Organizational and Performance Measurement using Balance Score Card and its Applications in a Private Hospital

Importance of organizational and managerial performance measures

Measures of organizational and managerial performance are very critical to any organization.  Managers   should be able to asses and evaluate performance using different type of criteria. They should be able to look at performance in terms of agreed aims and objectives, priorities, purpose and outcome. They can only measure performance from what was set out to be achieved. Organizational and management performance measure has a key role to play in improving the overall value of an organization (pettinger

Organizational and managerial performance measures are very important to any organization because it helps maximize customer, client and user satisfaction of products and services over time. It helps maximize the confidence of everyone involved or affected by the organization over a long term. (Buchanan & Huczynski, 2010)

Performance measures Will help long term owner/shareholder value and getting the best possible return  on investment for both public and commercial undertaking; securing the long term  future and wellbeing of the organization working within the particular context and environment, with special recognition of functions inside and outside the organizations control. All this can be effective if everybody knows and understands what is intended by the organization as a whole and what the individual and collective contributions to this core purpose are to be (pettinger, 2012)

Risks of not having performance measures in an organization are that managers will not have data and information that can help them make informed decisions and actions that quantifies efficiency and effectiveness of the organization, ‘you can’t manage what you can’t measure’ (kaplan & Norton, 1990) (Neely, Adams, & Kennerley, 2002)’. Sadly the number of organizations with hopeless performance measures that entirely drive the wrong behaviours is immense. (Neely, Adams, & Kennerley, 2002)

The balanced scorecard

The balanced scorecard is a strategic performance tool introduced by Drs Robert s. Kaplan and David p. Norton in the early 1990s. It is used by managers to help organizations with their objectives, plans and future growth. The purpose of the balanced scorecard is to measure and determine whether the set goals have been met or not. It adds both non-financial and traditional financial metrics to give a well-balanced performance of an organization. That allows an organization to measure the cause-and-effect chain by which customer and shareholder value is created.  In different organizations, the perspectives and the leading indicators can be different, but the idea of the balanced scorecard is to provide a balanced set of indicators. The following are the four aspects of balanced scorecard; (kaplan & Norton, 1990)

Learning and innovation ;this measures how the organization often introduces new products and services or production techniques.in this way, the organization makes sure that it does not become complacent, but rather continuously renews itself.

Internal business perspective; this measure the business internal process, answers questions of improvement and value creating to the way the organization is run. Its strategic objectives are to shorten cycle time and reduce work in process.

Customer perspective; measures performance in terms of how clients experiences the values created by the organization. It answers question of how our customers’ see us, its objective is improve quality and improve delivery reliability. (Verweire & Van Den Berghe, 2004)

Financial perspective; measures the bottom line such as return on investment{ROI}, growth and other traditional measures of business performance, the key objectives are to increase market share and create more shareholder value . (De waal, 2007)

ADVANTAGES

Drive better performance:

When individuals and groups of an organization know how they are doing and what needs improving, they do better.

 Implement s strategy

The balanced scorecard will translate your strategy into real terms and help you track its implementation. Balanced scorecards are developed in a way that specifically directs attention to your strategy and future direction.

 Encourages balanced performance

Balanced scorecards which are very well designed keep the right balance of operational and strategic factors on your watch.

Balanced scorecards will point out what is missing

The balanced scorecard will help the manager see if any key factors are missing, if you use unstructured measures without an underlying performance model you will have no way of knowing what maybe be missing.

 Encourage good management

Balanced scorecards make it possible to readily monitor all measures in a complex organization. As a result, reviews are regular and thorough. When performance issues stands out on a top level scorecard, it’s possible to evaluate data to get further details, the point is that a balanced scorecard encourage thorough monitoring and timely corrective measures.

 Communicates; it tells the story

Many managers and groups take keen interest in the performance of an organization, so a strong scorecard will help you tell the full story of performance- how the complex variables are being balanced as a group. This will allow presenting a compelling picture of performance that is undistorted by focusing on individual issue.

To sum it up, the advantages of using the balanced scorecard are that by looking at the four aspects of the company’s performance you will get a balanced view of what is going on with the organizations performance. The balanced scorecard will give you a full picture as to whether the company is meeting its goals and objectives. The company may seem to be doing well financially, but the customer satisfaction is down, the training for employees is inadequate or the processes are outdated. Using the balanced scorecard allows stakeholders to determine the health of short, medium and long term objectives at a glance. By using a balanced scorecard an organization can be sure that any strategic action implemented matches the desired outcomes. 

DISADVANTAGES

Costly and timely

While are balanced scorecard has been used effectively by many companies for its use as a strategic planning tool, they have also admitted that it can be costly and time consuming. The correct use requires a thorough understanding of the process; it may involve the use of an outside consultant to help with the process. Those involved in the planning process and the use of the scorecard to manage the process and track results all need to have the knowledge of how it works. For maximum effectiveness, the entire organization should understand the theory behind the use of the balanced scorecard and the importance of achieving balance across various measures and how it can be used for process improvement. That can be challenging for smaller organizations to accomplish.

Incomplete information

The effective usefulness of the balanced scorecard is dependent on the value of information that is driving the process; if you input garbage definitely the results will be garbage. It will only work if all the right elements have been selected and if the information used to evaluate progress is complete, accurate and relevant to the area being addressed. (top achievement) (top achievement)

Employee resistance

Some employees and even managers may not be believers, they may feel that it is just the flavour of the month and resist its implementation. This is true if implementation requires employees to go through training activities or put in extra time to learn about the balanced scorecard and its use. Organizations that are effective in the application of the balanced scorecard need the support of everyone in the organization to achieve maximum success.

