Blance Score Card

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The Balanced Scorecard – Applying a Private Sector Technique to the Public Sector Paper presented at the 1998 Conference of the Association for Public Policy Analysis and Management Aaron A. Estis KPMG Peat Marwick LLP Grand Hyatt New York City, New York October 31, 1998 KPMG Peat Marwick LLP 303 Peachtree Street, Suite 2000 Atlanta, GA 30308 404 222 3614 aestis@kpmg.com copyright, 1998 Aaron A. Estis The Balanced Scorecard -- Applying a Private Sector Technique to the Public Sector What you measure is what you get. With these words, Robert S. Kaplan and David S. Norton began their Harvard Business Review article expounding upon the concept of a balanced scorecard for businesses. The authors document instances in which private sector organizations have had success in applying the balanced scorecard. Kaplan and Norton cite well known fortune 500 companies as being among those that have employed the balanced scorecard with some degree of success. Although the balanced scorecard was designed originally to serve private businesses, it would appear to offer even greater benefit to the public sector. This paper does not present an argument for why governments should measure their performance-- the premise that information is power is deemed axiomatic. Instead, this article sets forth a framework for applying a specific approach used in the private sector to measuring the performance of public sector organizations. That approach is called the balanced scorecard. The notion of a balanced approach to performance measurement is not new. Others have suggested that governments need to report a balanced set of indicators (Kravchuk and Shack, 1996). In this paper, we define four categories for which an agency should identify performance measures. Problems Associated with Measuring Government Performance

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