Balanced
Scorecard Public Sector
Balanced Scorecard Public Sector helps
organization effort on the development and execution of program and
service strategies to meet agency missions. Federal, state, and
local governments are using balanced scorecard performance systems
to manage strategy and align organization effort with vision and
mission. These organizations are using Balanced Scorecard Public
Sector systems to communicate mission and strategy to all employees,
to measure program and service delivery success, and to initiate and
track organization changes designed to improve effectiveness and
efficiency. Performance scorecard is part of the President’s
Management Agenda, and is used to track the progress of major
government programs and services.
Balanced Scorecard Public Sector, an
integrated perspective for performance measurement is equally
appropriate in the public sector. Since profit is not the driver of
public sector's activities, Norton and Kaplan rearranged the
perspectives. Mission replaces financial outcomes
as the organization’s top level objective and is in turn supported
by three important perspectives: costs, benefits, and legitimizing
authorities.
In Balanced Scorecard Public Sector the cost
perspective considers costs that are both financial and social.
Likewise benefits are not only measured in financial terms as
policies and program can create both positive and negative
externalities. This expanded concept of cost and benefit is designed
to fit a sector where the market might only be one factor in
deciding on the activities and accountability means owning more than
just the direct effects of an organization’s
actions.
The Balanced Scorecard Public Sector
legitimizing authority’s perspective refashions the customer
perspective to fit with citizen expectation in a democratic
environment. While the customers for a governmental organization may
be a particular group, the organizations mandate comes from a
broader group of citizens; the specific nature of the relationship
depends on the agencies' place in the municipal, provincial, or
federal structure of government.
At the federal level, this means all people
have an interest in the activities of the federal departments. The
reality is that representatives take on this role and create a
framework for activities: legislation, policy, funding, oversight,
etc. This is what is meant by legitimizing authorities and the role
they play in mission achievement
In this conception of the Balanced Scorecard
Public Sector, the financial and customer perspectives have been
reformed into three parallel perspectives. Unlike the private sector
conception where all perspectives are sequentially ordered, the
interrelationship of these three perspectives does not lend itself
to such a clear notion of cause and effect. This is due in part to
the expanded nature of what is being measured.
Balanced Scorecard Public Sector
learning and innovation are still required to continually improve
and prepare for the future. Similarly, a foundation for excellence
in internal processes—attested to by governments' adoptions of
private sector management tools—remains the
same.
