A Balance Score Card (BSC) is being used by many hotel managers to help them plan their strategic goals!

Gartner Group suggests that more than half of major companies in the US, Europe, and Asia are using the BSC. Initially, the balanced scorecard includes the hotel or department overarching objectives, measures (key performance indicators or KPIs), targets for your KPIs, and the initiatives that can help you reach those targets. Additionally, these four elements align with the company’s mission, vision, and values, and each of these four elements are developed into four different perspectives: financial, customer, internal business processes, and staff. For instance, reducing wage cost could be an overreaching objective when looking at the financial perspective. Then, the measures or KPI’s would be the wage costs percentage as a total of sales.

Equally important, are the targets for your KPI’s which will be planned using the current percentage of the hotel and by decreasing it as much as possible to set the target percentage. Finally, to reach the objective, you could discharge employees that are not actively participating in the hotels goals or employees that are inefficient. One could also say that, the balanced scorecard is a strategic planning and management system that organizations use to either communicate what they are trying to accomplish or to align day – to – day tasks with strategic thinking. It is also used to prioritize projects, services and products but also to measure and monitor progress of strategic targets.

The BSC model is one of the best models for strategic goal planning due to the fact that it can be applied in almost all the departments in the hotel in order to clearly structure their strategic goals and communicate them to the rest of the team. Furthermore, studies presented by Denton and White in 2000 summarized some results of the BSC implementation in Hilton Hotels and Marriott franchisee White Lodging Services.

According to these studies, the BSC helped management to focus on both long-term and short-term goals and identify negative trends before they affected the financial results of the hotels. Yet, BSC systems require a high investment due to the fact that a company must manage its system actively and constantly, which comes with time and financial costs.

Surely, balanced scorecards will provide you with a broader internal focus, but it doesn’t focus on a full external picture. The BSC does not factor in other key performance indicators, such as your competitors or changes to your business environment. In brief, BSC’s have advantages and disadvantages, but in the end of the day, it is the main tool that most managers use for strategic goal planning.