Definition of balanced scorecard
An approach to performance measurement (popularized by Bob Kaplan and David Norton) that assumes no single performance measure can capture the success with which an entity’s strategic objectives have been achieved. Instead, balanced scorecard proponents advocate capturing a “dashboard” of several performance measures, which are typically:
- grouped into four to six functional categories (for example, customers, employees, processes, and growth)
- measured as outcomes that are linked to the strategic objectives of the entity
- balanced in terms of the type of outcome (for example, financial vs non-financial) and horizon (for example short-term vs long-term).