Performance Measurement Systems of Organizations Essay

Performance bill Systems of Organizations - Essay ExampleThe different types of execution of instrument measures ar input measures, process measures, output measures, outcome measures and regard measures.The organizations can develop their own customised systems to meet their specific requirements and circumstances or utilize a consider of process focusing models and tools to develop their framework. The major performance measurement systems in use today are fit carte du jour, Activity-based Costing and Management, Investors in People Standard, Quality Management, Charter Mark and Performance Prism. The frameworks are explained in the following sections.A Balanced placard defines what management means by performance and measures whether management is achieving sought after results. Kaplan and Norton (1992) noted that it was designed to improve current performance measurement systems by providing alternatives to managing organisational performance but through financial meas ures. According to them (1996), the name reflected the balance mingled with short- and semipermanent objectives, between financial and non-financial measures, between lagging and leading indicators, and between external and internal performance perspectives.According to CIMA (2005) official definition, the Balanced scorecard is an approach to the provision of information to the management to assist strategic policy formulation and achievement. A Balanced scorecard is used to clarify or update a businesss strategy, link strategic objectives to long-term targets and annual budgets, track the key elements of the business strategy, incorporate strategic objectives into resource allocation processes, facilitate organizational change, compare performance of geographically diverse business units and increase companywide understanding of the corporate vision and strategy. evolution of the patternThe concept was originated by Robert Kaplan and David Norton (1992) as a performance measureme nt framework that added strategic non-financial performance measures to traditional financial metrics to give managers and executives a more balanced view of organizational performance.The developments in the concept are as followsa. 1st generation- The Balanced scorecard designs feature a small number of performance measures typically spread across four perspectives, namely financial, customer, internal processes and learning and growth, as proposed by Kaplan & Norton (1996). b. second generation- New Balanced scorecard designs illustrate how the various objectives are related using a draw called the strategic linkage model or strategy map (Kaplan & Norton, 2004). Using objectives and linkages helps to provide a stronger basis for choosing measures and for justifying these choices to others. c. 3rd generation- The third generation of Balanced scorecard designs were developed in 2000. These are easier to develop, implement and use than any earlier version. Balanced scorecard has be come the focus of a wider strategic management process - a framework for strategic management and control rather than just a performance measurement device.PerspectivesThe Balanced scorecard sets out a framework of four key perspectives (Kaplan and Norton, 1996), as shown in the following figure. Figure 1 - Perspectives of Balanced