Performance Measurement Of Financial And Non Financial Results Accounting Essay

Every administration strive for good public presentation. Performance betterment considers organizational alteration where direction of the administration puts in topographic point some undertakings to assist hike the current degree of public presentation. In this regard the programmes may wholly alter the administration behavior and conducts to let the alterations to take consequence. Management aims to increase the organizational effectivity and efficiency in presenting its merchandises and services.

As the affair of fact public presentation requires public presentation steps to measure the fiscal and non fiscal consequences. Thereafter public presentation spreads and future betterment actions are planned sing ethical facets. Most administrations use public presentation indexs which serve as powerful attack to supervise and better public presentation. Administrations use different methods and techniques they have developed to treat alterations for betterment intents.

Most of people measure company ‘s public presentation by looking at ‘amount of money the company has merely made ‘ . They consider net income, ROI, grosss to be the step for public presentation. The chief job of sing merely fiscal facets of the concern is that these steps report the past actions that the company may hold no immediate control. Taking an illustration of client facets, they are non straight covered under fiscal facets. Concentrating merely on fiscal facets may in the long tally jeopardise the company ‘s relationship with the clients and may look for their demands with the rival company.

In position of the above a more comprehensive and clear attack is needed that put equal weight and accent to both fiscal and non fiscal facets. An attack that non merely considers lagging indexs but besides looks frontward and see prima indexs. This prompted the research worker to see utilizing the Balanced scorecard model in measuring the public presentation of the Local Authorities Pensions Fund ( LAPF ) and to urge actions to better the current degree of public presentation.

The research subject explains by itself, and aims to happen out the public presentation betterments that could be achieved when LAPF opts to implement the BSC attack. Thus the subject covers two facets ; public presentation betterment and the Balanced Scorecard.

Balanced Scorecard ( BSC ) Approach

As it is largely known, the BSC strikes the balance between the fiscal and non fiscal steps of public presentation. In short BSC is a model used for measuring concern public presentation of a company. Kaplan and Norton consider BSC as ‘ Organisational public presentation direction tool ‘ . As will be reviewed in Chapter two, ( subdivision 2.3 ) BSC involves specifying company mission, scheme and steps. These should be clear and agreed upon by the interested stakeholders. After the BSC is set direction should seek to understand the factors that cause alteration and fluctuations of the BSC. These factors are really of import as will take the administration to to the full understand where and when to pass to cover the public presentation spread. The undermentioned diagram ( figure 1.1 ) shows a simple balanced scorecard templet. ( adopted from Kaplan and Norton,1992. )

Fiscal position

Internal procedure position

Vision & A ; scheme

Customer position

Learning & A ; growing position

Figure 1.1 Balanced scorecard templet

For each of the four positions, strategic ends that link with the vision and scheme are established together with the relevant steps. For a novice like LAPF this simple construction is recommended to maximize the opportunities for successful execution. As the BSC is a uninterrupted attack, direction may subsequently wish to set the aims and steps to reflect the current operating and economic conditions.

Performance betterment rhythm

Performance betterment is a uninterrupted procedure. It can be thought of as a rhythm. See the undermentioned diagram ( figure 2 ) with the accounts below.

Figure 1. 2 Performance Improvement Cycle


Plan: The administration needs to cognize what should be accomplished and programs strategically. Plans should be integrated and aligned with the corporate scheme. Management besides should put the aims and ends to accomplish the corporate scheme. The procedure besides involves specifying duties and communicating agencies, placing talented forces to take the executing procedure.

Execute: The procedure involves seting the programs into actions. This entails the executing of the planned activities to accomplish the budgeted net income and loss history, forecasted balance sheet and hard currency flow statement. Normally the programs are for a short clip period covering one fiscal twelvemonth. In most instances it is done in operational degree. In this survey the public presentation will be evaluated sing 2009/10 program budget.

Check ( step ) : The administration so measures the public presentation utilizing the indexs already established. This involves comparing the accomplished public presentation with the budgeted programs. Without mensurating the public presentation, the administration does non cognize whether alterations need be applied to make the budgeted ends or to alter the ends for the twelvemonth.

Act: At this phase, the administration should believe and make up one’s mind on new ways that may ensue in betterment. Here alterations are of import but should be carefully considered if when implemented the consequences will be betterments. Brain ramping takes topographic point at this phase. It is besides from this phase where direction should happen out the root causes of bad or unsatisfactory public presentation and identifies hurdlings to success. As will be explained in chapter three ( subdivision 2.5 ) implementing alterations pose a challenge to many directors. It is hence recommended that a clear and systematic procedure be adopted to do alterations successful. Performance betterment demands alterations. In another words, this is the ‘improvement methodological analysis ‘ phase where direction can believe of betterment attacks such as BSC, Six Sigma, TQM, etc.

