Scorecard Best Practices

Communicating Appropriate Reasons for Scorecard Implementation

While scorecard systems are implemented for a variety of reasons, to foster motivation they must be implemented for appropriate reasons.

Underlying reasons for implementing scorecard systems can be grouped into two general categories: operational and strategic. Operational reasons for using scorecards include:

Being able to measure people, projects, and strategy

Need to measure performance at different levels in the organization

Need a way to systemize existing scorecard process and provide data more frequently

Need to correlate measures

Need to enforce and monitor regulation compliance

Need to track progress toward achievement of organizational goals²

Need to link compensation to performance³

Typical strategic reasons for implementing a scorecard system include:

Need to make strategy everyone's job

Strategy and objectives are too abstract

Need to communicate strategy to everyone simply and clearly

Translating strategy into operational terms is difficult

Need to align employee behavior with strategic objectives

Need to link and align (and realign) the organization around strategy

A new business opportunity (expansion, new client, etc.) requires it

Results from the SHAPs Best Practice Group indicate that scorecard systems achieve greater success when they are implemented for strategic reasons—to support the achievement of strategy. More and more organizations are citing strategic enabling themes when stating why they have decided ...