A study of a nursing department performance measurement system: using the Balanced Scorecard and the Analytic Hierarchy Process.

The health care industry is under pressure from government and private entities as well as from market conditions to contain costs. In an effort to respond to these pressures, the case hospital in this study implemented a Balanced Scorecard (BSC) in January 2003 and integrated it with the hospital's formal incentive plan for non-physicians in January 2005. The nursing department's performance improved in the 2 years following the introduction of the plan. This study contributes to the literature by demonstrating the performance improvement that results from integrating the BSC with an incentive plan in the nursing field. The results provide insight into the current BSC performance metrics applied by the case nursing department, and could be used as guidelines by other health care organizations that wish to implement BSC-based incentive plans.