Friday, August 13, 2010

Company Performance Measured with the Balanced Scorecard

Performance is the ability to work as shown by the work. Hawkins (The Oxford Paperback Dictionary, 1979) suggests understanding performance as follows: "Performance is: (1) the process or manner of performing, (2) a Notable action or achievement, (3) the performing of a play or other entertainment. " Company performance is something produced by a companies within a certain period in accordance with the standards set. Corporate performance should be a measurable results and describes the empirical conditions of an enterprise of any size agreed. To find out achieved performance is done performance assessment. The word is often interpreted with rating assessment. Whereas company performance is something produced by a company within a certain period in accordance with the standards set. Thus assessment of corporate performance (performance Companies assessment) implies a process or system of judgments about implementation of the working ability of an enterprise (organization) based on
certain standards (Kaplan and Norton, 1996; Lingle and Schiemann, 1996; Brandon & Drtina, 1997).

The purpose of performance assessment is to motivate personnel to reach organization's objectives and adhere to the established standards of behavior previously, in order to produce desired actions and outcomes by organization. Standards of behavior may include management policies or plans as outlined in a formal strategic plan, program and budget organization. Performance appraisals are also used to suppress behavior improper and to stimulate and enforce behavior should you wish, through feedback of performance results on time and rewards, both intrinsic and extrinsic. There are various assessment methods used during this performance, in accordance with company goals is to look for profit, then almost all measure company performance by financial measures. Here party corporate management tends to only want to satisfy shareholders, and less attention to broader measures of performance that is of interest stakeholders. Atkinson, et. Al. (1995) stated that performance measurement as follows:
"Performance measurement is perhaps the most Important, most misunderstood, and most Difficult task in management accounting. An effective system of performance measurement critical containts performance indicators (performance measures) That (a) consider Each activity and the organization it self from the customer's perspective, (2) Each evaluate activity using customer-validated measure of performance, (3) consider all facets of activity affect the performance That customers and, therefore, are comprehensive, and (4) Provide feed-back to help organization members identity problems and opportunities for improvement. "

The above statement implies that the performance assessment is
important, it's likely to have misunderstandings, and a task The most difficult part of management accounting. An effective performance appraisal system should contain performance indicators, namely: (a) must consider each organizational activities and emphasis on customer perspective, (2) assess each activity using performance measuring tools that validate customers, (3) pay attention to all aspects of performance activities comprehensive that affect customers, and (4) provide information form of feedback to assist member organizations to recognize problems and opportunities for improvement. Further, Atkinson, Banker, Kaplan and Young (1995) pointed out that the role of
performance assessment in Helping to manage the organization members value chain. Referring to the concept, the assessment contains the performance tasks to measure a variety of activities so that organizational level generate feedback information for improvement of the organization. Repair organization implies organizational management improvement which include: (a) improved planning, (b) process improvement, and (c) improvement evaluation. The result is information for further evaluation improvement "-planning-evaluation process" hereinafter. Process "perencanaanproses- evaluation "should be carried out continuously (continuous process improvement) for the strategic factors (competitive advantage) can be achieved.

Assessment of company performance can be measured by the size and financial non-financial. The financial size to know the results of actions that have been done in the past and such financial measures is equipped with non-financial measures of customer satisfaction, productivity and cost effectiveness of business processes / internal as well as productivity and personnel commitments which will determine the financial performance of the future. Size shows the financial consequences of various actions that occur outside the non- financial. Improved financial returns are indicated by the size ROE is the result of a variety of operational performance such as: (1) increasing customer confidence in the products produced company, (2) increasing the productivity and cost effectiveness business / internal use by companies to produce products and services, (3) increased productivity and commitment of personnel. So if top management intends to double its financial performance company, then the focus of attention should be directed to motivate doubled the personnel in the performance or non-financial perspective operational, because that's where there is hyper real (the real drivers)
long-term financial performance. In the perspective of a broader assessment of performance, Hansen and Mowen (1997) states as follows: "Activity performance measure exists in both financial and non financial forms. These measures are Designed to assess how well an activity was Performed and the result achieved. They are Designed to Reveal Also if
constant improvement is being Complaints. Measures of activity center on three major performance dimension: (1) efficiency, (2) quality, and (3) time The above explains that there are two performance appraisal activities type of measurement, namely: financial and non financial. This measurement designed to assess how the performance of activities and outcomes that achieved. There is also a performance assessment designed to reveal if stagnation occurs repairs to be undertaken. Performance appraisal center activities are divided into three main dimensions, namely: (1) efficiency, (2) quality, (3) time. This matching is also described by Kaplan and Norton, (1996); Lingle and Schiemann, (1996) non-financial performance measures designed to assess how well the activities are successfully accomplished and focused on three The main dimensions of efficiency, quality and time. According to Dess and Lumpkin (2003:90) there are two approaches used to assess the performance of the company namely; first approach
financial ratio analysis (financial ratio analysis) and the second approach viewed from the perspective of the parties concerned (stakeholders perspective). In the financial ratio analysis can be divided into five types namely; (1) Short-term solvency or liquidity, (2) Long-term solvency measures, (3) Asset management (or turn over), (4) Profitability, (5) Market value.

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