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Four key steps to follow when implementing a strategic balanced scorecard approach to your performance management system

by , 02 July 2014
If you're implementing a strategic balanced scorecard approach to your performance management system, you're on the right track.

Experts at the Practical Guide to Human Resources Management say this approach allows you to execute your organisation's strategy by cascading overall organisational objectives throughout the organisation.

They add that this creates an understanding of the role and objectives of each department, team and individual in achieving the business strategy.

Continue reading to find out the four key steps you need to follow when implementing a strategic balanced scorecard approach to your performance management system.

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Take these four steps when you implement a strategic balanced scorecard approach to your performance management system

Step #1: Establish strategic focus

Your executive team must clearly define and commit to the organisation's vision and mission.

Step #2: Translate the vision/mission into strategic objectives using a strategy map

Unpack the vision/mission into the set of strategic objectives you want your company to focus on and reach. These strategic objectives collectively form your company's strategy.

Step #3: Analyse the strategic objectives into key measurements for the balanced scorecard

Make sure each strategic objective has measurements that answer the following question: 'What is an excellent quantitative measure that would illustrate how well the strategic objective is being met?'

Experts at the Practical Guide to Human Resources Management recommend you use a multi-disciplinary team to develop these key measures to ensure a holistic view of the different elements that are important to your company.

Step #4: Communication and change of management

A communication and change of management plan is crucial when you introduce a balanced scorecard. You and your management team must champion and communicate why you're introducing this approach.

Remember, a balanced scorecard works best with a participative management style.

There you have it: Overall, there are seven steps to implementing a strategic balanced scorecard approach to your performance management system. Check out the Practical Guide to Human Resources Management to discover the final three steps so you can ensure your balanced scorecard is effective.

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