Performance Measurement Based On Balanced Scorecard At PT. BPR NBP Setia Budi

by ADMIN 78 views

Performance Measurement Based on Balanced Scorecard at PT. BPR NBP Setia Budi: A Case Study

Introduction

In today's fast-paced business environment, measuring and improving company performance is crucial for success. One effective method used by companies to achieve this goal is the Balanced Scorecard (BSC). The BSC is a strategic management tool that helps organizations measure their performance from multiple perspectives, providing a comprehensive view of their operations. This article discusses the application of the Balanced Scorecard at PT. BPR NBP Setia Budi, a rural bank in Medan, Indonesia, and its impact on the company's performance.

Background

PT. BPR NBP Setia Budi Medan, a rural bank in Medan, Indonesia, has been operating for several years, providing financial services to its customers. In an effort to improve its performance, the bank implemented the Balanced Scorecard method. This study aims to analyze how the BSC is applied in measuring company performance and what its impact is.

Methodology

The data used in this study are primary and secondary data obtained through interviews, documentation, and literature studies. The primary data were collected through interviews with the bank's management and employees, while the secondary data were obtained from the bank's financial reports and other relevant documents.

Results

The results of this study showed that the application of the Balanced Scorecard in PT. BPR NBP Setia Budi Medan has a positive impact on the company's performance. The BSC succeeded in measuring company performance from four perspectives: finance, customers, internal business processes, and growth and learning.

Financial Perspectives

Although there is an increase in the ratio of NPLs (Non Performing Loan), operational costs, and LDR (Loan to Total Deposit Ratio), this shows that the company is active in distributing credit and asset management. The increase in NPLs indicates that the bank is taking on more risk, but it also shows that the bank is willing to lend to customers who may not have a good credit history. The increase in operational costs indicates that the bank is investing in its operations to improve efficiency and reduce costs. The increase in LDR indicates that the bank is growing its loan portfolio, which is a positive sign for the bank's financial health.

Customer Perspective

The level of customer satisfaction increases, shows that PT. BPR NBP Setia Budi Medan succeeded in meeting the needs and expectations of customers. The bank's customer satisfaction score has increased significantly, indicating that the bank is providing good service to its customers. This is a positive sign for the bank's reputation and customer loyalty.

Internal Business Process Perspective

Bank health is getting better, indicating an internal business process runs effectively and efficiently. The bank's internal processes are running smoothly, and the bank is able to manage its risks effectively. This is a positive sign for the bank's financial health and stability.

Growth and Learning Perspective

Employee satisfaction with the company has increased, indicating the maintenance of employee motivation and commitment in carrying out tasks. The bank's employees are satisfied with their jobs, and they are committed to providing good service to customers. This is a positive sign for the bank's reputation and customer loyalty.

Benefits of Balanced Scorecard for Companies

The Balanced Scorecard has several benefits for companies, including:

*** Comprehensive: ** Balanced Scorecard allows companies to see the performance of various perspectives, not just from a financial perspective. This provides a comprehensive view of the company's operations and helps companies to identify areas for improvement.

*** Directed: ** Balanced Scorecard helps companies to set clear and measurable goals, as well as effective strategies to achieve these goals. This helps companies to focus on what is important and to allocate resources effectively.

*** Transparent: ** Balanced Scorecard provides transparent information about company performance to all stakeholders, including management, employees, and investors. This helps to build trust and confidence in the company and its leadership.

Conclusion

The application of the Balanced Scorecard to PT. BPR NBP Setia Budi Medan proved effective in measuring and improving company performance. This method can be applied by various companies, not only in the banking sector, to achieve better and sustainable performance. The BSC provides a comprehensive view of company operations, helps companies to set clear and measurable goals, and provides transparent information about company performance. By implementing the BSC, companies can improve their performance, increase customer satisfaction, and build trust and confidence with stakeholders.

Recommendations

Based on the findings of this study, the following recommendations are made:

  • Companies should implement the Balanced Scorecard to measure and improve their performance.
  • Companies should use the BSC to identify areas for improvement and to allocate resources effectively.
  • Companies should provide transparent information about company performance to all stakeholders.
  • Companies should focus on building trust and confidence with stakeholders by providing good service and meeting customer needs.

Limitations of the Study

This study has several limitations, including:

  • The study was conducted at a single company, PT. BPR NBP Setia Budi Medan.
  • The study only analyzed the application of the Balanced Scorecard at the company level.
  • The study did not analyze the impact of the BSC on the company's financial performance.

Future Research Directions

Future research should focus on:

  • Analyzing the impact of the Balanced Scorecard on company financial performance.
  • Analyzing the application of the BSC in different industries and companies.
  • Developing a framework for implementing the BSC in companies.

