scorecard transforms strategies into actions. A majority of organizations that would wish to have high productivity, profitability, and efficient attainment of set targets, objectives, or goals need specific strategic tools such as the balance (Valmohammadi & Servati, 2011). Balance scorecard can be evaluated on the basis of level, multiple measures, perspectives, suitability, strategy, and suitability as it is by the various authors under study.

According to both sets of authors, a balanced scorecard is applicable at the senior management level. In most cases, the junior managers may be unaware of the required aspects of a balanced scorecard (Langfield-Smith, Thorne, & Hilton, 2012; and Valmohammadi & Servati, 2011). Therefore, such managers may not be in a position of selecting an appropriate measuring or technique to employ on the balanced scorecard for purposes of measuring the performance of the organization in question. Based on the analyses carried out by the two authors, it is evident that despite its applications at the senior management level, a balanced scorecard is a strategic management tool, which aims at assisting firms or organizations with questions to employ the right measure or technique in effectively attaining specific targets, objectives or aims.

Other prominent features of the balance scorecard discussed and analyzed by the two sets of authors include multiplicity, subjectivity, suitability, and strategic perspectives. Langfield-Smith, Thorne, and Hilton (2012) and Valmohammadi and Servati (2011) confirm that other than the fact that balance scorecard employs the use of multiple measures in a bid to establish the performance of an organization, it is clear that information used involved data garnered from different resources for purposes of making future improvements. Whilst supported by Chen and Jones (2009), Valmohammadi and Servati (2011) and Langfield-Smith, Thorne, and Hilton (2012) also confirm the strategic nature of a balanced scorecard. According to the analyses, a balanced scorecard is strategic in nature hence motivated by visible aspects or factors within an organization in question.

Amazingly, the application of a balanced scorecard is at the discretion of managers and decision-makers. As a result, all the information employed in making such useful decisions is from within the firm (Langfield-Smith, Thorne, & Hilton, 2012 and Valmohammadi & Servati, 2011). Unlike many other strategic tools applied in measuring the effectiveness of performance systems, a balanced scorecard is an effective strategic tool that will provide the same information or results under different sets of influencing factors as long as the dependent and independent variables remain the same. Notably, balance scorecard as discussed by Valmohammadi and Servati (2011) and Langfield-Smith, Thorne, and Hilton (2012) using actual data inputs from the firm hence the consistency in results obtained even when the surrounding aspects or factors are without interfering with the variables under measurements.

Lastly, the article’s concepts of a balanced scorecard compare to the concepts of the book in respect to contemporary approaches to measuring and managing performance. Both the article and the book point out that balanced scorecards as strategic tools are only suitable for large organizations given the complex and lengthy processes involved, which are always extremely expensive. Furthermore, the development and applications of balance scorecards require some level of expatriates knowledge, which is in large organizations. Hence, it is worth noting that concepts from the article and the book have various similarities.

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Contrast

Even though there are similarities between the concepts of the article and the book, there is some contrast. Whereas Langfield-Smith, Thorne, and Hilton (2012) argue that a balanced scorecard is an efficient strategic tool for measuring and managing performance, Valmohammadi and Servati (2011) on the other hand believe that balanced scorecard can only be effective if other strategic tools are alongside such as statistical models. Consequently, Valmohammadi and Servati (2011) confirm the importance of combining several strategic tools in a bid to find better results from measuring and managing performance. Indeed, contemporary firms continue to meet various aspects of challenges hence the need to come up with effective strategic tools that will transform strategies into actions.

New Learning from the Article

On the basis of the article, it is clear that adequate and relevant data affects the results of measuring and managing performance. For instance, whereas qualitative data is relevant for balanced scorecards, quantitative data are relevant for statistical models. Moreover, there are various alternatives that can be applied in measuring and managing performance. It is essential to know these alternatives for purposes of ensuring the availability of diverse strategic tools as well as being able to apply different tools in different settings. The articles’ discussions and analyses also provide adequate information and knowledge on the applicability and flexibility of different strategic tools. Even though the article confirms that a balanced scorecard is tremendously useful within large organizations, small and medium enterprises could also try the strategic tool in measuring and managing performance. This is due to the flexibility of the strategic tool. Lastly, the article has established that there is a massive impact of measuring and managing performance within organizations especially contemporary business organizations, which continue to face different challenges. It is therefore paramount for managers and decision-makers to get involved in finding the best strategic tool for the purposes of measuring and managing performance.

Conclusion

According to the above discussions, it is worth noting that measuring and managing performance within an organization is extraordinarily vital. Every manager and decision-maker needs to always ensure that there are relevant and adequate data for purposes of measuring and managing performance. The discussion also identifies the fact that there are different strategic tools applied in measuring and managing performance. Balance scorecards and statistical models are examples of strategic tools applied in measuring and managing performance. Irrespective of the size of the organization, there is a need to engage in measuring and managing performance. Measuring and managing performance in an organization will undoubtedly have a significant impact in transforming strategies into actions. Once strategies turn into actions, an organization becomes capable of meeting its set objectives, targets, aims, vision, and mission. The attainment of such concepts will not only lead to growth and expansion but also the fulfillment of the purposes for the formation of the organization in question. Indeed, the article provides adequate knowledge and information regarding measurement and managing of performance using the balanced scorecard and the statistical models. It is therefore recommended that every manager or decision-maker should be involved in such actions or activities for purposes of ensuring that an organization is on track.

References

Alsyouf, I. (2006). Measuring maintenance performance using a balanced scorecard approach. Journal of Quality in Maintenance Engineering, 12 (2), 133-149.

Chen, C. C. & Jones, K. (2009). Are employees Buying The Balanced Scorecard? 2009. 11, p36-44.

Langfield-Smith, K. H., Thorne, R. & Hilton (2012). Management Accounting: Information for Creating and Managing Value, 6th Edition, McGraw-Hill.

Valmohammadi, C., & Servati, A. (2011). Performance measurement system implementation using balanced scorecard and statistical methods. International Journal of Productivity and Performance Management, 60 (5), 493-511.

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Wesley, O. H., & Friedman, L. (2002). Use the balanced scorecard to measure the performance of your HR information system. Public Personnel Management, 31 (4), 543-557.

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