Performance Management Systems: Balanced Scorecard vs. 360-Degree

Performance Management Systems: Balanced Scorecard vs. 360-Degree Feedback Performance Management is an essential part of yielding the best possible results from a company's personnel. And as many preferred systems for performance management demonstrate, the results are only possible with effective instruments and metrics for planning objectives, evaluating performances, ways of garnering feedback and providing proper incentives for achievement.

To this end, the discussion hereafter considers The Balance Scorecard and 360-Degree Feedback as two systems of performance management that have the capacity to improve performance by providing for all of these functions. With respect to the Balanced Scorecard approach to performance management, the text by Torrington et al. (2008) is particularly instructive. This methodology is highly dependent upon the integration of broader performance evaluators with directly quantitative determinants, demonstrating the focus which many firms will place on numerical indicators of the internal environment.

According to Torrington et al., a wide range of numbers relating to productivity, quotas, performance indicators and strategic objectives can be plugged into the Balanced Scorecard. From here, Torrington et al. report, "managers are then provided with a range of indicators on a range of measures which they can use to monitor the progress of their department. The resulting date can be used to inform decisions and communicate human capital measures to a range of audiences." (Torrington et al., p.

815) Insofar as the system is designed to provide company decision-makers with actionable data, the Balanced Scorecard has much in common with the 'continuous design' approach described in relation to the 360-Degree Feedback approach. According to Turner (2002), this adaptive method for configuring the points by which an organization measures its efficiency and functionality is known as 'continuous design' and is distinguished by its appeal to a diverse spectrum of sources for its developmental data.

Also known as the 360-Degree Feedback approach, this demands consultations with all levels of personnel and, in this regard, relies on a great deal more qualitative data than does the Balanced Scorecard. Armstrong (2008) points directly such more qualitative approaches as being particularly adaptive to the nuances of individual companies. This approach to performance management requires direct consideration of the organizational culture into which such a system is being implemented. According to Armstrong, any performance management system must be tailored to meet the conditions of its particularly operational context.

Armstrong describes this context as being largely centered on organizational culture, going on to define organizational culture as "the pattern of shared beliefs, norms and values in an organization that shape the way people act and interact and strongly influence the ways in which things get done. From the performance management viewpoint one of the most important manifestations of organizational culture is management style." (Armstrong, p.

35) In a sense, the text by Drucker contributes the rather qualitative evaluation that seems to endorse the latter approach, noting that where talent management is concerned, a certain degree of human-centered feedback is essential. Drucker notes that "there are many skills you might learn to be an employee, many abilities.