Balance Scorecard for Measuring Performance - Essay Example

Mihin Airline Plc Balance Score Card Contents Contents 2 Balance score card for measuring performance 3 Critical explanation of issues 10 References 14 Balance score card for measuring performance The balance score card to be designed shall comprise of four major key performance indicators such as internal processes (maintenance and engineering), learning and innovation (human resources), customer satisfaction (marketing and customer services) and financial (accounting). Mihin Airline Plc has been operating in the market segment from past 5 years. The firm is inclined towards delivering quality service to its local passengers. It has set its market position as a low cost airline. While operating in a global market it becomes essential to set competitive prices. Mihin Airlines over the years has been evaluating their overall performance by analyzing their financial reports. However balance score card provides a framework through which different business dimensions can be efficiently analyzed. According to the management balance score card would facilitate measurement of firm’s performance in context of set goals or objectives. In the current scenario the major aim of this low cost airline should be to increase their profit margins. There are different strategies which can be incorporated by the company to accomplish set objectives. On the other hand, a company can be stated as performing well in market place when overall business operations are properly managed. The airline aims at establishing themselves as the most preferred low cost transport provider across the globe. There are four major perspectives of a balance score card such as financial, customer, internal process and organizational capacity. Mihin Airline Plc encompasses certain objectives such as increased customer base, easy availability of funds, increase in revenue margins, operational improvements, maximizing returns, best asset utilization, on-time flights, at lowest cost superior service quality, market leader as low cost airlines, minimizing turnaround time, controlling internal costs, training employees and focusing more on innovation, and reducing non-core business activities. Balance score card basically provides an integrated framework of performance measures and company’s strategies (Lasserre, 2012). Through balance score card evaluation it can be identified whether a firm is been able to successfully meet their set strategies. This measurement tool not only includes financial factor but even comprise of non-financial information. The measurement categories can be plotted in a strategy map in order to determine the flow of strategies to be implemented for achieving business goals. Figure 1: Strategy Map The balance score card would be based on the elements mentioned in figure 1. There are four factors for measuring these elements like objectives, measures, targets and initiatives. Perspectives Objectives Measures Targets Initiatives Financial Increase and the growth of revenue of the company. Decreasing the overhead cost Increasing the profitability. Effective and efficient utilization of its assets Increase in revenue by selling more tickets. Decreasing and reducing the cost of expense By increasing the market value. By increasing the number of services. Increasing the revenue by 20% every year Decreasing the cost by 25% Increase the profitability by 20% each year. By increasing the services by 5% each year. By standardizing the planes. Maximizing the partnership with the sister company. Optimization of the number of routes. Purchasing of new and modern planes or aircraft. Customer Acquiring large base of customers Market leader in low cost airlines More number of on-time flights Superior service quality Increase in customer base annually Competitive comparison Yearly proportion in terms of on-time flight to total flights Customer feedback First position in low cost airline industry Achievement of 98% satisfaction level Focusing on total quality management Developing a customer loyalty program Internal Process High efficiency level of business operations Decreased turnaround time Implementation of cost reduction program Decrease in non-core business activities Turnaround time Flight time Cost of sales Proportion of non-core business activities Read More