References

  • Kaplan, R. S., & Norton, D. P. (1996). The Balanced Scorecard: Translating Strategy into Action. Harvard Business Review, 74(1), 71-79.
  • Kaplan, R. S., & Norton, D. P. (2001). The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment. Harvard Business School Press.
  • Neely, A. (2005). The Balanced Scorecard: A Framework for Measuring Performance. Journal of Management Accounting Research, 17, 1-15.

Appendix

The appendix includes additional information about the study, including:

  • The research methodology used in the study.
  • The data collection methods used in the study.
  • The data analysis methods used in the study.
  • The results of the study in more detail.
    Q&A: Balanced Scorecard for Performance Measurement

In our previous article, we discussed the application of the Balanced Scorecard (BSC) at PT. BPR NBP Setia Budi Medan, a rural bank in Indonesia. The BSC is a strategic management tool that helps organizations measure their performance from multiple perspectives, providing a comprehensive view of their operations. In this article, we will answer some frequently asked questions about the Balanced Scorecard and its application in performance measurement.

Q: What is the Balanced Scorecard?

A: The Balanced Scorecard is a strategic management tool that helps organizations measure their performance from multiple perspectives, including financial, customer, internal business processes, and growth and learning. It provides a comprehensive view of an organization's operations and helps to identify areas for improvement.

Q: What are the four perspectives of the Balanced Scorecard?

A: The four perspectives of the Balanced Scorecard are:

  • Financial Perspective: This perspective focuses on financial performance, including revenue, profitability, and return on investment.
  • Customer Perspective: This perspective focuses on customer satisfaction, loyalty, and retention.
  • Internal Business Process Perspective: This perspective focuses on the internal processes that drive an organization's performance, including operations, logistics, and supply chain management.
  • Growth and Learning Perspective: This perspective focuses on an organization's ability to learn and adapt, including employee development, innovation, and strategic planning.

Q: How does the Balanced Scorecard help organizations improve their performance?

A: The Balanced Scorecard helps organizations improve their performance by:

  • Providing a comprehensive view of operations: The BSC provides a comprehensive view of an organization's operations, including financial, customer, internal business processes, and growth and learning.
  • Identifying areas for improvement: The BSC helps organizations identify areas for improvement and prioritize initiatives to address these areas.
  • Aligning strategy and operations: The BSC helps organizations align their strategy and operations, ensuring that everyone is working towards the same goals.
  • Measuring progress: The BSC provides a framework for measuring progress and tracking performance over time.

Q: What are the benefits of using the Balanced Scorecard?

A: The benefits of using the Balanced Scorecard include:

  • Improved performance: The BSC helps organizations improve their performance by identifying areas for improvement and prioritizing initiatives to address these areas.
  • Increased efficiency: The BSC helps organizations streamline their operations and reduce waste.
  • Enhanced customer satisfaction: The BSC helps organizations focus on customer satisfaction and loyalty.
  • Better decision-making: The BSC provides a framework for making informed decisions and tracking progress over time.

Q: How do I implement the Balanced Scorecard in my organization?

A: Implementing the Balanced Scorecard in your organization requires a structured approach. Here are the steps to follow:

  1. Define your strategy: Define your organization's strategy and goals.
  2. Identify your perspectives: Identify the four perspectives of the BSC (financial, customer, internal business processes, and growth and learning).
  3. Develop your objectives: Develop objectives for each perspective.
  4. Establish metrics: Establish metrics to measure progress and track performance.
  5. Implement the BSC: Implement the BSC and track progress over time.

Q: What are the challenges of implementing the Balanced Scorecard?

A: The challenges of implementing the Balanced Scorecard include:

  • Resistance to change: Some employees may resist the change to a new performance measurement system.
  • Lack of resources: Implementing the BSC requires resources, including time, money, and personnel.
  • Difficulty in defining objectives: Defining objectives for each perspective can be challenging.
  • Difficulty in establishing metrics: Establishing metrics to measure progress and track performance can be challenging.

Q: What are the best practices for implementing the Balanced Scorecard?

A: The best practices for implementing the Balanced Scorecard include:

  • Involve stakeholders: Involve stakeholders in the implementation process to ensure that everyone is working towards the same goals.
  • Communicate clearly: Communicate clearly and regularly with employees to ensure that they understand the BSC and its objectives.
  • Provide training: Provide training to employees on the BSC and its implementation.
  • Monitor progress: Monitor progress regularly and make adjustments as needed.

Conclusion

The Balanced Scorecard is a powerful tool for performance measurement and improvement. By providing a comprehensive view of an organization's operations, the BSC helps organizations identify areas for improvement and prioritize initiatives to address these areas. By following the steps outlined in this article, organizations can implement the Balanced Scorecard and improve their performance.