Scorecard Best Practices: Design, Implementation, and Evaluation

Article excerpt

Scorecard Best Practices: Design, Implementation, and Evaluation

By Raef Lawson, Denis Desroches and Toby Hatch

This book synthesizes the results of a number of studies on scorecard practices throughout the world in order to formulate the essential ingredients underlying the most successful practices.

The book is largely based on two survey studies: a North American online survey receiving 150 useable responses from 2002 to 2004; and an international survey receiving 382 useable responses from 44 countries from 2004 to 2006. The international survey includes respondents from Asia, the Middle East, South Africa, Latin America, Canada and the United States.

The criteria the authors developed for best practices were:

* a system in existence for more than one year.

* a system considered to be a "vision driver."

* a system facilitating achievement of "sustainable alignment."

* a system achieving significant benefits.

Some of the issues covered in the book include: motivating employees to use scorecards, designing the framework for a scorecard system and implementing scorecards. The last chapter provides a checklist of best practice factors, followed by a digest of eight case studies on scorecard management, including one government agency-the city of Boston.

Scorecard systems, also called balanced scorecards or scorecards, can improve communication of corporate strategies and changes in such strategies, to align business divisions with these strategies, and thus link employee behaviorto these strategies. The principal attributes of a scorecard include (p. 7):

* many types of measures.

* key performance indicators.

* cause and effect map (link strategic objectives to actions).

* ability to collaborate on results.

Scorecards are used for operational control, emphasizing key performance indicators for control purposes, for tracking inputs used to produce outputs, and for strategic management, accenting desired targets and managers' creativity in achieving those targets and the overall goals of the organization. Scorecards, which may be initiated by the board of directors, top management, middle management or lower-level management, stress the concept of a unified organization, involving teamwork and the need for continuous improvement.

Whatever the specific purpose of the scorecard, the organization has to adequately explain its rationale to all the affected parties. …