On Building a Dynamic BSC Model for Strategic Performance Measurement in Public Sector

The issue of performance measurement is getting more critical to the public-sector organizations as well as the private domain as environmental changes become more dynamic and complex. Recognizing the importance of intangible assets, the public organizations have started to introduce Balanced Scorecard as a means of managing and measuring their performance. Unfortunately, however, BSC, a wisdom of the private sector’s, is not properly workable unless it is modified by reflecting the unique characteristics of the public organization. In addition, the traditional BSC fails to accommodate into its model the dynamic structure within which indicators are interrelated and interacting with time delays. Therefore this paper aims to devise a dynamic-BSC model appropriate for the public organizations by introducing the system dynamics concept with a focus on the effect of casual relations and the interactions among the key indicators and taking into account the impact of delayed feedback caused by new policy and legislative changes. Keyword : Balanced Scorecard, System Dynamics, Public Sector. Introduction It is fact that financial performance measurement which was based financial statements have been serviced, more and less, scientific and objective results for a long time. Today, the invisible resource like as ‘Knowledge’ more create value than visible resource. The traditional financial performance measures worked well for the industrial era, but they are out of step with the skills and competencies companies are trying to master today.[4] These financial measures are inadequate, however, for guiding and evaluating the journey that information age companies must make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation.[13]