Recommended Readings on Balanced Scorecard and Performance Management

Performance Drivers: A practical guide to using the Balanced Scorecard

Nils-Goran Olve, JanRoy, Magnus Wetter. John Wiley & Sons, 1999

A practically focused text based on Second Generation Balanced Scorecard concepts, which provides a pragmatic and practical discussion of how to make use of the Balanced Scorecard. Based on experience gained in Scandinavia, the book is of particular interest for its use of european case studies that seem more concrete and plausible than those found in other texts on the subject. Since its publication in 1999, this has been the book 2GC rates most highly as an introduction to the subject area. If you are new to the subject, and can only make time to read one book, we would recommend that you read this one.

Integrated Performance Management: A guide to strategy implementation

Kurt Verweire and Lutgart Van den Derghe

Our recommended text for readers looking to gather a more in-depth understanding of the topics and issues that influence performance management system design and implementation. This book brings together contributions from a number of authors who discuss the subject from a wide range of perspectives, including consideration of financial and control issues, as well as the links between performance management and both strategic planning and human resource management. The book does not set out to provide practical guidance for any of these topics, but nonetheless the book provides useful background reading for those who want to understand some of the underlying principles of performance management.

The Strategy Process: Concepts, Contexts, Cases

Henry Mintzberg, Joseph Lampel, James Brian Quinn, Sumantra Ghoshal

One of the key aspects of a successful performance management system is the extent to which it facilitates and measures the execution of strategy. This book pulls together many of the standard texts on strategy and organisation theory, many written by the authors themselves. The book looks conceptually at what strategy is and the strategy formation processes that occur within organisations. It also discusses factors that determine what organisational forms firms adopt and their practical implications, and looks at factors that have influence upon the methods and styles required to manage firms effectively. Useful reading if your focus is strategic performance management.

Service Operations Management

Robert Johnston and Graham Clark

Another standard text, this book considers in depth issues associated service and operations management. Six chapters are included that relate specifically to performance management. Although it starts by considering performance management from a strategic perspective, its value comes from its discussion of how to operationalises these concepts, linking performance management to other operational concepts such as the service performance network, service failures and organisational culture. It also discusses performance management in the context of other frameworks such as EFQM and TQM.

Books by Robert S. Kaplan, David P. Norton

This section is included primarily because no list of Balanced Scorecard texts seems complete without something including from Kaplan & Norton. These are the best of the books, in our view. Important to read if you are professional active in the performance management field, if only for their contextual value. But if you are looking simply for a book to provide an overview of the topic area, and explain practically how to implement performance management in your organisation, we think there are other sources that are better (and more concise) that you should look at first.

• The Balanced Scorecard: Translating Strategy into Action (1996)
• The Strategy Focused Organisation: How Balanced Scorecard Companies Thrive in the New Business Environment (2001)
• Strategy Maps: Converting Intangible Assets into Tangible Outcomes (2004)

The 1996 book is based on two journal articles published in 1992 and 1993 in Harvard Business Review and is perhaps the most cited book on the Balanced Scorecard. It provides an introduction to the Balanced Scorecard concept some of the the key concepts, but it is limited by its reliance on the 'First Generation' Balanced Scorecard framework, and was long ago superceded by better more modern texts, one of which is Kaplan & Norton's own 'Strategy Focused Organisation' (2001). The 2001 book looks in greater detail at the link between performance management and the Balanced Scorecard and consolidates the concept of 'Second Generation' Balanced Scorecard, using a mix of private and public sector case studies. The 2004 extends Kaplan & Norton's writing on Second Generation Balanced Scorecard ideas, in particular considering in more detail the then fashionable concept of intangible assets. In practical terms, the book focuses largely on describing pro-forma 'template' strategies as a guide to the development of strategy maps.

Rather than produce an exhaustive list of academic papers - which would replicate work done in the several literature review papers published over the last few years. Instead, here is a short list of some of the papers 2GC’s researchers think to be representative of the field.

On Balanced Scorecard

• Linking the Balanced Scorecard to Strategy
  Kaplan, Robert S.; Norton, David P. / California Management Review, Vol. 39 No.1 Fall, 1996
  This is the only Kaplan & Norton paper that you need to read. It consolidates into one short article the meaningful content of their pre-1996 articles in Harvard Business Review, and most of the content of both their 1996 and their 2001 books. Unusual for a Kaplan & Norton paper in that it includes a list of citations to other authors. Curiously overlooked in the literature.
• The Balanced Scorecard & Tableau de Bord: A Global Perspective on Translating Strategy into Action
  Epstein M. J., Manzoni J. F. / INSEAD Working Paper 97/63/AC/SM, 1997
  Subsequently republished by the authors in several other journals / magazines, this article is concise and thoughtful, using the comparison of First Generation Balanced Scorecard and the Tablea de Bord to touch upon several of the key issues relating to performance management.
• Management by objectives and the Balanced Scorecard: Will Rome fall again?
  Dinesh, David and Palmer, Elaine / Management Decision, Volume 36, Number 6, 1998
  This paper takes a historical perspective to performance management, comparing the concept of management by objectives (MBO), which was introduced by Drucker in 1955 with the Balanced Scorecard. It reviews the factors that influenced the success (or otherwise) of MBO, drawing the lessons learnt to current thinking.

On Performance Measurement and Management

• Measuring People and Performance: Closing the Gaps
  Morgan, B. S. and W. A. Schiemann / Quality Progress 32(1), (1999)
  This paper reviews the finding of a large (800 company) survey on the impact of people-centred metrics on company performance. It breaks the companies surveyed into two groups ‘Leaders’ and ‘Others’ and examines differences in the performance management systems of the two groups.
• Performance Measurement, Budgeting and Strategic Implementation in the Multinational Enterprise
  Barsky, N.P. and Bremser W.G. / Managerial Finance; Vol. 25, No. 2, pp. 3 - 1, 1999
• The performance measurement manifesto
  Eccles, Robert G / Harvard Business Review; pp: 131-137 Jan-Feb, 1991
• A Stakeholder Approach to Strategic Performance Measurement
  Atkinson, A; Waterhouse, J; Wells, R A / Sloan Management Review, 1997
• Performance implications of performance measurement in financial services firms
  Ittner, C. D., D. F. Larcker, et al. Accounting, Organizations and Society 28(7,8): 715-74, 2003.
  This paper examines the impact of performance management on firm performance as measured by ROA. It finds evidence to support the hypothesis that firms with an extensive performance management system that covers a board range of data (financial and non financial) are generally more satisfied with their performance management system and have better ROAs’ than their peers.

On Strategic Management and Change

• Mintzberg, H; (1990); The Design School: Reconsidering the basic premises of Strategic Management; Strategic Management Journal
• Burke, Warner W; Litwin, George (1992). "A Causal Model of Organisational Performance and Change"; Journal of Management; Volume 18 Number 3

On Strategic Control

• Muralidharan, Raman; (1997); Strategic Control for Fast-Moving Markets: Updating the Strategy and Monitoring Performance; International Journal of Strategic Planning (Long Range Planning) 1997
  This paper focuses on the requirement to be reflexive when monitoring the extent to which strategic plans are implemented, ensuring that sufficient flexibility is built into the managerial processes to accommodate changes.
  
• Ittner, Christopher D; Larcker, David F; (1997); Quality Strategy, Strategic Control Systems and Organizational Performance; Accounting, Organizations and Society

• Bungay, S; Goold, Michael; (1991); Creating a strategic control system; International Journal of Strategic Planning (Long Range Planning)