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MAJ 20,2

Scorecard for academic administration performance on the campus

Vernon P. Dorweiler
Michigan Technological University, Houghton, Michigan, USA, and


Mehenna Yakhou
Georgia College and State University, Milledgeville, Georgia, USA
Purpose To provide a framework for an objective scorecard for performance of academic administrators. Design/methodology/approach Literature reviews show that business organizations, as well as academic institutions, are fundamentally rethinking their strategies and operations because of changing environment and calls for more accountability to government and the public. The balanced scorecard is described as a novel approach to face these challenges. Findings The balanced scorecard has been shown as an effective tool to evaluate an organization, and its performance. Performance is identied as the linkage between outcomes and the multiple factors affecting those strategic outcomes. Research limitation/implications While the study provides a general framework for a balanced scorecard to academic institutions, it does not provide an exhaustive list of academic goals and associated measures for evaluation. Practical implications A very useful guidance to academic administrators in their search for ways to improve institutional effectiveness and demonstrate accountability to government and the public. Originality/value The study offers insights on how to translate the business basis of the balanced scorecard to the academic setting. Keywords Balanced scorecard, Universities, Performance monitoring, Performance management Paper type Research paper

Background Traditionally, business has measured performance using nancial measures as basis for accountability and comparability. Porter (1992, p. 73) concluded that the US approach to excellence measurement [nancial measurement]: . is less supportive of long-term investment because of the emphasis on improving short-term returns to inuence current share prices; . favors those forms of investment for which returns are most readily measurable (this leads to an over-investment in assets whose value can be easily calculated); and . leads to under-investment in intangible assets in internal development projects, product and process innovation, employee skills, and customer satisfaction whose short term returns are more difcult to measure.
Managerial Auditing Journal Vol. 20 No. 2, 2005 pp. 138-144 q Emerald Group Publishing Limited 0268-6902 DOI 10.1108/02686900510574557

Specically, nancial accounting-based measures (Brancato, 1995): . are too historical; . lack predictive power;

. . . . .

reward the wrong behavior; are focused on inputs and not outputs; do not capture key business changes until it is too late; reect functions, not cross-functional processes, within a company; and give inadequate consideration to difcult-to-quantify resources such as intellectual capital.

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The balanced scorecard has been proposed as a systematic approach to address these shortcomings. It has been used in a business environment since its inception in 1992. As described by Kaplan and Norton (1996, p. 2):
The Balanced Scorecard translates an organizations mission and strategy into a comprehensive set of performance measures that provides a framework for a strategic measurement and management system.

Specically, Howard Rohn, Vice- President, Balanced Scorecard Institute) explains:

In Balanced Scorecard language, vision, mission, and strategy at the corporate level are decomposed into different views, or perspectives, as seen through the eyes of business owners, customers and other stakeholders, managers and process owners, and employees. The owners of the business are represented by the Financial perspective. Customers and stakeholders (customers are a subset of the larger universe of stakeholders) are represented by the Customer perspective; managers and process owners by the Internal business Processes perspective. And employees and infrastructure (capacity) by the Learning and growth perspective.

Organizations that adopt this approach achieve the following (Kaplan and Norton, 1996, p. 10, 19): (1) Clarify and gain consensus about vision and strategic direction. (2) Communicate and link strategic objectives and measures throughout the organization. (3) Align departmental and personal goals to the organizations vision and strategy. (4) Plan, set targets, and align strategic initiatives. (5) Conduct periodic and systematic strategic reviews. (6) Obtain feedback to learn about and improve strategy. As an executive in one company put it (Brancato, 1995, p. 42):
A balanced business scorecard is an information-based management tool that translates our strategic objectives into a coherent set of performance measures. We start with the vision. What are the critical success factors to attain our vision? What are the key performance measures to measure our progress against success factors? What are the targets, initiatives, and what is the review process to ensure that this balanced business scorecard is the key management tool to run the business? And nally, how do we tie in the incentives?

Clearly, the balanced scorecard is a relatively recent innovation, in integration of soft factors within a strategy. The corporation has focused its direction on the strategy management process (Clark, 1986). The balanced scorecard denes that direction in the four perspectives. It is based on a balanced set of indicators covering a companys mission and goals, not just nancial measures. The reason for this multi-dimensional

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extension is given as the effects of the other three, on nance or business success of the organization (Figge et al., 2002). The reason for use of the balanced scorecard is to formulate strategy objectively in the four perspectives, considering their multidimensional effect (Epstein and Roy, 2004). To develop a balanced scorecard, four basic elements must be dened, for each perspective. Two elements are objectives, aligned with goals of the organization, and performance drivers, to improve Board performance. The other two elements are targets as industry best practices, and commitment to superior governance. These require denite measures to determine achieving the targets. The main purpose of the balanced scorecard is to provide a hierarchy of strategic objectives, in the four perspectives, thereby integrating the linkages toward a nancial outcome (Epstein and Roy, 2004). The balanced scorecard guarantees that activities in each perspective will contribute to success in implementing a strategy. The balanced scoredcard has been widely used by many business organizations, for example Ericsson and Mobil Oil. The balanced scorecard is useful for the not-for-prot sector as well. In addition to the non-nancial performance indicators, the balanced scorecard can help identify nancial measures which are appropriate for the academic context. Purpose of the balanced scorecard in academia The early application of the balanced scorecard in the business lent readily to translation to the academic environment. Replacing customer, with student, and the academic interpretation of the other three perspectives, provides the balanced scorecard for the university. Most colleges and universities have a mission or vision statement that sets out in broad terms the goals of the institution. Within the context of these goals, the institution must decide what it will benchmark and what performance it will measure. The balanced scorecard tracks key strategic elements through a balanced series of performance indicators to ensure that action is meeting strategic objectives, while demonstrating that the institution is meeting accountability expectations and legislative requirements. The translation Bailey et al. (1999) provides the translation:
Customer perspective: To achieve our vision, how should we appear to our customers?