1.2 SPONSOR COMPANY PROFILE- The Local Authorities Pensions Fund ( LAPF )

The Local Authorities Pensions Fund ( LAPF ) is a societal security establishment established under the LAPF Act No 9 of 2006. This Act repealed the Local Authorities Provident Act No.6 of 2000.The difference is that the former Act no 6 of 2000 was meant merely for Defined Contribution Plan while the bing Act No.9 of 2006 is for Defined Benefit Plan. LAPF as one of the six societal security establishments in Tanzania was established with the aim of supplying societal security screen to the employees of the local authorities governments, bureaus and Institution owned by Local Authorities. As per the Tanzanian authorities ordinance each of these six strategies was established by different statute law and covers a defined class of people or sector. LAPF has more than 70,000 members each lending ( on a monthly footing ) a sum of 20 % of member ‘s basic wage ( an employee ‘s basic wage ) , of which the employer ‘s portion is 15 % and 5 % is contributed by the employee ( member ) . Apart from the Head Office ( in Dodoma part ) the Institution has five Zone Offices throughout the state covering 4 to 5 parts for each Zone.

Vision, To go one of the best supplier of societal security screen in Tanzania ( LAPF Act )

Mission Statement, To supply societal security benefits with related services to its members. ( LAPF Act ) . In drumhead, the following are the chief maps of the Fund:

Pay benefits to see individual

Improve benefits collectible under the Act

Register individuals required by the jurisprudence to lend to the Fund

Safeguard members parts and other Fund ‘s resources

Invest parts in less hazard and high returns giving investings


For old ages now LAPF uses fiscal steps in measuring the success of the Fund. As the competition in societal security markets becomes an intense and rapid development in concern, trust on fiscal steps becomes questionable. This consequences to some of the fiscal steps to be uneffective and inefficient in measuring the Fund ‘s public presentation from its operations, e.g. how to mensurate client satisfaction. Through the public presentation measuring system any Organisation gets a comprehensive position of how it is executing. LAPF as a performance-driven and achievement-oriented in a competitory societal security industry, needs to keep an efficient public presentation measuring system. The system is used to track the alterations in overall public presentation. Therefore, the research worker aims to suggest the usage of BSC model as the attack that will be applied in measuring and bettering the public presentation of the Fund. LAPF may wish to follow the BSC system in mensurating its public presentation to work out the job of uneffective steps of public presentation late adopted. Therefore at this initial phase the purpose of the survey is non to implement the BSC attack.

Balanced Scorecard involves both fiscal and non fiscal public presentation steps. In 1990, BSC was established by Robert Kaplan and David Norton to complement fiscal measures.The technique has late become celebrated and widely adopted by some Administrations due to the benefits derived from its execution. The application of lone fiscal steps to measure public presentation may non give a existent image on how the Administration performs. This prompted these Administrations to exchange their schemes in measuring their public presentation using critical steps ( both fiscal and non fiscal ) in each of the four BSC positions. Therefore balance scorecard helps direction to understand a comprehensive image of the concern operations grouped into these four classs i.e. Financial, Customers, larning and growing, and internal procedure.

LAPF as the first clip user of BSC will hold to take relevant public presentation steps for each of the above classs maintaining in head the nature of its concern. The acceptance of BSC as a set of steps will assist direction in explicating scheme to accomplish the Fund ‘s aims. It is believed that BSC will convey approximately direction revolution and will supply existent penetration in the operations of the Fund as both fiscal and non fiscal public presentation steps will be employed in measuring the success of its operations.


The chief aim of the research is to happen ways of bettering LAPF public presentation. To accomplish this, the research worker will follow the Balanced Scorecard ( BSC ) model to measure the public presentation of the Local Authorities Pensions Fund ( LAPF ) .The public presentation will be evaluated in each of the four BSC position i.e. fiscal, clients ( members ) , internal procedure, and Learning & A ; growing. In this regard the research worker will compare the expected planned public presentation ( as per the LAPF policy, budget etc ) with the current public presentation as perceived by employees and direction ( resulted from questionnaires and interviews ) . It should be noted that the research worker DOES NOT take or be after for BSC execution. Other aims are as outlined below:

To measure the degree of BSC understanding among employees

To construct positive image of BSC in the eyes of LAPF direction and staff

To carry the Organisation to follow the BSC attack

To suggest a BSC construction relevant to the LAPF demands, aims and operations

To happen out whether the Fund has another alternate method for bettering the public presentation besides utilizing BSC attack

Lay down foundations for farther research on bettering public presentation measuring system.


