Balanced Scorecard Usage and Performance of Hotels: A Study from the Tourist State of Uttarakhand, India

Abstract

Tourism is a major driver of economic growth and livelihood promotion in the Uttarakhand state of India. The contribution of tourism to the state gross domestic product (GDP) and employment generation is significant. The expansion of tourism inevitably brings about the development of the hotel industry. Hotels must create effective competitive strategies for survival and use a performance measurement system that meets the requirements of a changing environment. Several studies have been conducted to study the rich tourist potential of the state. However, no research studies are available regarding performance measurement practices adopted by hospitality managers in Uttarakhand for measuring the performance of their establishments. The present study examines existing performance measurement practices used by hotel managers that employ the balanced scorecard (BSC) − an innovative and comprehensive performance measurement framework for assessing the performance and progress of hotels in this mountainous state of India. The results indicate that in spite of using measures from different perspectives inherent to the original BSC, hospitality managers are not aware of the concept of BSC in a formal manner. The study reveals that hotels in Uttarakhand still focus on the use of financial measures as compared to non-financial measures for measuring performance. The study supports the link between hotel performance and BSC measures usage.

Integrated performance evaluation method study and performance based department ranking: a case study

“…Using BSC provides balanced performance management, measuring departments' performance in terms of strategic goals and easy understandable reports for upper management. Kala and Bagri [3] and Neves and Lourenco [4] says non-financial issues are as important as financial issues and BSC provides balance management. Moreover, Güner [5] claimed that Non-Financial issues are as important as financial issues.…”

A Proposed Empirical Model for Adopting Balanced Scorecard as a Tool for Performance Measurement in Hotels

“…In today's rapidly changing environment, hotels should measure their performance to succeed and stay competitive (Kala and Bagri, 2014).…”

Identifying the Optimal Combination of Hotel Room Distribution Channels: A DEA Analysis with a Balanced Scorecard Approach

“…Of the various approaches and models to measure performance, the balanced scorecard (BSC) approach has been identified as one of the best approaches in evaluating a combination of financial and non-financial performance results in service industries (Kala & Bagri, 2014). It has been estimated that at least 60% of the major companies in the US and Europe have adopted a BSC approach to measure performance (Antonsen, 2014).…”

“…In its second generation of development, the BSC further set itself apart from other systems or processes for measuring performance by considering that non-financial measures impacted financial performance (Lawrie & Cobbold, 2004;Norreklit, 2000). There is a growing body of evidence that the key to strategic performance was through the use of both traditional financial measures and non-financial measures (Ittner & Larcker, 2003;Kala & Bagri, 2014), further supporting the basic tenants or categories of the BSC (see Figure 2).…”

“…As discussed in Chapter Two, in the new economic reality no single measure of performance can assist management in successfully outperforming their competition (Brown & McDonnell, 1995). Strategic performance is built on a measure of Knowles, et al, 2004 Inputs both financial and non-financial performance (Ittner & Larcker, 2003;Kala & Bagri, 2014). Banker, Potter, and Srinivasan (2005) provided further evidence through their study on incentive programs in a United States hotel chain that improvements in non-financial (customer satisfaction) measures were the predecessor of improved revenue & profit.…”