Balanced Scorecard The Willowbrook Community Bank recently decided to adopt a ba

Question

Balanced Scorecard

The Willowbrook Community Bank recently decided to adopt a balanced scorecard system of perfor-

mance evaluation. Below is a list of primary performance goals for four major performance categories

that have been identified by corporate management and the board of directors.

1. Financial Perspective–Maintain and grow the bank financially

a. Increase customer deposits

b. Manage financial risk

c. Provide profits for the stockholders

2. Customer Perspective – Maintain and grow the customer base

a. Increase customer satisfaction

b. Increase number of depositors & customer retention

c. Increase quality of deposits

3. Internal Perspective – Improve internal processes

a. Achieve best practices for processing transactions

b. Improve employee satisfaction

c. Improve employee promotion opportunities

4. Learning and Innovation – Improve market differentiation

a. Beat competitors in introducing new products

b. Become first mover in establishing customer benefit for customers

c. Become recognized as an innovator in the industry

Required

a. For each of the 12 goals above suggest at least one measure of performance to measure the achieve-

ment of the goal.

b. At what level of the organization should the balanced scorecard be implemented as a means of

evaluating performance? Explain

Explanation / Answer

1. Financial Perspective

a. Increase customer deposits- Increase in Deposit Amount

b. Manage financial risk- reduced Bad debt

c. Provide profits for the stockholders- Increased return on Investment

2. Customer Perspective

a. Increase customer satisfaction-New referral customers

b. Increase number of depositors & customer retention- Increase in deposit amount from existing customers

c. Increase quality of deposits- Increase in duration of deposits

3. Internal Perspective – Improve internal processes

a. Achieve best practices for processing transactions-reduced time per transaction

b. Improve employee satisfaction-employee satisfaction survey

c. Improve employee promotion opportunities-Reduced attrition rate

4. Learning and Innovation –

a. Beat competitors in introducing new products- Revenue from new Products

b. Become first mover in establishing customer benefit for customers-Customer benefit realization

c. Become recognized as an innovator in the industry- Get recognized by a governing body.

It is important that internal goals and measures are broken down at the bottom most level in order to provide a link between top management goals and individual employee actions. This link would ensures that employees at lower levels in the organization have clear targets for actions, decisions, and improvement activities that will contribute to the Organization's overall mission. Just like increasing customer satisfaction, the employee at advisor level needs to understand this and help tranlsate the experience of customer with the bank to a satisfied level.

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