Over the years, as the Balanced Scorecard (BSC) has been embraced by the human resources department (HR), the framework has been used to more actively drive individual performance. Right now, there are hundreds of companies using what are called Individual Balanced Scorecards to drive employee performance. While the intention is good, the designs tend to be bad. Here's why.
Overenthusiastic HR professionals and consultants have taken a full BSC design meant for an enterprise and applied it to individual employees. Consider this: Normally, a BSC for a retail banking enterprise would be owned by the entire leadership team of about 10 people. It would have 30 measures and 20 objectives. So, what happens if the HR head uses that enterprise BSC to assess the individual performance of the head of retail banking? Someone's going to get a pretty rigorous annual review!
My question is simple. If an organization finds it difficult to deliver on 30 targets or 20 objectives, how could a single individual be able to do that? Some HR officers have gone one step further and connected the individual's annual review framework, which includes promotion and compensation reviews, to this major mistake. I have seen some of the most competent HR teams at major global banks do exactly that, so nothing surprises me anymore.
The Right Way
There is a right way to implement individual scorecards, but first we must ...