Motivating Your Employees: Develop a Performance Scorecard

Where do you want your business to be in one year? How are you going to get there?

Formulating the answers to these two questions is a good start, however, how are you going to get your followers all cooperating and forging their efforts together in the same direction? How are you going to track their progress and make periodic corrections in planning and actions?

Lack of accountability and developing a sense of ownership among employees can be a common problem in any organization. To hold employees accountable you must be able to measure performance. If you cannot periodically measure performance, attaining goals will be difficult.

I would like to share with you the thoughts from two trade magazine articles by David McMahon and Stephanie Laitala that offered several workable ideas toward over coming management performance challenges.

The key to accomplishing your business objectives is to develop a performance scorecard. A scorecard is used to periodically measure the progress toward achieving your goals. If a business does not have some type of reporting strategy in place, accountability becomes murky and goals get lost in the day to day operational clutter. To move forward toward stated goals, you must either rely on something similar to a performance scorecard, where you can periodically review measured results and adjust planning and actions accordingly, or you leave your future to chance.

The balanced scorecard in this example was introduces by Drs. Robert Kaplan and David Norton to readers of the Harvard Business Review in the 1990’s. The design or structure of the scorecard consists of an overall goal in the center surrounded by four boxes. The overall goal is no doubt a financial one, like achieving a specific before tax operating profit, say $100,000.00.

The four surrounding boxes consist of the four performance factors necessary to achieve your overall goal. The four performance factors consist of:

a) financial measures
b) customer measures
c) internal business process measures
d) employee learning and growth measures.

Within each of the four performance factors you must make the following columns: what is the “objective” or “goal” which must be reached to accomplish your overall goal of a $100,000.00 before tax profit. For example, within the financial measure box a goal may be to increase gross profit margins to 44 percent. Second, you must list the “actions” required to accomplish the goal of a 44 percent gross margin. Third, you must list “who” is responsible for achieving the goal. And fourth, you need “date monitored” and “measurement” columns to complete as you periodically review the report card.  Each of the four performance factor boxes would contain these five points.

A performance scorecard keeps the employees focused on the big picture. It is powerful when those responsible get together in a room to review measurable numbers; no one wants to be the one who did not meet their targets. As they say, what gets measured gets done. When the performance scorecard spells out a clear picture of what needs to be achieved to be successful, there is a clear connection in people minds between actions, goals, and the people responsible. With the scorecard, people start proactively taking actions to achieve the numbers for which they are responsible. Periodic reviews of the report card give opportunities to make the necessary adjustments to stay on track.

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