title: Quantitative performance targets by using balanced scorecard system: application to waste management and public administration.
abstract: This article demonstrates how decision-makers can be guided in the process of defining performance target values in the balanced scorecard system. We apply a method based on sensitivity analysis with Monte Carlo simulation to the municipal solid waste management system in Loulé Municipality (Portugal). The method includes two steps: sensitivity analysis of performance indicators to identify those performance indicators with the highest impact on the balanced scorecard model outcomes; and sensitivity analysis of the target values for the previously identified performance indicators. Sensitivity analysis shows that four strategic objectives (IPP1: Comply with the national waste strategy; IPP4: Reduce nonrenewable resources and greenhouse gases; IPP5: Optimize the life-cycle of waste; and FP1: Meet and optimize the budget) alone contribute 99.7% of the variability in overall balanced scorecard value. Thus, these strategic objectives had a much stronger impact on the estimated balanced scorecard outcome than did others, with the IPP1 and the IPP4 accounting for over 55% and 22% of the variance in overall balanced scorecard value, respectively. The remaining performance indicators contribute only marginally. In addition, a change in the value of a single indicator's target value made the overall balanced scorecard value change by as much as 18%. This may lead to involuntarily biased decisions by organizations regarding performance target-setting, if not prevented with the help of methods such as that proposed and applied in this study.
authors.affiliation: CENSE - Center for Environmental and Sustainability Research, Lisbon, Portugal Loulé City Hall, Loulé, Portugal.
authors.forename: Paula
authors.initials: P
authors.lastname: Mendes
authors.affiliation: CEris - Civil Engineering Research and Innovation for Sustainability, Lisbon, Portugal Faculty of Sciences and Technology, University of Algarve, Faro, Portugal.
authors.forename: Luis Miguel
authors.initials: LM
authors.lastname: Nunes
authors.affiliation: CENSE - Center for Environmental and Sustainability Research, Lisbon, Portugal Faculty of Sciences and Technology, University of Algarve, Faro, Portugal mribau@ualg.pt.
authors.forename: Margarida Ribau
authors.initials: MR
authors.lastname: Teixeira
mesh_terms: D003198:Computer Simulation; D003247:Conservation of Natural Resources; D006801:Humans; D008962:Models, Theoretical; D009010:Monte Carlo Method; D011174:Portugal; D018505:Waste Management / Q000379:methods*
keywords: Balanced scorecard; Monte Carlo; municipal waste; performance indicators; targets