Multidimensional assessment of organizational performance: Integrating BSC and AHP

Measurement of organizational performance is a complex issue given that performance is a multifaceted phenomenon whose component elements may have distinct managerial priorities and may even be mutually inconsistent. This paper presents the case of a Brazilian telecom company to illustrate and critically analyze the integration of two methodologies, Balanced Scorecard (BSC) – a multiple perspective framework for performance assessment – and Analytic Hierarchy Process (AHP) – a decision-making tool to prioritize multiple performance perspectives and indicators and to generate a unified metric for the ranking of alternatives (in this case, performance of functional units). An iterative and interactive procedure coupled with an agreement-building approach among managers generates priority values for performance dimensions and respective indicators. The paper discusses the advantages and disadvantages of the design.