To sum all this, the balanced scorecard takes forethought. It is not a tool you can just think of one night and solve a problem. It is recommended that you hold a meeting to plan out what goals you would like your organization to reach in each of the four areas. Then you breakdown these objectives in what you will need to bring these objectives to function.

While the balance scorecard gives the overall view of the four areas of concern in the organizational growth and development, the four areas does not paint the whole picture, the financial information included on the scorecard is limited. To be successfully implemented, the balanced scorecard must be part of the bigger strategy for the organizations growth that includes meticulous accounting. Many companies’ uses metrics that are not applicable to their own situation, it is vitally important to make the information being tracked applicable to your needs otherwise its meaningless. 

Recommendations

Customer perspective

Clients are very important factor for any organization, as for the private hospital the following clinical performance indicators has to be measured:

You have to monitor the return rate of patients with injuries whether they should be less all equal to seven days. The return rate for adult patients with asthma whether it should be less or equal to 24 hours. The return rate of sick children in paediatrics should be zero to sixty hours etc.

Financial perspectives

Hospital costs mainly comes through human resources; human resources productivity has to be measured, you have to measure the percentage of hours put in by management and operational support workers if it can be adjusted to increase financial efficiency, you have to measure the percentage hours of registered nurses if they are equivalent to the output produced, all in all you have to measure the overall hours worked and come up with questions of Either reducing the management and support hours by 50% and increase registered nurse hours by 30%.

Internal perspectives

It is very important for stakeholders to communicate with patients so that they know who we are and what the organization is capable of doing. Work on minimizing negative workplace environmental factors; you need a health work environment .listen and Learn from clients in order to advocate solutions to their problems and to communicate with the community you are serving. Today’s managers must encourage employees to initiate process improvement and new ways to respond to patients needs but in a controlled way.

Learning and innovation perspectives

A well trained and experience personnel is key to any operation, it’s very important to monitor hiring, retaining and training ratios to align resource and competencies, nurture a work culture that supports the importance of work and life balance. Encourage a culture that encourages innovation, teamwork, knowledge sharing and leadership. (top achievement)

Implementing, monitoring, reviewing and evaluating

The requirement in the implementation of a successful strategy is to focus attention on the five Cs which are coordination, communication, command, control and conflict as the basic requirement. Patients are important to the organization; surveys have to be introduced by means of questionnaires to find out about the overall impression of the patients. Ask questions about how their hospital stay was viewed? How well was information communicated with the patient and family? The amount of time patients waited before being seen by the doctor or receive test.  Review this information within three months, then compare outcomes with other hospital and then improve on your findings. (white, 2004)

As earlier mentioned, most costs come through hours put in by employees, to implement measures that can balance financial cost and employee input you should specifically involve the staff involved.  Have a meeting and explain what you want to accomplish financially by putting in more flex hours worked by full time employees as over-time and cut part-time staff. Establish a six month time frame to monitor and measure progress, see if your set goals are met or not.

Stakeholders has a key role in communicating frequently with clients,  patients with on-going problems who visits the hospital regularly must be asked about their visit each time and the findings must be recorded for comparisons sake with their next visit. That way, we will be able to monitor our progress and know if we need improvement. Some patients prefer not to speak out face to face, so management can put out surveys and suggestion boxes around the hospital which can be reviewed and evaluated monthly.

Of course a well trained personnel make most things look easier, firstly specify what you what to achieve and who should be involved. Arrange a meeting and training program for the staff involved, monitor progress through tests after each session and at the end of the program. Review if the program has achieved its required goals within three months by either asking immediate supervisor for their views on performance or checking if frequency rate of mistakes has drop. Then evaluate and decide whether to continue with the program or not. (Frost)

 STAKEHOLDER ANALYSIS

There are a lot of stake holders in a health care environment which include medical team, government through the general medical council, patients and the community etc. In practice, there is often an immediate problem with agreeing aims, objectives and priorities. A medical team has the treatment of patients as its priority; managers have remaining within the budget and delivery value for money their priority. (pettinger, 2012)

Patients want compassion as well as skill with clear communication. Compassion is one of the core values of medicine and is an essential element of a therapy relationship. Compassion is based on respect for patient’s dignity and values but goes further in acknowledging and responding to vulnerability in the face of illness. If patients sense the doctor’s compassion, they will be more likely to trust the doctor to act in their best interest and this trust can contribute to the healing process. (association, 2013)

Good medical practice is the government’s core guidance to doctors. Through the general medical council, it sets out values and principles on which practice is founded. This is divided into the following domains; knowledge, skills and performance, safety and quality, communication and partnership and teamwork and maintaining trust. It’s responsible that the patients can trust doctors with their lives and health. (council, 2013)

Doctors alone amongst healthcare professionals must be capable of regularly taking ultimate responsibility for difficult decisions of clinical complexity and uncertainty, drawing on their scientific knowledge and well developed clinical judgement. The doctor’s role must be defined by what is in the best interest of the patients and of the population served. As we know the purpose of the hospital is to cure patients, in that context I will agree with the point of view that doctors are the only stakeholder with legitimate views on performance of the hospital. (council, 2013)

Having said that, to improve service delivery processes the hospital will need to actively engage a wide variety of people such as clinicians, administrative staff, patients and user groups. It helps the hospital to avoid conflict and associated delays. (association, 2013)