The balanced scorecard balanced scorecard recognizes

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The Balanced Scorecard Balanced scorecard: recognizes that management must consider both financial performance measures and operational performance measures Represents a major shift in corporate performance measurement financial indicators are no longer the sole measure of performance Key performance indicators (KPIs): summary performance metrics used to assess how well a company is achieving its goals Reported on performance scorecard
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Balance Scorecard A balanced scorecard consists of an integrated set of performance measures that are derived from and support a company's strategy. Under the balanced scorecard approach, top management translates its strategy into performance measures that employees can understand and influence. Performance measures used in balanced scorecards tend to fall into the four groups: 1. Financial 3. Internal business processes 2. Customer 4. Learning and growth
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Balance Scorecard Financial performance measures are not sufficient in themselves—they should be integrated with nonfinancial measures in a well-designed balanced scorecard. Internal business processes are what the company does in an attempt to satisfy customers. Nonfinancial measures of key success drivers such as customer satisfaction are leading indicators of future financial performance. Financial measures are usually considered a lag indicator.
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Balance Scorecard The performance measures should be consistent with, and follow from, the company's strategy. If the balanced scorecard is correctly constructed, the performance measures should be linked together on a cause-and-effect basis. Incentive compensation for employees, such as bonuses, can, and probably should, be tied to balanced scorecard performance measures.
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Sustainability and Performance Evaluation Incorporate relevant sustainability KPIs in performance evaluation system PepsiCo performance perspectives Human sustainability (people in society) Talent sustainability (people in the company) Environmental sustainability Financial performance Responsible and sustainable sourcing Community and philanthropy
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