Weighted Scorecard

A weighted scorecard is a performance measurement tool that assigns different weights to different measures of performance. The weights reflect the importance of the various measures to the organization. The weighted scorecard can be used to assess overall performance or to compare the performance of different departments or divisions within an organization.

The most common weighting scheme for a weighted scorecard is 70:20:10, with 70% of the weight assigned to financial measures, 20% assigned to customer measures, and 10% assigned to internal business process measures. However, the specific weights will vary depending on the organization and what is being measured.

For example, if an organization is trying to increase market share, they may assign a higher weight to measures of customer satisfaction or new customer acquisition. Or, if an organization is trying to improve profitability, they may assign a higher weight to measures of cost savings or revenue growth.

Weighted scorecards are often used in conjunction with Balanced Scorecards (BSC), which are another type of performance measurement tool. BSCs typically have four perspectives: financial, customer, internal business process, and learning & growth. The weights assigned to each perspective depend on the goals of the organization. For example, if an organization is focused on growth, they may give more weight to the learning & growth perspective than they would if they were focused only on profitability.

While weighted scorecards can be helpful in measuring overall performance, they have some limitations. First