Balanced Scorecard Essay

Introduction Performance management systems are often designed to enable organizations to plan, measure and control their performance, so that decisions, resources and activities can be better aligned with business strategies to achieve desired results and create shareholder value. The Balanced Scorecard is a performance tool using financial and nonfinancial measures. It provides an organization with ways to develop and evaluate strategic objectives and goals. For the past two decades, the Balanced Scorecard (BSC) has been proposed as an integrated framework for the implementation of financial and nonfinancial performance measures that helps organizations align their initiatives with the organization’s strategy (Kaplan ; Norton, 1992). The United States Postal Service delivers more mail to more addresses in a larger geographical area than any other post in the world. The Postal Service delivers to more than152 million homes, businesses and Post Office boxes in every state, city, town and borough in this country. Everyone living in the United States and its territories has access to postal products and services and pays the same postage regardless of their location (USPS, 2014). This paper will examine the effectiveness of the implementation of the balanced score card approach. Key Issues for Discussion Explain how the Voice of the Employee supports improved internal processes (Voice of the Business), and how the Voice of the Business supports customer satisfaction (Voice of the Customer). Employees have a huge impact on their organization’s financial results. When employees are empowered to make decisions they share information relating to the strategic processes and direction of that organization. When it comes to carrying out the message and mission of the organization the voice of the employee is very crucial. Through empowerment, the employees are able to create an opportunity to show management how they will apply the company vision to their daily task. The voice of the business relates to information derived from financial data. This data can be used to indentify weakness in certain market areas and the status of the research and development process. In order to move the organization forward or closer to its overall objectives, analyst must understand the relevance of the balanced scorecard process. The voice of the customer indentifies the needs of the customer which are keys to the strategy to defining which processes can be viewed as value added products or services. The customers are a continuous source of feedback both good and bad. Customer feedback can also provide new opportunities to identify and develop new products. Kaplan and Norton advocated a well-connected map ping that leads from an organization’s main strategy to the four perspectives of the balanced scorecard: Financial, Customer Satisfaction, Internal Process, and Learning and Growth. Each element works to support the strategic objectives in a linked process. Customer satisfaction leads to the desired financial outcome, which in the case of the Postal Service is sufficient revenue to support the universal delivery service mission (Evans, Lindsay, 2011). While Figure 8. 14 shows only representative measures associated with the balanced scorecard, suggest some other measures that might be included using your knowledge of postal operations. Based on my personal experience and knowledge of the United States Postal Service, I would suggest that the organization add some additional measures to it balanced scorecard. The organization should measure customer complaints relating to package handling and damaged goods. Damaged packages generally lead to claims brought forward by customers which is certainly a value associated with it that should be tracked and measured. The organization should also measure and analyze the effects of the employee turnover rate. Employee replacement cost can have a huge affect on the financial element. Cost associated with the orientation and training of a new employee as well as the cost associated with employee separation can have an effect on the bottom-line. Advantages and Disadvantages of Using a Balanced Scorecard Some organizations have a difficult time establishing a process that can translate its strategic vision into concrete goals and actions. There are clearly some beneficial advantages to applying the balanced scorecard approach. Some of these benefits include gaining a cross organizational team that will open channels of communications. The company will have enthusiastic people who are focused on carrying out the organization’s mission and commitment to quality. Also, the company will gain a unique competitive advantage relating to reduce time frames, improved decisions and better solutions. Most importantly, initiatives are continually measured and evaluated against industry standards. There can be some disadvantages as well. The balanced scorecard takes a lot of planning and forethought. Defining clearly stated objectives and setting goals are crucial to the process. There can be resistance from employees or even management. Some individuals may see the implementation as a threat or indication of a lack of performance on their part. While the balanced scorecard gives an extensive overview of the organization’s performance, it does not give recommendations regarding how to resolve discovered problem performance areas. Conclusion The case study involving the United States Postal Service presents evidence that the balanced scorecard approach can have a positive effect on an organizations overall performance. If integrated successfully, the balance scorecard will be a tool that ensures clarity and consistency across all departments or individuals involved. Solving quality management issues rely on the right approach and planning. Understanding the importance of the linkage among all four of the balanced scorecard is crucial to its success. Special attention should be given to the proper implementation and cultivation of intangible assets relating to learning and growth. The USPS has improved its service and has increased customer satisfaction. First-class mail performance has improved to over 95 percent of overnight mail being delivered on time, with improvements in other categories of first-class mail (Evans, Lindsay, 2011).