The Effect of the Balanced Scorecard on Factors that Drive Performance at Kenya Commercial Bank (KCB)

Abstract

The purpose of this study was to investigate the effect of the Balanced Scorecard model on factors that drive employee performance at Kenya commercial Bank (KCB) with an aim to offer solutions that mitigate against the main problems important for business to survive, solid performance and success. The research objectives elaborated a network of association among the variables that arc assumed to be having sufficient relationships with the dependent variable- employee performance These objectives of the study included: to was= the effectiveness of the balanced score card as a tool of performance measurement, and appraisal at KCB, find out how the balanced score card was used as a motivational tool for employees at KCB, to evaluate if management and staff of KCB understood the co- relation of the balanced score card and organizational strategy and to investigate whether or not staff of KCB perceived the balanced score card as a personal development tool. The study was descriptive in nature, focusing on KCB. Respondents were selected on stratified sampling technique in which seventy three (73) respondents from a population of two hundred and forty two (242) staff working at different branches of KCB were chosen. Data was collected using a Likert scaled, self-administered questionnaire with closed and open ended questions. Closed questions were used to ensure that the given answers were relevant. The study then attempted to interpret the data into understandable information through analysis of the results. The Statistical Package for Social Sciences (SPSS) was used to analyze the data. Qualitative data was summarized and categorized according to common themes and presented in tables and figures. The results summary indicated that the BSC model was used with a response of 96%.at the bank. This means that there was a high perception amongst the staff members on effectiveness of the BSC model as a tool of performance measurement and appraisal at KCB. 69.1% of the members of the staff strongly agreed that they understood BSC model of performance appraisal at KCB in 30.9%, of staff members they agree that they understand the model. This shows that there was sufficient evidence that staff members had an aggregate 99% understanding of the BSC model at the bank. Over 92% of the responds said that Learning and growth perspective of the BSC model had enhanced their motivation. This implies that the implementation of the model at the KCB has made impact on the staff motivation which is likely to improve the organizational performance. This study concludes that the Balanced Scorecard when correctly implemented as a strategy should comfortably enable an organization like KCB to clarify and translate vision into strategy, communicate and link strategic objectives to the staff’s personal goals, set smart targets and analyze them during performance review and enhance strategic feedback and learning. Given that the organization succeeds to implement the BSC strategy, it is able to quantify where it is on its strategic capability building journey, in the context of its current performance, and possible changing business environment. This information should enable the leadership to determine whether the organization is on track, and what, if any, interventions need to be made. If changes are required these could be in the definition of the destination, the pace of the journey, or the redesign of the initiatives designed to build the capability. The study recommends that KCB should invest in training programs for the education of staff members on the importance of the Balanced Scorecard so that they understand and appreciate the tool better and get rid of the stigma associated with performance reviews. This is especially necessary for 8% of staff who did not view the balanced scorecard as a motivational tool for performance management in the bank. This study also recommended that for the balanced scorecard approach to work effectively at KCB, the organization may require some substantial changes in culture within the organization. The balanced scorecard requires understanding, commitment and support from the very top of the business down, so, as organizational culture changes and develops to accept the new approach and members of staff at KCB mature within the new culture, the organization will find new things to measure, new goals in different areas, to make the balanced scorecard even more balanced and effective in supporting a living, growing, viable organization.