How to calculate performance indicators step-by-step
Title: How to calculate performance indicators step-by-step.
This document is a part of BSC Toolkit.
Pages number: 3
Summary: Balanced Scorecard is a well-known concept and it’s easy to find helpful articles about what this concept is. Balanced Scorecard projections and perspectives are also talked about much. Business professionals lack essential information about real-life metrics and information on how to build actual scorecard, which supports weights and scores, which allows calculating the performance values. This whitepaper is a Balanced Scorecard design toolkit, which contains some “how-to” ideas.
- Measuring business performance with Balanced Scorecard concept. Balanced Scorecard helps to measure performance and share business goals.
- Balanced Scorecard Toolkit: Perspectives and Metrics. Four must-use perspectives to describe any business unit. Always need to start with these metric groups.
- Balanced Scorecard Toolkit: Weights and Scores. The Balanced Scorecard should be represented as a set of metrics, weights and scores.
- Balanced Scorecard Toolkit: Calculations. Steps to calculate performance using a given values of metric importance and user’s scores.
- Normalization and performance calculation. Calculating the performance value using normalized score and weight values.
- Conclusion. Remember to carefully evaluate Balanced Scorecard metrics
Abstract: Balanced Scorecard concept is about measure and control. The first step is to determine the goal of Balanced Scorecard: it should help to measure and control the performance of business unit; The next step is to assign a target performance values and develop a plan to archive the target results; The final step is controlling the performance, re-thinking business and separate business processes;
Balanced Scorecard must be a document packed with performance information. That’s why it is the best way to share management and business goal ideas with colleagues.
Building a Scorecard that works involve two main processes: suggesting a proper metrics and calculating the total performance;
Metrics should be designed by key managers; suggested metrics should be carefully evaluated in action. As for calculating performance, start with some simpler tools, such as spreadsheet processor to describe the Balanced Scorecard of the business unit and calculate the performance.