Scorecard Best Practices

Use of Targets

The use of targets in a scorecard system can have a motivating or de‐motivating effect on employees and management, depending on how they are created and used. Peter Drucker said: “If you can't measure it, you can't manage it,” but without a target it is difficult to know whether results are good or bad. One respondent to the SHAPs study indicated that for them “[use of] targets [is] key for all but the ‘softest’ of aims.” Another organization stated that if measures truly are aligned with the strategy, then “the targets make it clear what needs to be achieved each year to achieve the vision.” Exhibit 3.2 illustrates a scorecard for a strategic objective Acquire New Products. It contains three measures used as indicators of success for this objective. A measure's result by itself, however, does not motivate the owners of the measures to take action. Unless they can see how the measure is performing against expectations, it is difficult to get excited about the measure's performance.

Exhibit 3.2: Scorecard Containing Measures and Results

Exhibit 3.3 shows how the same scorecard can provide a better frame of reference when target values, status indicators, and trend symbols are included. Visual cues enable the owner to quickly evaluate the measure's performance. Well performing measures can be celebrated, and remediation plans for poorly performing measures can be quickly ...