THE EFFECTIVENESS OF BALANCED SCORECARD AS PERFORMANCE MANAGEMENT TOOL AT ETHIOPIAN MANAGEMENT INSTITUTE

Abstract

The main purpose of the study was to assess the effectiveness of BSC implementation as a tool of performance management system in the case of Ethiopian Management Institute (EMI). The assessment attempted to examine the extent in the effectiveness of BSC planning, its implementation and its achievement, identifying major problems encountered by EMI and mechanism or strategies in place to ease the implementation. Descriptive survey method was employed to conduct this study. With regard to sampling the respondent of the study were conveniently stratified by the organization as supportive and core staff that was major source of the data. Then 112 supportive and 58 core staffs were selected by simple random sampling techniques. To attain the objectives, the study were employed both quantitative & qualitative research approaches. The entire closed end questions were analyzed quantitatively using the Frequency, Percentages, Average Mean, Standard deviation, Independent t-test and Chi-Square test. Besides, the data obtained from open-ended questions, interviews, observation and document analysis were transcribed to supplement the quantitative data. In order to assess its effectiveness in performance management, the study utilized the four perspectives of the BSC. Based on these the data was computed in SPSS and analyzed. The finding revealed that, majority of the respondents perceived that there was low participation in planning, low automating system, no established performance evaluation and rating system. The customer oriented activity not competitive and assignment and hiring of process owners was not according to merit. Among many, the major problems for hindrances of the performance of the organization were low participation in planning and budgeting, inconvenient performance evaluating system, inappropriate hiring and assignment of performer. Conserving to conclusion for the implementation of BSC in the organization give to the organization changing environment, effective customer service and profit maximization. On the other hand the top-down approach of BSC was inhibited the participation of all performers in the preparation strategic plan, budgeting and Revision of plan. The automating of BSC systems were not implemented, as the result of this the organization hinder from Documentation, Reporting and Decision making system of the institute. In addition to these, assigning and hiring of process owner was not according to merit and performance measurement or evaluation tools were not well prepared and not engaged to evaluate the performance of the performer these reduce the competitions that individual and team relatively might have relative to the intended result. Even though, BSC could create new culture of change environment within the organization, they still are not properly using it as a tool for high-quality performance management system for better execution of their strategy. Therefore, the study recommended that government bodies should establish transparent and accountable working environment in all directions. In addition to these EMI should place a competency based selection criteria for the hiring and assigning of the process owners.