Should HR encourage a modification of the organizational scorecard?

Many organizations evaluate their business and management success with a scorecard-a reporting framework that created measures to manage all parts of a business, even getting companies to focus upon intangibles like the customer view. The problem with the scorecard could be that it doesn't create any significant improvement in the long-term performance of the organization. According to David Giannetto, the scorecard keeps employees focused on company-level summary information about what has happened in the past without pointing each individual executive, manager and employee toward problems and potential problems that they can personally affect. He says that the scorecard leaves management waiting for the next reporting cycle to them how they did, when instead they should be focusing on where their organization is going and actively taking a part in getting there.

To assist executives, managers and employees in getting focused on and impacting the organization's performance, Giannetto suggests the following:

• Measure performance more than once a month. Traditional, monthly scorecards typically become something a manager must answer for, keeping the organization focused on the past. Meanwhile, business is moving forward while execution and the future are not getting the attention they deserve.

• Tell employees what is most important. To create high performance, employees need critical information made available to them as soon as they come into work-information that tells them where things are going well, where they are currently failing and, most importantly, where they are going to fail before it's too late and while they can still do something about it. Create a constant reminder that will tell and show employees what is most important for them to focus upon. When they do so, they are helping the organization achieve it's higher goals-whether they know it or not.

• Reach the right people with the right metrics. High-level numbers that are important to "the organization" do not always resonate with employees who focus their attention on the issues or transactions that cross their desk. It is unrealistic to think that employees will take the information presented on a once-a-month scorecard into account when they have to make decisions every minute of every day. They simply might not care about the same metrics that will interest the CEO. To be successful, companies need to understand the connection between their organizational goals and each department or unit's ability to positively or negatively affect their achievement. Meaningful metrics can be created and delivered specifically to the responsible employees.

• Be timely. Scorecards are usually out-of-date by the time they reach their intended destination because of the time it takes to generate and publish them. Instead, get the right information into the hands of those who need it so they can make better, timelier decisions by utilizing technology. For example, reviews can be emailed to the appropriate employees.

• Explain why. Traditional scorecards don't explain why the performance was measured as it was. It may tell you that your costs are up, but it won't reflect that employees were working around the clock to generate more revenue. Implement a system that puts the why right in the data used to generate the metric in the first place.

• Clear up the vision. Your organization's scorecard should force the business to understand which departments and units truly have the ability to impact the achievement of strategic objectives.

SOURCE:The Performance Power Grid: The Proven Method to Create and Sustain Superior Organizational Performance, written by David F. Giannetto.