Performance measurement tools: the Balanced Scorecard and the EFQM Excellence Model

Performance improvement is high on the agenda of many companies around the world and with the growing number of improvement models now available care has to be taken to adopt an approach that will yield the most attractive return on investment. This paper compares and contrasts two widely known and well-publicized improvement models: Kaplan and Norton’s Balanced Scorecard and the EFQM Excellence Model. Each consists of a non-prescriptive template offering managers a relatively small number of categories of key performance metrics to focus on. Here, they are examined from a critical perspective with regard to five central issues represented by five questions relating to objectives, strategies and plans, target setting, reward structures and information feedback loops. The analysis conducted reveals that despite having some significant differences both approaches seem to be developed from similar concepts. The paper concludes that it is difficult to find a perfect match between a company and a performance measurement framework and that further research should concentrate on how to implement strategic performance frameworks effectively in specific types of organization.