Application of balanced scorecard in performance management among commercial banks in Kenya

Abstract

The balanced scorecard is a performance management approach that enables organizations to clarify their vision and strategy and translate them into action. It provides feedback around both the internal business processes and external outcomes in order to improve strategic performance and results continuously. When fully deployed, the balanced scorecard transforms strategic planning from an academic exercise into the nerve center of an enterprise. The objectives of the study were, to establish the application of balanced scorecard for employee performance management in commercial banks in Kenya and to determine the challenges faced by commercial banks in Kenya in using the balanced scorecard for employees performance Management. The study was conducted using descriptive survey with primary data collected using semi structured questionnaires and the questionnaires were administered using drop and pick method. The respondents were 44 heads of the human resource function in the Commercial banks. The data collected was then checked for completion, coded and analyzed with the help of the Statistical Package for Social Sciences (SPSS). The results were presented using descriptive statistics such as frequencies, percentage, mean scores and standard deviations. Overall, the results showed that balanced scorecard was used in the commercial banks to a great extent and the performance measures used in the majority of the banks were financial indicators and customer satisfaction. It was also found that there were some challenges faced by commercial banks in Kenya in using the balanced scorecard. These included resistances to change, management being too busy solving short-term issues to pay adequate attention to performance management-including balanced scorecard, lack of highly developed information system to support balanced scorecard, impending organizational problems and too many measures that dilute overall impact of BSC and lack of skills and know-how by a significant number of employees