Scorecard Best Practices

Define and Communicate the Reasons for and Benefits of Implementing a Scorecard System

In addition to the communication of the organizational strategy, it is important to communicate the reasons for implementing a scorecard system. Most people are naturally wary of the unknown, and that is true of a new measurement or management system. Unless fully explained, employees are likely to take a negative view of how the results might be used—is it a stick or a carrot (is it used to punish or reward)?

When employees understand the purpose for the scorecard system, they have a better understanding of how they are expected to interact with it. If the reason it is implemented is to track strategy and to lead upper‐level executives in strategy review meetings, then the first‐line managers and employees will likely seldom see it or need to interact with it. If the purpose is to help monitor operations critical to strategy (where data is updated frequently), and the organization plans to reward employees based on achievement of targets, then the operational managers and employees will take more interest in monitoring it. The scorecard should never be perceived as a punitive methodology, but one that encourages the best for the organization and its employees. One organization that did not have significant benefits from its scorecard system said, “Objectives [of the system] have not been well communicated and many people view it as a punishment method.”

Employees and managers want to understand ...