1.5.1 Main Research Question

What can be the public presentation betterment by execution of the Balanced Scorecard ( BSC ) ? The instance of Local Authorities Pensions Fund in Tanzania ( LAPF )

1.5.2 Theoretical research inquiries

What is Performance Measurement?

How can it be improved?

What is Balanced Scorecard?

How widely is Balanced Scorecard used?

What are the benefits of utilizing Balanced Scorecard?

What are the jobs and /or challenges in implementing the BSC?

How to cut down the opportunities of BSC failure?

What are the prosodies for mensurating public presentation?

Are there any other tools for bettering public presentation measuring besides BSC?

How do they differ from Balances Scorecard?

1.5.3 Empirical research inquiries

How does LAPF mensurate its public presentation?

What does LAPF understand about the BSC?

Is the attack known? To what extent?

Is the proposed BSC relevant to LAPF runing environment?

Will the LAPF direction accept alterations?

How does employees and direction evaluate the current public presentation of the Fund? ( As per the proposed BSC model )

What are the benefits expected to LAPF from the proposed attack?

What are the challenges in the procedure of bettering the Fund ‘s public presentation?

What are the attempts being adopted to better the Fund ‘s public presentation?

Any other alternate besides the proposed attack?


Table 1 below is a proposed BSC model for LAPF as designed by the research worker. This model stands as the chief research country as it was used to measure the Fund ‘s public presentation. The questionnaire and interview inquiries were based on this model to happen out what should be the degree of public presentation ( as planned by direction ) , what is the current degree, and what should be done to better the current degree of public presentation. It is expected that the contents of the BSC ( ends and steps ) may be adjusted after suiting remarks from the LAPF direction and staff.This research does non cover execution of the BSC, the determination on whether to to the full implement the BSC attack lies with the LAPF direction, where the Fund will hold to analyze and be after for the execution procedure.



Vision: To go the best and most preferable supplier of societal security in Tanzania


Fiscal Position

Actions ( Critical Success factors )


Invest the parts received in a extremely and unafraid output investing ( Accurate investing determination devising )

-Return on Investment ( ROI )


-Increase in premium


-Percent addition in Cash Flows


-Return on Assetss

Effective cost decrease

-Percent decrease in cost

Hazard Extenuation

-Percent decrease in hazard happening

-Percent of loss due to put on the line

Budget truth

-Percent mistake in prognosiss


Members Perspective

Actions ( Critical Success factors )


Increase rank base

-Number of new members registered

Members satisfaction

-Frequency of members ailments

-Members Survey evaluation

-Complaints response clip

-Timeliness of service

-Service handiness

Provide seminar and instruction to members

-Number of seminars conducted

-Market portion

Attract more members and retain members

-Number of new members

-Increase in premium

-Retention rate

Increase Benefits Packages

-Number of new bundles

-Lead clip ( clip taken to present new bundle )

Marketing LAPF and its merchandises and services

-Market portion


Internal procedure Perspective

Actions ( Critical Success factors )


Procedure capablenesss

-Percent decrease in payment rhythm clip

Provide benefit bundle on clip

-Claim processing clip

Service betterment

-Number of client jobs reported over a period of clip


-Percent decrease in rework

-Industry quality evaluation

Effective reporting/information system

-Average clip for circulation information

-System handiness

– Percentage of late studies

-Percent of mistakes in studies

Maintain inter departmental squad work

-Number of yearss to pass on feedback

-Information circulation clip


Learning and Growth Perspective

Actions ( Critical Success factors )


Training to employees

-Training clip per employee

-Number of employees trained

Employee satisfaction

-Employee turnover rate

-Chances for authorization and publicities

-Level of freedom of sentiment and suggestions

-Percent of employees suggestions and recommendations put in action

-Percent of complains about salary and inducements

-Response clip to employees ailments

Continuous inventions

-New merchandises /service

– Opportunity degree to demo creativeness

Team edifice and effectivity

-Percentage of empathy degree

-Percentage accomplishment of ends

Table 1.1 LAPF proposed BSC

1.6.1 Strategic Mapping

Strategic map shows the cause-and-effect relationship. Using the four BSC positions, we are able to pull a cause -and -effect logic flow to demo the relationship between them. In simple words it depicts the nexus that exists between the positions. It hence outlines what a company wants to carry through ( financially and to members ) and how to carry through it ( through effectual and efficient internal procedures, supported by competent, motivated and originative employees ) . Figure 1.3 below shows an illustration of strategic map relevant to LAPF operations.

