Impact Of Balance Scorecard For Manager Job Performance Accounting Essay

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Introduction: The ways of doing business is changed in the business world recently. There are tremendous impacts of technological development, recession, economic challenges, competition and other factors in the business. Therefore human resource management and constant performance management has become a need to bring a vast development in the modern business.

Human resource planning is to managing, motivating and emphasis organizational people to accomplish specific organizational objective and goal at nearby and for future.'Human resource management is defined as a strategic and coherent approach to the management of an organization's most valued assets- the people working there who individually and collectively contribute to the atonement of its objective.'

Armstrong M (2006) . cording to Fisher et al. 'Human resource management involves all management decisions and practices that directly affect or influence the people, or human resources, who work for the organization. (Mullins Laurie J. 2005) .

The aim of performance measurement is to motivate the employees, create better decision making process, goals of an manger and firms are integrated, managers understand outcomes of their decision, monitors the goals that drives the persuasion the objectives of a firm . As it has been asserted above that firms uses BSC framework focuses on all combinations of elements to measure the performance needs to be liked with business strategy and goal , otherwise the critical success factors to form competitive advantage , therefore easily evaluate the performance .

Balanced Score Card : before 1992 there were no measurement standard to check standard of performance of a company , according to Robert Kaplan and David Norton " the Balanced scorecard measure that drive Performance " in Harvard Business Review created lot of attention for their proposed measure , which later become bestseller . The Balance Score Card is a strategic planning and measurement system used to align business activities to the vision and strategy of the organisation, improves internal and external communication and monitor organisational performance". The Balance Score card Institute , 2008.

A model of Balanced Score Card - Developed by Robert S Kaplan and David P Norton , January - February 1996.

Source - www.quickmba.com

In this report 2 journals / articles are given below :

I .Robert S Kaplan , David P Norton , ( 1996) Balanced Scorecard : Translating Strategy in to Action , Harvard Business Review

II. Laurie L . Swanson , Nancy J ( 2010 ) , The Relationship Between Balanced Scorecard Characteristics and Managers` Job Satisfaction , Journal of Managerial Issues .

Analysis of the article :

Journal I demonstrates how balance scorecard bring a positive or negative impact on the job performance. The Balanced scorecard method is a strategic approach to performance evaluation with 4 divisions like financial perspectives, customer satisfaction, internal business process and learning and growth need to be related with organisational objectives. Within these 4 perspectives / categories managers measures the performance of the organisation within different leading indicators of success to help future financial goal. It also helps achieve employee job satisfaction, customer satisfaction . It is certain that customer satisfaction leads to better financial outcomes in terms of incensement of profit.

To measure proper performance management the decision making process of managers , managers actions are the impact of performance of a company , therefore to measure performance measurement system is not only performance measurement but also all managerial activities , decisions , growth and goals of a firm , therefore all these depends on financial performance according to Kaplan and Norton , 1992 , 1996 .

The journal of Relationship Between Balanced Scorecard Characteristics and Managers` Job Satisfaction , Journal of Managerial Issues demonstrates that there are positive impact of BSC and their impacts are interrelated on manager's job satisfaction . It also asserts that if the effectiveness of BSC , its framework and strategy linkage has an impact on manager behaviour . Managers who use BSC framework establishes strong connections with strategy are better performed and informed about the desired actions of the organisation. It is more monitored , more organised , therefore managers get more job satisfaction . Apart from financial measurement there are some non financial aspects which are directly related to managers job satisfaction as it inspires better decision making process.

According to second article II , Harvard Business Review measurement do not mean that organisation can not be managed without measuring , measurement needs to be right , most organisations emphasis on financial performance of non financial performance perspectives , but right data , right time , right information and right measures are vital . This journal demonstrates the need of right measurement so it can ignore the burden of excessive information. Therefore organisation needs to set the target with effective motivation ignoring risky behaviour for better performance.

