The Balanced Scorecard (BSC) method of Lloyds TSB Bank
The objective of the paper is to describe about the Balanced Scorecard (BSC) framework in relation to its implementation in the Lloyds TSB Bank, headquartered in the UK. The reason for choosing the organisation is that the company uses balance scorecard method for calculating and managing the performance of employees (Lloyds TSB Group plc, 2012). The paper will also attempt to evaluate several aspects of BSC in relation to Lloyds with the purpose to recognise how the implementation of BSC would help to measure the performance of the bank. Also the paper will aim at identifying the different drawbacks relating to BSC. Stating precisely, the determined objectives of the paper are to recognise different aspects of BSC and the major Key Performance Indicators (KPIs) of Lloyds. It will also aim to understand how implementation of BSC can prove to be beneficial for Lloyds along with identifying its probable limitations for the organisation which will further be used to provide recommendations.
The research has been conducted in three phases, i.e. identification of research objectives, collection of data and analysis of the data collected. The method used for conducting the research has been based on a systematic approach. The research attempts to make a conclusion on a gradual procedure. Only secondary data i.e. information from internet sources such as company reports, books and academic journals have been used in this paper. In order to calculate and demonstrate the KPIs’ of Lloyds TSB Bank, MS-Excel application has been used. It is in this context that BSC’s four perspectives, i.e. customer perspective, financial perspective, internal business processes as well as learning and growth perspective and their related KPIs (two from each) will be examined through MS-Excel application. The excel graphs will be produced and demonstrated in order to justify the discussion of KPI. Results or Findings Balance Scorecard and Its Perspectives Generally, organisations use BSC to embrace information regarding monetary measures. In Lloyds, BSC can provide a lucid picture about the performance. It can provide the key factors which drive the performance in the organisation. It is worth mentioning in this regard that there are four general perspectives of BSC which are measured by an organisation while judging the performance (Mooraj & et. al., 1999). The following figure will describe the four perspective of BSC: Financial Perspective: The financial perspective represents long-term objectives of an organisation. The KPIs of financial perspectives are: Sales quantity: It aims at measuring the amount of sales; for example, by taking account of the changes in sales revenue over time Market share: It aims at measuring the market competency. For example, by comparing the market exposure of the competitors and that of the organisation Return on investment: It aims at proper allocation of resources. For example, by rendering an in-depth understanding to the most profitable sectors