The Dynamics of Organisational Performance Development of a Dynamic Balanced Scorecard

Performance indicators are key feedback drivers of organisation dynamics. However, the extensive evaluation literature gives no scientific basis for the selection or testing of the opportunities of such indicators. This paper discusses the development of a “dynamic balanced scorecard” for a federal government department. The balanced scorecard suffers from the limitation of all performance indicator systems, namely that the interrelationships, and especially delayed feedback, between indicators are overlooked. Therefore it is essential to take such feedback into account. System dynamics is an appropriate methodology to achieve this. The paper outlines the modelling of causal interactions between organisational responses to work overload, staff morale and productivity, rework and output quality. The component sub-models and management implications of the dynamic BSC are discussed.