A framework to arrive at a unique performance measurement score for the balanced scorecard

For any business activity, it is essential to identify the required performance measures which have strategic implications. The Balanced Scorecard (BSC) is a very useful performance measurement system. But there is no distinction made with regard to the importance provided to the perspectives under BSC. Furthermore, for some metrics, the actual performance may be greater than the targeted performance and for some, it is less. This makes it unclear for decision makers whether the firm had achieved the strategic intent in totality or not. In this article, the weightages for the perspectives and subcriteria are arrived at through the fuzzy Analytical Hierarchy Process (AHP) and an analytical expression developed by the author. This model further helps in arriving at a unified score to portray the overall performance of the organisation. The developed model is validated through a real-life example.

[1]  Ludmil Mikhailov,et al.  Evaluation of services using a fuzzy analytic hierarchy process , 2004, Appl. Soft Comput..

[2]  Steven E. Salterio,et al.  The Balanced Scorecard: Judgmental Effects of Common and Unique Performance Measures , 2000 .

[3]  R. Kaplan,et al.  The strategy-focused organization , 2000 .

[4]  M. Punniyamoorthy,et al.  A Strategic Decision Model for the Justification of Technology Selection , 2003 .

[5]  M. Punniyamoorthy,et al.  Balanced score for the balanced scorecard: a benchmarking tool , 2008 .

[6]  D. Simester,et al.  Customer Satisfaction Incentives , 1994 .

[7]  R. Kaplan,et al.  The Balanced Scorecard: Translating Strategy into Action , 1996 .

[8]  R. Anthony,et al.  Management Control Systems , 2020, Management Control Systems and Tools for Internationalization Success.

[9]  R. Camp.  Business process benchmarking : finding and implementing best practices , 1995 .

[10]  Valerie Belton,et al.  Moving from performance measurement to performance management , 2003 .

[11]  D. F. Gibson,et al.  A Quantified Model for Facility Site Selection-Application to a Multiplant Location Problem , 1972 .

[12]  Robert S. Kaplan,et al.  Devising a balanced scorecard matched to business strategy , 1994 .

[13]  P. Hepworth,et al.  Weighing it up ‐ a literature review for the balanced scorecard , 1998 .

[14]  R. Kaplan,et al.  The balanced scorecard--measures that drive performance. , 2015, Harvard business review.

[15]  Ludmil Mikhailov,et al.  Deriving priorities from fuzzy pairwise comparison judgements , 2003, Fuzzy Sets Syst..

[16]  Jun Wu,et al.  Selection of optimum maintenance strategies based on a fuzzy analytic hierarchy process , 2007 .

[17]  Dirk Sliwka,et al.  On the Use of Nonfinancial Performance Measures in Management Compensation , 2002 .

[18]  M. Punniyamoorthy,et al.  Justification of Advanced Manufacturing Technologies (AMT) , 2002 .

[19]  D. Larcker,et al.  Innovations in Performance Measurement: Trends and Research Implications , 1998 .

[20]  Lawrence M. Seiford,et al.  Models for performance benchmarking: Measuring the effect of e-business activities on banking performance , 2004 .

[21]  Stanley Lieberson,et al.  Making It Count: The Improvement of Social Research and Theory , 1987 .

[22]  Zeki Ayağ,et al.  A fuzzy AHP-based simulation approach to concept evaluation in a NPD environment , 2005 .

[23]  Ludmil Mikhailov,et al.  A fuzzy programming method for deriving priorities in the analytic hierarchy process , 2000, J. Oper. Res. Soc..

[24]  Srikant M. Datar,et al.  Balancing Performance Measures , 2001 .

[25]  Rifat Gürcan Özdemir,et al.  A Fuzzy AHP Approach to Evaluating Machine Tool Alternatives , 2006, J. Intell. Manuf..