Scorecard Best Practices

Measures Used

Measures used on scorecards need to be carefully selected. Some scorecard implementations have found improvement in motivation when those responsible for an area are active participants in the choice of the measures and the process of setting targets. Involvement in the entire process fosters complete buy‐in and, ultimately, more motivated employees.

One organization that suffered because the responsible individuals were not part of the process commented, “Too many subjective measurables, and the manager was given no input to the measurables.” In this case, the organization felt it had received no benefits from its scorecard system.

In another example, an organization began to see improvement in employee acceptance of the system. One employee commented that they “… [had] varying degrees of acceptance but as we link to strategic and business plans and performance management systems, acceptance will grow.” The organization had learned lessons and were moving toward correcting the situation.

Another respondent had gotten the process correct and was enjoying significant benefits. It chose their measures “based on consensus with the functional areas and final approval from the Managing Director.”

Gulf States Paper Corporation concluded that measures appearing on scorecards must be the same as those used for compensation. When it began implementing a scorecard system, the measures used to monitor its strategic performance was not the same as those being used to compensate ...