AN EVALUATION ON THE PERFORMANCE OF ZAKAT DISTRIBUTION SYSTEM FROM CUSTOMERS’ PERSPECTIVE

Abstract

Zakat distribution is a highly debatable issue among the public and academicians. Dissatisfaction with the way institutions manage and distribute Zakat funds is the main concern. Simple analysis on the published document revealed that, there are huge amounts of undistributed Zakat and the distribution procedure is limited and complex when compared to the method of Zakat collection. Considering this issue, firstly, this study observes the performance of Zakat institutions in East Coast region and aims to identify the level of satisfaction of Zakat recipients on Zakat distribution. Secondly, this study aims to propose a Balanced Scorecard approach (BSC) to be adopted by Zakat institutions. In addition, this study also introduces the fifth element to the original BSC model in efforts to improve the performance of the existing Zakat distribution system managed by Zakat institutions. To achieve these objectives, analyses of published documents, interviews and questionnaires were conducted. The results from document analysis show that Zakat funds were not fully distributed to the eligible recipients. Furthermore, there is also no proper disclosure on the undistributed amount in the Zakat institutions financial report. Based on interviews with key informants in the institutions, there is no proper system that can fully assess the organization in every management aspects and it is the right time to introduce one. Thus, the introduction of BSC in improving Zakat institutions performance may result to a better performance of the institutions. It is hoped that the results of this study would assist Zakat institutions to improve their performance. Finally, the public and stakeholders will have a deeper understanding about the management of Zakat institutions.