Performance measures-The balance scorecard.Although segment of a business may be measured by a single performance indicator such as Return on Investment (ROI), Profit or Cost variance, it might be more appreciate to use multiple measures of performance where each measure reflects a different aspect of achievement. Where multiple measures are used, several may be non-financial.
The most popular approach in current management thinking is the use of what is called a “balance scorecard” consisting of a variety of indicators both financial and non-financial.
As CIMA official terminology the balance scorecard is an approach to the provision of information to management to assist strategic policy formulate and achievement. It empresses the need to provide the users with a set of information which addresses all relevant areas of performance in an objective and unbiased fashion. The information provided may include both financial and non-financial elements, and areas such as profitability, customer satisfaction, internal efficiency and innovation.
No comments:
Post a Comment