Effectiveness of the balanced scorecard on performance of non-governmental organizations in Kisumu county, Kenya
Abstract
Most Non-Governmental Organizations (NGOs) are organized around specific issues
such as alleviation of poverty HIV IAIDS, education, health, human rights, natural resources
management, agriculture, alternative trading, and the various kinds of vulnerability. Currently,
the performance of NGOs is on focus especially for donors and other partners including the
target community. Previously, the NGOs were operating with a target to impact on the livelihood
of the poor. Majority of the NGOs focused more on social impact rather than the financial
equivalent returns. The nature of performance measurement in the NGO sector did not include
financial accountability, however, this has changed and many NGOs are now concerned with
financial accountability of the projects to the stakeholders and more so to the donors. The
purpose of this study was to establish the effectiveness of the Balanced Scorecard in measuring
performance of Non-Governmental Organizations in Kisumu County. Specifically the study
determined customer related factors, internal processes related factors, learning and growth
related factors, and financial related factors as components of the Balanced Scorecard (BSC)
perspectives in measuring performance of Non-Governmental Organizations in Kisumu County.
Kisumu County was chosen because it hosts head offices of NGOs operating within the lake
basin region and provided study participants. The study targeted 30 active NGOs within Kisumu
County with a focus on livelihood. These NGOs were to provide 90 top managers to participate
in the study. A saturated sample of all 90 top managers was included in the study. However, only
64 top managers were involved leading to a response rate of 71.1 %.Sampling procedure involved
purposive selection of 3 top managers including an accountant, monitoring and evaluation officer
and programme officer Imanager. All eligible participants were given equal chance of
participation unless they declined to participate. Data was collected using semi-structured
questionnaires. The questionnaires were structured into sections thematically organized to
capture the Balanced Scorecard key performance measurement elements including customer
perspectives, internal business processes perspectives, learning and growth perspectives and
financial perspectives. Each element had a set of item measures on which measurements were
based. Descriptive statistics were run to establish the accuracy of entry of scores by assessing
range, mean, standard deviation and normality of data. Inferential statistics mainly hierarchical
regression was used to assess the contribution of each of the perspectives as performance
measurement concepts by objectives as outlined. The findings revealed that the customer
perspective was effective in measuring performance on NGOs with eight (8) out of ten item
measures accounting for a variance of 52.46% of the total variability of the customer perspective.
The internal process perspective was effective in measuring performance with 10 out of 12 items
emerging key areas of practice accounting for a variance of 42.19% of the total variance. It was
also noted that out of the 11 item measures that were extracted, 8 were significant. The findings
revealed that presence of well designed and working Standard Operating Procedures (SOPs) was
significant in the internal processes perspective. Learning and growth related factors had all the
item measures identified as key for measuring the perspective accounting for 55.08% of the total
variance. Finally, the financial perspective had 14 item measures put to test for their
effectiveness in the NGOs. 13 item measures registered a variance of 56.87% of the total
variance of the financial perspective. The findings of this study suggest that the BSC is an
effective performance measurement tool among the NGOs.
Citation
Master Of Arts In Project Planning And ManagementPublisher
University of Nairobi
Collections
- Faculty of Education (FEd) [5963]