Response to the following problem:
Several years ago, United Parcel Service (UPS) believed that the Internet was going to change the parcel delivery market and would require UPS to become a more nimble and customer-focused organization. As a result, UPS replaced its old measurement system, which was 90% oriented toward financial performance, with a balanced scorecard. The scorecard emphasized four "point of arrival" measures, which were:
1. Customer satisfaction index-a measure of customer satisfaction.
2. Employee relations index-a measure of employee sentiment and morale.
3. Competitive position-delivery performance relative to competition.
4. Time in transit-the time from order entry to delivery.
a. Why did UPS introduce a balanced scorecard and nonfinancial measures in its new performance measurement system?
b. Why do you think UPS included a factor measuring employee sentiment?