Balanced Scorecard in Sri Lankan Government Organizations and Associated Limitations

Balanced Scorecard in Sri Lankan Government Organizations and Associated Limitations

In the recent past Sri Lankan companies have opted towards adopting Balanced Scorecard as a method evaluating the performance of the employees. Some Sri Lankan blue chip companies have already adopted the balanced scorecard method in order to evaluate the performance of the employees as well as the company as a whole. For example, Dialog Axiata PLC has adopted a customized version of Balanced Scorecard framework since the year 2012 and has seen many improvements in terms performance. This proves that implementation balanced scorecard framework to Sri Lankan companies is possible.

However many Sri Lankan Government organizations seem to be facing many limitations when it comes to implementing the Balanced Scorecard concept. Some of the limitations are discussed below.

One of the main limitations that Sri Lankan companies face when it comes to implementing the above method is the incompatibility of the culture prevailing in many companies with the concept of Balanced Scorecard. Many companies do not have the performance driven cultures. For an example, Sri Lankan Airlines which is a government owned airline is currently facing the risk of bankruptcy due to the ever growing losses made year after year. It is evident that Sri Lankan Airlines does not have a performance driven culture which would have been ideal in terms of reviving the business.

In most cases performance evaluation is considered to be a Human Resource function that is required to be carried out once a year in order to pay bonuses and other benefits to the employees. Hence performance evaluation might not play an important role in day-to-day business.

More often than not, people tend to be negative towards change. When it comes to implementing a new concept such as balanced scorecard, people tend to be resistance towards change. Lack of change management has led to failure of many initiatives. Hence it can be said that resistance of employees to change is one of the limitations when it comes to implementation of balanced scorecard concept.

Lack of knowledge pertaining to formulation, implementation and evaluation of scorecard framework, may prove to be a limitation when it comes to implementing the balanced scorecard framework to Sri Lankan companies. The power with regard to making decisions about government owned organizations lies upon the politicians of the country rather than upon the educated government officials. Poor educational background of politician and their lack of interest towards implementing a performance driven culture coupled with corruption have forced companies like Sri Lankan Airlines to the brink of collapse. Hence it can be said that lack of knowledge and support from the top management is a main limitation when it comes to implementing balanced scorecard method in Sri Lanka.

Formulation of scorecards is often time consuming. Since the aim of Balanced Scorecard Framework is to link the company vision and strategy with the performance measurements, the scorecards cannot be drawn overnight. The process requires careful planning which often tend to take months at a time. Hence the top management may perceive the process of implementing the balanced scorecard too time consuming and non-value adding. Lack of management support is another reason why the implementation of balanced scorecard framework tends to fail in Sri Lanka.