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Ramdeen, Sweden
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Balanced Scorecard in Public Sector
The Balanced Scorecard has been proven a success in corporate companies because the unit of measure is based on financial success. However, is it more difficult to identify the unit of measure in the public sector, mainly because the unit of measurement is not always financial, depending on the various levels of government. This is my opinion based on the experience from the public sector in developing countries.
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Ashok A kella
Finance Manager, India
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BSC in Public Sector: Social and State Welfare Aspects The BSC in public sector is equally useful for performance recording.
However, the criteria for standardizing the measurement unit are indeed different, with reduced importance to financial performance and more room for social as well as state welfare aspects.
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Daniel Briones, Argentina
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Public Sector BSC: Collecting the Data I worked with the BSC at a Department of Housing and Urban Development in my country. The main trouble that we had was collecting the data from the various sources, but not to define the units of measure.
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Ana, Brazil
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Dimensions of BSC in Public Sector A unit of measurement is not just used for financial issues. When we talk about performance in government we have to remember the following dimensions: financial, operational, political and social besides of the perspectives (employee, operational, financial,citizens).
The BSC is a good methodology for the Public Sector too, even in the developing countries.
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Fraoua, France
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BSC Measurements in Public Sector It depends on the sector the measurement is done. In some cases it can be purely financial, and in some case the performance must be measured by a social indicator.
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Ian Black, UK
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Balance The whole point of "balance" is to remove the emphasis from financial matters, so achievement of training, coaching, staff development etc are just as relevant as say revenue.
Even though the units of measurement may be brought back to a financial base, the underlying performance is the critical element. So there is no problem with the Public Sector....
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Owen Skae, Switzerland
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Mitigate this Challenge by Keeping It Simple It is important to note that the the BSC can be applied wherever a strategy has been formulated & has to be implemented. As Norton and Kaplan say, "you can't manage what you can't measure and measure what you can't describe".
I have seen the BSC being used for National Strategies incorporating a multi-institutional approach. The difficulty of data collection and institutional buy-in can be mitigated by keeping the measures simple.
E.g. in working with a number of service providers who assist exporters to find export markets, I applied a three step approach:
1. Is the service available? (as expressed as a need by the exporter) e.g. directory of contacts, web-based or face to face client adviser
2. Is the service being used? e.g. how many clients have accessed the service? What frequency?
3. What is the impact of the usage? e.g. Has there been an increase in sales? Over what time horizon?
Once a simple baseline is established, then you could build upon it.
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Marcel van der Heever, South Africa
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BSC Challenges in the Public Sector The BSC framework can be applied to any organisation, whether private or public sector based. The problem in the public sector is that leadership at senior level changes as often as the political order changes, so, continuity of strategy and commitment to measurement becomes a much greater challenge than within the private sector. Another key problem in the public sector is the assumption that legal compliance is more important than operational output. or service delivery. Operational output, in turn, is often severly affected by inefficient, non-standardized and undocumented business processes - all affecting the ability communicate effectively about performance and for everyone to learn/innovate. Even if all of these challenges are overcome, one still has to find reliable data.
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Stephen Pitt
Consultant, United Kingdom
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Limitations of BSC in Nor for Profit Sector The key limitation of BSC in a public sector / not for profit setting is that the 4 prescribed perspectives can narrow focus, and potentially make the organisation too inward looking. Mark Friedman's Results (or Outcomes) Based Accountability (see Friedman, M. (2005) trying hard is not good enough. Fiscal Policy Studies Institute, Santa Fe, New Mexico) is a simpler approach that uses 3 Core Performance Measures:
- How much did we do?
- How well did we do it?
- What difference did we make?
Usually organisations major on the first, do a little of the second but regard the third as just too hard. In reality, 'how much..' measures tell very little of value, whereas 'what difference' measures are well worth investment.
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Bukekile Mashoko
Analyst, South Africa
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Sample BSC for Public Sector Organisation It is easy to find sample Balanced Scorecards with the 4 perspectives for corporate organisations. Who can assist with a sample BSC with the perspectives adapted for a non-profit organisation?
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Paul Maguire
Business Consultant, United States
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Sample BSC for Public Sector Organization Bukekile, the comments above provide many good suggestions. Kaplan books also include case studies for non-profits. I have also worked with non-profits (schools and foundations) and can provide you with examples.
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Moderated AI
Netherlands
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Balanced Scorecard with Objectives and Metrics for a Government Ministry When applying the Balanced Scorecard (BSC) framework to a public ministry, such as a government department responsible for a specific area of policy or service provision, it's important to tailor objectives and metrics to reflect the ministry's unique goals and functions. Here are perspectives, objectives, and corresponding metrics for a public ministry:
- Policy and Program Perspective:
Objective: Develop and implement effective policies and programs to address societal needs.
Metrics:
- Policy Impact Assessment (e.g., evaluation of the effectiveness and outcomes of implemented policies)
- Program Reach and Coverage (e.g., number of beneficiaries or target population reached)
- Policy and Program Compliance (e.g., adherence to legal and regulatory requirements)
- Timeliness of Policy Development (e.g., time taken from proposal to implementation)
- Policy Innovation and Adaptation (e.g., introduction of new approaches to address emerging issues)
- Stakeholder Engagement Perspective:
Objective: Foster positive relationships and engagement with stakeholders, including citizens, advocacy groups, and other government agencies.
Metrics:
- Stakeholder Satisfaction Surveys (e.g., perception of ministry responsiveness and effectiveness)
- Stakeholder Participation Levels (e.g., attendance at public consultations, stakeholder meetings)
- Collaboration and Partnerships Formed (e.g., number of joint initiatives with external organizations)
- Public Awareness and Education Efforts (e.g., outreach events, educational campaigns)
- Resolution of Stakeholder Concerns (e.g., response time and effectiveness in addressing stakeholder feedback)
- Resource Management Perspective:
Objective: Optimize the allocation and utilization of resources to achieve ministry objectives efficiently.
Metrics:
- Budget Allocation Effectiveness (e.g., percentage of budget allocated to priority areas)
- Resource Utilization Efficiency (e.g., cost per output or service provided)
- Procurement Process Efficiency (e.g., time and cost of procurement activities)
- Human Resource Capacity (e.g., staffing levels, skills development)
- Infrastructure and Asset Management (e.g., maintenance costs, asset utilization rates)
- Regulatory Compliance and Governance Perspective:
Objective: Ensure compliance with regulations and governance standards while promoting transparency and accountability.
Metrics:
- Regulatory Compliance Rate (e.g., percentage of regulations met or adhered to)
- Transparency Measures Implemented (e.g., public access to information, disclosure of decision-making processes)
- Audit and Evaluation Findings (e.g., number of audits conducted, implementation of audit recommendations)
- Ethical Conduct and Integrity Measures (e.g., whistleblower reports, ethical training completion rates)
- Internal Controls Effectiveness (e.g., fraud prevention measures, risk management practices)
These perspectives provide a comprehensive view of the ministry's performance, focusing on policy and program effectiveness, stakeholder engagement, resource management, and governance. By monitoring and managing performance across these dimensions, public ministries can enhance their ability to fulfill their mandates, meet stakeholder expectations, and contribute to the overall well-being of society.
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