The Impact Of The Balanced Scorecard On Employee And Bank Business Performance; A Case Of Kcb, Kenya

ABSTRACT

In order for strategy implementation to be successful, there is need for a clear alignment and synergy between all the factors or parameters that make up an organization; customers, processes, people or employees and capital or financials. Today's organizations recognize that competitive advantage comes through intangible knowledge, capabilities and relationships created by employees, and not from physical assets and access to capital. Leading companies agree on the need to have a structured methodology for using performance measurement information to design goals, allocate and prioritize resources and communicate business expectations as well as change policies to suit the organization's desired direction and strategy. Kenya Commercial Bank has in the last five years been working on a turn around and is now focused on growth. Four years ago the Bank embarked on a performance management framework that was aimed at identifying goals and targets to be achieved by the individual employee over a one-year period. This was linked to a performancebased pay structure. Although this framework worked, to some extent it failed to give a balanced focus and weighting to the various perspectives of organization performance, people, customers, financial and internal process as the main focus was on the achievement of financial targets and profits. In selecting to use the balanced ,. scorecard as a performance measurement tool, the Bank seeks to create clarity in its effort to achieve its strategy as we! I as to accord the performance framework the necessary balance to ensure that none of its important parameters of business suffer. To this end, the Bank introduced the balanced scorecard at the beginning of this year. The balanced scorecard is a management and measurement system that enables organizations to clarify their vision and strategy and translates them into action. It provides feedback around both the internal business processes and external outcomes to continuously improve strategic performance and results. The main objective of this study was to measure and establish the impact of the balanced scorecard on employee and Bank's business performance. A research study was conducted on a cross section of the Bank's management staff within the Bank's branches and Head office whereby respondents were issued with a self-administered questionnaire. Interview Schedules were also used for the Bank's executive team. The data collected was analyzed using descriptive methods. The study was expected to help other organizations to identify a powerful performance measurement and management tool for both their employees and the organization to enhance achievement of their business strategies.