Developing a Comprehensive Balanced Scorecard for the Banking Sector in Bangladesh: An Empirical Study

Md. Babar, Mahmuda Akter

Abstract


This study is aimed to develop a comprehensive set of performance measurement
variables or Key Performance Indicators (KPIs) from Balanced Scorecard (BSC) perspective
serving as a benchmark or basis for performance measurement and management system in
the banking industry in Bangladesh. The study also analyzed the perspective of the Balanced
Scorecard (BSC) that has significant impact on the performance of banks. Here, stratified
random sampling technique has been used to select the 26 banks as the samples of the study.
The respondents of this study are the top managers and responsible senior officers of each
sample bank. Data have been collected through self-administered questionnaires. A fivepoint
Likert scale ranging from 1 (never) to 5 (always) has been used to assess the extent to
which a bank uses the performance measurement variables. From the factor analysis, fifteen
factors are extracted explaining a total of 73.84% of the total variance. The regression
analysis reveals that the performance of banks is significantly and positively associated with
the learning and growth measures usage of Balanced Scorecard (BSC). Finally, the
researchers believe that the contribution of this study is very much relevant, significant and
pragmatic for the banking sector in Bangladesh.


Keywords


Balanced Scorecard (BSC), Key Performance Indicators (KPIs), factor analysis, Performance measurement and management system (PMMS).

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ISSN-1682-2498