Scorecard System Essay - 1369 Words

When an organization implements any management control tool, the cost/benefit balance is vital. The decision to deploy a scorecard system requires the same analysis. The costs of implementing a new tool are relatively easy to appraise, but often, theres a lack of reliable information about the benefits. This article explores the extent to which organizations have realized significant benefits from using a scorecard system. (We use the term quot;scorecard systemquot; to include both the scorecard as a control tool and the process, or technique, of integrating the scorecard system into the overall performance-achievement cycle of the firm.) Over 150 service, manufacturing, and government organizations have responded to an on-line†¦show more content†¦A related observation is that employees in the SBG both accepted the scorecard system and used it as an effective management-control tool, whereas there was only minimal acceptance and use in the NSBG. Often, the benefits of a scorecard system are soft ones, but organizations in our survey also reported documented benefits such as a reduction in overheads of 25% in three years and quot;significant improvement in employee satisfaction and the highest sales and profit ever.quot; This result isnt unexpected: if communicating strategy and aligning employee behaviour with strategy arent top priorities of a scorecard system, employees wont see value in using the system. Compensation links Employees value whats measured but too often whats measured isnt of value to the organization. The study reveals a much stronger link between measures appearing on the scorecards and the compensation and reward system for the SBG than for the NSBG. As one company noted, quot;Employees throughout the organization have become more aware of business plan goals and objectives and strive for higher performancequot; due to scorecard implementation. Another company noted that the system resulted in a significant improvement in employee satisfaction. As almost all agree, measures motivate - one way or another. While we recommend that you link scorecard measures to compensation and rewards, you should also exercise care in doing so. Taking a year orShow MoreRelatedThe Balanced Scorecard Management System2420 Words   |  10 PagesBalanced Scorecard Management System Shane A.S. Ritchie Managerial Accounting BUS 7800 Professor Achilles Ottawa University Abstract The goal of this essay is to focus on theory and implementation of the Balanced Scorecard system. Because of the structured generic approach of the methodology, the Balanced Scorecard has gained its popularity as means of evaluating performance and reporting quantitative performance results. The balanced scorecard is a strategic planning and management system thatRead MoreThe Balanced Scorecard As A Strategic Management System777 Words   |  4 PagesNorton. 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