Making decisions using the balanced scorecard and the simple multi‐attribute rating technique

Abstract

Purpose

The purpose of this article is to address the measure selection problem and to propose the use of a multi‐criteria approach to address the problem more effectively. The main objective of this research is to propose a methodology (not a new performance measurement framework) that will support existing measurement framework(s) during the process of performance measurement systems' design, implementation and use, and to advance the decision‐making process.

Design/methodology/approach

Conforming to the most favoured approach, the balanced scorecard is adopted to illustrate the proposed methodology. This paper briefly illustrates the application of the proposed methodology. This illustration is based on a real case study from a Greek financial institution, which has considered the proposed methodology in order to select appropriate measures. The paper begins with a brief literature review on the balanced scorecard, the theory of MCDM and smart technique. In section three the proposed methodology is presented and each of the stages involved. The paper then illustrates the proposed methodology.

Findings

The greatest significance of the methodology suggested here is that it provides a structure to guide decision makers through the process of measure selection. Criteria must be identified and considered systematically, as must alternatives (i.e. measures).

Originality/value

While the smart was chosen to select appropriate measures for the balanced scorecard, the basic approach used in formulating the problem serves also as a framework for the application of other multi‐criteria approaches to this problem as well as to other performance measurement frameworks. Ultimately, better quality decisions will result; both as a consequence of the support provided by the multi‐criteria tools and as a result of a structure that will help the decision makers to better understand the issues associated with the problem involved.

Citation

Valiris, G., Chytas, P. and Glykas, M. (2005), "Making decisions using the balanced scorecard and the simple multi‐attribute rating technique", Performance Measurement and Metrics, Vol. 6 No. 3, pp. 159-171. https://doi.org/10.1108/14678040510636720