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Balanced Scorecard
The term "Balanced Scorecard" was coined by Kaplan and Norton to refer to a framework of financial and non-financial measures which attempts to give a more full and balanced picture of the performance of a firm.
The Balanced Scorecard is composed of four sections:
1. Financial Perspective - e.g. profit, share price.
2. Customer Perspective - e.g. sales, market share, warranty rate
3. Internal Performance Perspective - e.g. efficiency, leadtime
4. Innovation and Learning Perspective - e.g. new products
The idea is that a firm's progress in implementing a strategy can be represented by improvements on a variety of key measures. These measures must be carefully chosen to be in line with the firm's strategy and its plan for implementing the strategy.
The Balanced Scorecard approach can be applied in a tiered fashion to construct a performance measurement system for all levels of a company. Many firms use it in their reward/bonus system for their employees.
A simple balanced scorecard can be found under the "Year Ahead" menu.