Performance Scorecard

Skill level: Intermediate, advanced

Description

A performance scorecard is a representation of an organization’s progress over time toward specific goals. Widely used throughout both the public and private sectors, the performance scorecard is an essential component of the balanced scorecard methodology. It is also used independently of the balanced scorecard methodology to monitor progress toward any organizational goal.

The concept of performance scorecards in general is to track overall achievement and performance using the following tools: key performance indicators (KPI) and critical success measures.

Benefits

  • Answer the question of “How are we doing?”
  • Simple visual aids for tracking performance over time
  • Easily adaptable to any situation
  • Vital component of organization performance measurement

How to Use

  • Step 1.  Define goals and objectives for each key indicator.
  • Step 2.  Establish the various levels of performance in relation to the target.
  • Step 3.  Create a template, table, or spreadsheet to track performance.
  • Step 4.  If using Microsoft Excel, use conditional formatting to generate the icon.
  • Step 5.  Track and discuss results for both performing and non-performing metrics.

Relevant Definitions

Balanced scorecard methodology: A method for tracking several key metrics of an organization, usually displayed in a table showing four perspectives: customer, financial, operational, and learning and development.

Key performance indicators (KPI): Quantitative measurements to track performance over time.

Example

A retail store is tracking its performance on a quarterly basis. Three key performance indicators are used: gross sales, gross margin (5%), and cost of goods sold.

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