The translation here is highly demanding, as relevant stakeholders for an academic institution include faculty, staff, administration, students, parents alumni, employers, the community, and the image of the institution.
Internal process perspective: To achieve our vision, how will sustain our ability to change and improve?

This translates to quality of educational offering and providers.

Innovation and learning perspective: To achieve our vision, how will sustain our ability to change and improve?

Clearly, this translates to the currency of the program, and providers. The program must be leading, to attract employers, as well as to sustain the institution:
Financial perspective: To succeed nancially, how should we appear to our stakeholders?

This is the most common with the corporate culture, where historically prot driven nancial measures had been used as key performance indicators. In that context, both revenues-generation and value of the assets must be maintained. Focus on one will debilitate the institution. Next, we present the next level of detail for each perspective. The overall detail of the balanced scorecard assures that a realistic representation of the institution is provided. Perspectives in university strategy (1) Customer perspective: . student, employers, faculty, alumni, parents; . teach innovations, public image; . faculty reputation, quality of service; and . continuous improvement. (2) Internal business perspective: . teaching excellence, quality of faculty; . curriculum excellence and innovation; . service efciency and effectiveness; and . strategic issues. (3) Innovation and learning perspective: . teaching and learning excellence and innovation; . faculty development, technology leadership; . teaching/learning innovation; . program and curricular innovations and improvements; . pedagogy enhancements, distance learning; . value-added learning, lifelong learning; . quality of facilities, reward system; and . mission-driven process. (4) Financial perspective: . fund raising, revenue from operations; . human capital investment, nancial management; and . external relationships, public image. The power of this top-down hierarchy structure is the integration, from individual efforts in the four perspectives, now integrated toward a nancial result. Administrative objectives, as four perspectives, are shown next. Administration objectives (1) Learning and growth: . advancing program curriculum, faculty; . enriching academic reputation.

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(2) Internal processes: . risk and crisis management; . performance evaluation goals and objectives basis; . strategic plans effect on growth and regularity; and . board assessment functions, decisions. (3) Stakeholders: . ethical behavior; . legal compliance; and . attention to stakeholders community, student, faculty, stall. (4) Financial: . long-term, short term income; and . success in organization change. The process of developing a scorecard for evaluation of academic administration performance is parallel to that for business management performance (Van Grembergen, 2003). The rst step in the Boards responsibility is to set four business-type elements: (1) goals for the academic organization; (2) objectives for each of the goals; (3) measurable targets for each objective; and (4) accountability for achieving each objective. The process is described as requiring three steps of the Board of Trustees. For each element, the Board sets core objectives as follows: (1) objectives for each of the elements, with the Board responsible for resources; (2) performance drivers, as cause-and-effect relationship, for each objective; and (3) learning and growth, along with internal processes, to develop future-oriented knowledge and skills. Clearly, the balanced scorecard is used to dene and articulate implementation of strategies and to provide an integrated perspective on goals, targets, and measure of performance. The Board is required: . to dene cause-and-effect relationships, and their impact on outcomes; . to determine inuence of performance drivers; and . to assure the reliability and quality of the relationship. After translating the vision, communicating and linking is another important step of the balanced scorecard process. As pointed out by Stewart and Carpenter-Hubin (2000, p. 40):
Academic departments and academic support units must fully understand the macro-level goals so that objectives and measures for their individual units are linked to those of the entire institution. Administrators must link unit goals to macro goals in all scorecard areas, develop strategies to achieve those goals, and allocate resources to those strategies.

This capability is not a one-time effort, but must be monitored regularly, for weaknesses and challenges. The balanced scorecard is a dynamic document that must be updated regularly to reect new developments. Scoring of the board In the task of scoring, the board has two purposes: one is individual directors, and the other is the Board aggregated. So the goal for scoreboard then is for the board to review itself and academic administrator performance. The academic administrators position maps the elements above: . goals for each academic unit; . objectives for a term, for each academic unit; . targets (as objectives) for the term, for each academic unit; and . a differentiation of accountability between administrator and faculty. Thus, the balanced scorecard provides a framework that shows the contributions of each individual unit to the academic institutions objectives. The balanced scorecard provides therefore a means to link rewards to accomplishment of these objectives. As a result, the resources can be more easily allocated to the priorities of the institution. Summary The balanced scorecard has been shown as an effective tool to evaluate an organization, and its performance. Performance is identied as the linkage between outcomes and the multiple factors affecting those strategic outcomes. Those capabilities of the balance scorecard are shown applied in the business organization, and here adapted to an academic institution. By emphasizing integrative analysis and trade-offs, the balanced scorecard helps academic administrators put more focus on internal processes to improve institutional effectiveness, and demonstrate its accountability to government and the public.
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Porter, M.E. (1992), Capital disadvantage: Americas failing capital investment system, Harvard Business Review, Vol. 70 No. 5, pp. 65-82. Stewart, A.C. and Carpenter-Hubin, J. (2000), The balanced scorecard, beyond reports and rnakings, Planning for Higher Education, Vol. 29 No. 2, pp. 37-42. Van Grembergen, W., Saull, R. and de Haes, S. (2003), Linking the balanced scorecard to the business objectives at a major Canadian nancial group, Journal of Information Technology Cases and Applications, Vol. 5 No. 1, pp. 46-66.