Balanced scorecard and performance of consolidated bank of Kenya
Performance management of commercial banks is an important aspect of banking business management. One of the tools for measuring performance is the Balanced Scorecard. The balanced scorecard enables organizations to clarify their vision and strategy and translate them into action. It provides feedback around both the internal business processes and external outcomes in order to improve strategic performance and results continuously. When fully deployed, the balanced scorecard transforms strategic planning from an academic exercise into the nerve center of an enterprise. This objective of this study is to determine the influence of Balanced Scorecard as a performance measuring tool, at the Consolidated Bank of Kenya and points out the challenges faced by the bank for relying solely on the traditional single application of financial indicators only which measures performance. It seeks to understand how the balanced scorecard raises the value of performance management appraisal system based on the introduction of customer factors, internal business processes, employee learning and growth and financial factors of the bank. To achieve this purpose, a case study was carried out. The Head of Human Resources and the General Manager were interviewed. The findings indicate that the balanced scorecard has been a useful tool for bringing the attainment of the mission of the Bank. This is explained by the ability of this tool to bring consensus around the vision and therefore chart the way for its execution. Some challenges have been faced including resistance to change, lack of sufficient knowledge of the staff, aspects of operation that are difficult to measure and lack of objectivity in appraisal of staff. The results in this study have implications for both theory and practice. The results imply Consolidated Bank of Kenya has been applying BSC as a method to measure performance and therefore adds to the growing body knowledge of balance score card application in the banking sector. This study serves as a blue print to policy makers, especially in the public sector for the formulation of policies and procedures that enhance performance of organizations.