Gross ( Contributions )

Cash flowFinancial

Operating Costss

Contribution Arrearss

Members ailments

Members satisfaction


Claim recycling

Payment rhythm timeInternal procedure

Employee ‘s suggestions

Employee ‘s competenceLearning & A ;

Employee ‘s moraleGrowth

Figure 1.3 LAPF Strategic Map


If LAPF employees lack inducements to hike their morale to work, it negatively affects the clip taken to treat members claims. In bend this brings members ailments that cause hold in subjecting parts in clip. The ultimate consequence of it is deficient hard currency to run, put and pay other donees.

Incompetence employees make mistakes in treating the claims that necessitate make overing the claims. This increases the operating costs that cut down the hard currency flow position.

High employees morale, shorter payment rhythm clip lead to members satisfaction. In bend additions parts that boost the hard currency flow.

Low morale, disregarding employees suggestions and unqualified employees all together consequence to employees dissatisfaction. This may in bend prolong the payment rhythm clip, which consequences to member ‘s dissatisfaction. Finally this consequences to detain in parts which at the terminal affect the Fund ‘s hard currency flow.

Note: Figure 3 shows merely some few steps as indicated in the balanced scorecard. More steps can be added and a nexus with a logic flow be established to demo the cause and consequence relationship between the BSC positions.

1.7 Ethical Consideration

The research was conducted as per the LAPF ‘s codification of moralss. Participants were free, to command their ain willingness to take part, contribute or even to withdrawal. Where confidentiality and namelessness was demanded the survey adhered to this and do certain no injury, hurting or uncomfortableness is caused to any participant. Attachment of ethical issues in each phase of the research procedure from, informations aggregation, analysis and coverage is my precedence consideration. The Fund will be briefed of the research findings.


This thesis comprises of five chapters.

Chapter one: Consists of general debut and the subject to be researched. It besides contains brief accounts of the constructs found in the chief research subject, i.e. Performance betterment and the balanced scorecard.

Chapter two: Consists of all relevant literature refering the balanced scorecard, public presentation betterment, and alteration direction which is really of import to see before set abouting any programme to better public presentation. I personally consider change direction to be really critical and is influenced by several internal and external factors. From this chapter we will hold an chance to understand phases that lead to successful alterations. The common mistakes/errors done by the administration when following alterations ( which are the chief causes of failure ) as explained by John Kotter,1996 are besides found in this chapter. Furthermore the chapter contains other public presentation direction attacks beside the balanced scorecard and a reappraisal on how they relate or differ with the BSC.

Chapter three: Comprises of methodological subdivision. In short questionnaire and interview are the chief beginnings of informations aggregation for this research. In add-on to this, it besides includes sampling and respondents information.

Chapter four: Includes the consequences and treatment thereof. It besides includes analysis of informations collected through questionnaire and interview.

Chapter five: Explains the decisions and recommendations based on the information collected.


This survey has the undermentioned restrictions ;

This research does non cover execution of the BSC in LAPF. It is limited to the usage of the proposed BSC model to measure LAPF public presentation, where by the Fund ‘s aims and their related steps are more specific. It is from the findings, decisions and recommendations LAPF direction may believe and be after the execution of this attack.

The survey is limited merely to the Local Authorities Pensions Fund due to clip and fiscal restraints. It does non cover any other house in the societal security industry in Tanzania, neither LAPF public presentation will be compared to predating old ages ‘ public presentation

The planned figure of interviews to be conducted could non be reached as the targeted staff were out of the office for different grounds. In this respect the research worker decided to increase the figure of questionnaires to be supplied from 30 to 40 in order to roll up as many informations as possible.

The indexs and measuring tools in this survey make usage of secondary informations in mensurating public presentation. Secondary information may hold inaccuracies. Inaccuracies in informations could ensue in consequences which are undependable and unsuitable for mensurating public presentation and in accomplishing marks.

Weights have non been placed on any peculiar dimension or end country. LAPF precedences change with altering national Social Security demands and it may be necessary to accurately put extra weights on some dimensions to accomplish the coveted result.