Today many hospitals are forming integrated health systems that consist of a main hospital, outpatient services, and nursing homes. This causes challenges for hospital executives to align the organizational strategies and main principles with performance measurement and management indicators within all areas of service. The balanced scorecard (BSC) is an option for hospitals to measure not only a company’s financial performance but how the company is satisfying its customers and employees. The BSC is designed to manage strategy not tactics (Kocakulah 2007). As of the year 2000, only about 70 of the country’s 6,000 hospitals were using the BSC method. Part of the reason for lag in adoption is hospitals have always used nonfinancial statistics and believed that they were using measures similar to a BSC already. Unfortunately, this is not the case in terms of effectiveness ( ).
How to implement an effective BSC is the most important question. The single most critical condition in implementing a BSC is the involvement and ownership of the executive team. The approach is usually top-down. A top level BSC is created for the board of trustees, and then is cascaded down the organization to the department level. This is done with a team-based collaborative approach that consists of an “organizational change expert” as the leader (Kacakulah 2007). This “organizational change expert” should be the head of human resources. A HR manager is best suited for this role in many ways in which will be discussed later ( ). In the case study of Peer Memorial Hospital, Harber (1998) explains that a combination of financial and internal approaches: “The “deliverable” is the ability of staff and teams to align accountabilities, activities, and resources in support of the vision and goals of the organization.” It might have been a temptation for Peel to extend the