3. Hierarchy of indices of the potential perspective 'employees'
Figure 4: Hierarchy of indices of the potential perspective
The hierarchy of indices of the customer perspective portrays the connection between the perspectives of the Balanced Scorecard und the created shareholder value. If the single perspectives of the BSC are considered as business sectors of a company, it becomes obvious that the sum of the predicted cash flows represents the calculation basis for the shareholder value, which is composed as follows according to Rapport:
Present value of the company cash flows
+
Present value of the residual value
+
Market value of the securities quoted on the stock exchange
Company value

Market value of the debt capital
Shareholder Value
Subsequent to the calculation of the employee profit contribution the costs that do not affect payment are added and the investments are subtracted in order to gain the employee cash flow. With regard to the potential perspective of the Balanced Scorecard, especially investments in the personnel development/educational development are to consider, even if these investments are entered as expenses and consequently cannot be evaluated from the capital budgeting perspective. Here, this part of the costs is consciously assigned to the investment field in order to stress that especially the further education represents an investment in the future of the whole company.
Afterwards, the employee cash flows for a defined period of time are predicted and multiplied with the weighted average cost rate of capital (WACC).
The prediction of the employee cash flows is done by the following formula:
ECF = Employee Cash Flow t = single period of the planning phase from 0 to n (1+d)t = discount factor of the period t respectively n.
With the abovementioned formula, a factor that expresses the current performance of the employees is determined. This factor, based on the employee cash flow, can be used as system of measurement to predict the increase of the future surplus of incoming payments. The factor may be formed by relation of the current employee cash flow to the discounted sum of previous years as well as in relation to the discounted prior year cash flow. A factor that is > 1 implies a continuous potential of increase, related to the period under consideration.
After the employee cash flows are predicted, they can be introduced in the calculation scheme of the shareholder value, illustrated above. Now one can construe, if the education was appropriate in an economic sense respectively if the investment has amortized and is profitable.
4. Summary: Berliner Balanced Scorecard Approach
This contribution is the final of four essays, which were published in the prior one and a half years in DStR. The first contribution tackled the 'New(er) Approach to a Quantified Combination and Indexlinking of the Balanced ScorecardPerspectives'. The subsequent two contributions deepened the perspectives, namely with the titles 'Value Added Calculations as Instruments for Financeoriented Components of Success and Personnel Analysis' as well as 'About the Quantification of the Customer Perspective of the Balanced Scorecard'.
From the beginning the authors wanted to show, that the perspectives of the Balanced Scorecard from Kaplan and Norton can be linked economically. By means of a performance approach, the shareholder value approach and a corporate appraisal, this approach can be indexlinked over time. They aimed at illustrating, that each perspective of the BSC is calculable, transparent and designable by means of wellknown instruments and techniques of the annual accounts, the controlling of costs, the financial controlling, the shareholder value approach up to the quality management as well as further fundamental considerations to business functions.
Statements, the Balanced Scorecard is not measurably cardinally and/or a strategy calculation up to the accounting or vice versa is not conceivable, which can be found constantly in the literature and even are fostered by consulting companies, has been disproved by these essays.
Of course, the contributions only show the tip of the iceberg. The combination, indexlinking, and the depth of each perspective can be driven further and combined also differently by the Berliner Balanced Scorecard approach.
The authors consider necessary to give the complex and calculable approach an own name. Since the approach was developed in Berlin, they decided to choose the name 'Berliner Balanced Scorecard Approach'.
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