Page 307 - Microsoft Word - 00 ACCA F2 Prelims.docx

Performance measurement techniques

The balanced scorecard

4.1 Definition

To get an effective system of performance appraisal a business should use a
combination of financial and non-financial measures.

One of the major developments in performance measurement techniques in recent
years that has been widely adopted is the balanced scorecard.

The concept was developed by Kaplan and Norton, 1993 at Harvard. It is a device for
planning that enables managers to set a range of targets linked with appropriate
objectives and performance measures.

4.2 The four perspectives

 financial

 customer

 internal business processes

 learning and growth.

301