2. Balanced Scorecard Model
According to balanced scorecard performance measurement system model, all levels of activities are performed toward achieving organizational objectives; these activities are measured based on one or four strong perspectives.
Customer Perspective: Organizations should have goals from the perspective of the customers like customer satisfaction levels, timely delivery of a quality product or service. In order to achieve these customer perspective goals, companies need a system to measure the performance of activities like order fill rate, delivery date and order status. Measurement tools like customer surveys and analysis help a great deal to keep up with attaining the organization’s goals. For example, companies like Starbucks or McDonald's use social media (Facebook, Twitter) to continuously measure their goals on customer perspective.
Internal Project Perspective: Measuring the performance of internal projects that boost overall excellence is critical for any organization to grow. Internal projects are the pillars that hold the organization together. Develop a model that measures the internal project and functions like HR, finance, operations and administration. For example, circulate a questionnaire to find out what motivates your employees. This process helps to measure a company’s performance affecting employee’s growth, and in turn, decreases employee attrition rate.
Finance Perspective: Revenue building is the key reason we have companies and various businesses in this world. Measuring various finance related activities is compulsive for companies to be sustainable in the market. The balanced scorecard performance measurement system allows companies to install a system to monitor and measure the key finance activities such as cash flow, return on investment, market share, sales and revenue growth and other income.
Innovation and Learning Perspective: Organization’s objectives should aim at achieving a competitive advantage by measuring their performance on development of the product to market time, revenue from new product introduction and manufacturing functional excellence. The performance measurement model needs to be designed to measure the tasks related to innovative achievements through continuous learning.
These are considered the four key components of a balanced scorecard performance measurement system model.