The business industry is full of risk because of high competition and uncertain environment hence the management is very risky. Any strategic ability of any business is to adopt with change responsibility for its efficiency, their culture is to adapt the change, taking risk and to achieve the strategic fit.

Comparative Discussion:

Financial Resource, Human Resource, Physical Resources, Intellectual Capital rresources are important for any organisation , what resources an organisation have is as much as important as what an organisation does with the resources , how it employs and deploys its resources - it all matter because the efficiency and effectiveness of these resources are related in the market to gain competitive advantage and superior performance and those are needed to meet the requirement of customers in the market , how they are managed with the knowledge , experience , and in between the cooperation of the people , their adaptability, their innovatory capacity, the relationship with customers , and suppliers , the experience and learning , about what works well and what does not . ( Johnson , G . Scholes 2005) .

Managers rely on common measures or unique performance measures. The use of BSC focuses on different perspectives of measurement like finance, The impact of BSC on managers are integrated with his or her actions and the development of organisation , there is influence of PM system through the use of BSC on manager's behaviours , actions .

From above description it can be demonstrated that as BSC develops the performance measurement within feedback mechanism, it enables managers to take strategic decisions with effective activities consistent with organisations objectives and goals , therefore efficient decision making process . BSC`s impacts on managers demonstrates the relation between BSC`s characteristics, linkages with organisational strategy and employee job satisfaction.

Job satisfaction is how an employee feels about his or her job , according to Banker el ed ,2000 there is a relation between job satisfaction and organisational growth . If an organisation a successful company it provides the necessary need of employees, hence job satisfaction. On the other hand systematic measurement process recognises the need of performance management. Lower turnover creates lower job satisfaction and lower turn up, lower turnup and therefore costs hiring and training investment.

The journal of Harvard Business Review emphasised more on the right measurement than the positive characteristics of BSC. Though BSC has its own strength to implement the performance measurement system positively still the organisation has to measure the performance right and there are some positive elements needed to use for BSC.

Strong leadership for creating positive environment to improve performance, introduce some appropriate set of principles, help break the barriers or fear of organisation if there is any, introduce appropriate knowledge sharing corporate culture where performance measurement system can be practiced in the right form are the vital elements for organisation so the performance measurement can be right . Above descriptions are the elements of the second article which have been targeted for right measurement whereas 1st article introduced the positive characteristics of BSC for performance management . From above discussions and analysis it can be imply that using BSc is not main target for measurement , but also making sure of its right use is also vital .

Though the use of BSC framework communication takes place in terms of feed back procedures and evaluation procedures help understand the required decision for change, the need of information gathering procedures increases the understanding of flaws of any systems or role of work and also help take necessary decision for change management.

Another effective characteristic of BSC framework is to measure the financial and non financial performance measurement by creating customer satisfaction by increasing profit margin and learning and growth. Long term financial measurement emphasis on long term success, therefore motivates managers more to take better decision to create long term value of the business.

Conclusion:

In conclusion it can be said that there are positive characteristics with BSC for performance development, but it can be argued that only BSC can not increase job satisfaction, for job satisfaction positive environment , leadership quality , motivational factors like job security . Therefore it is an issue argument to analyse also that what else are more important than balanced scorecard for incensement of job satisfaction.

Bibliography and Reference :

Banker , R D H Chang and M J Pizzini , 2004 " The Balanced Scorecard " : Judgemental Effects of Performance Measures Linked to Strategy , The Accounting Review : 79 : 1 : 1-23

Robinson P , (10 edition , 2007 ) Strategic management Formulation, Implementation and Control , Mc Graw Hill Press , printed in USA .

Johnson G & Scholes K , ( 1997 ,fourth Edition ) Explaining Corporate Strategy , Printed in Great Britain .

Robert S Kaplan , David P Norton , ( 1996) Balanced Scorecard : Translating Strategy in to Action , Harvard Business Review

Laurie L . Swanson , Nancy J ( 2010 ) , The Relationship Between Balanced Scorecard Characteristics and Managers` Job Satisfaction , Journal of Managerial Issues .

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