Ernst & Young on the Balanced Scorecard

My all-time favorite introduction to the Balanced Scorecard was created by some brilliant people in Ernst & Young's Swedish office in 2000. I finally found a cached version of this video on Google's servers so check it out while you still can!

Click here to see the video.

Individual Performance Factors Based on Kaplan and Norton’s Balanced Scorecard

For those readers who want a more detailed list of actual performance metrics that may be used to measure individual performance, this list has been successfully used in several settings, including a multinational's contact center. Each of the four cells in the balanced scorecard matrix are represented. However, instead of the corporate-level goals, this outline breaks the metrics down into those that should be used to measure individual performance. For companies that want to roll performance up (as opposed to cascading objectives downward), aggregate results of individual team members should be used as the performance objectives of that team's leader. All direct reports roll up to their boss at all levels of the organization.

Productivity & Process

• Quantity of work completed

1. Number and scope of activities completed
2. Percent of work completed on current projects/assignments

• Efficiency & timely delivery

1. Speed of work relative to expectations and peers
2. % of deadlines met
3. Efficient use of down time
4. Efficient use of people involved
5. Efficient use of tools and resources
6. Efficient use of money

• Quality of work

1. Valid
2. Precise/concise
3. Verified as accurate
4. Met requirements and scope
5. Consistent look and feel
6. Clear and coherent
7. Justifiable content (not too much, not too little)
8. Solid craftsmanship
9. Organized and planned (and plan executed)
10. Thorough
11. Applied best practice(s)

Impact on Bottom Line

• Impact on other employees, leaders, customers, company, industry

1. How actions or results affected direct reports
2. How actions or results affected peers
3. How actions or results affected self
4. How actions or results affected the boss
5. How actions or results affected internal customers
6. How actions or results affected external customers (Travel Partners or guests)
7. How actions or results affected the company
8. How actions or results affected the industry (cruise, travel, hospitality, or function)

• Increase revenue

1. Dollar amount that the company made as a result of the employee’s actions
2. Projected impact that actions will have on company revenue
3. Unintended consequences (positive or negative) measured or observed

• Increase customer loyalty

1. Quantified increase in customer loyalty as a result of the employee’s actions
2. Projected impact that actions will have on customer satisfaction
3. Unintended consequences (positive or negative) measured or observed

• Increase in productivity

1. Quantified increase in company, team, and/or customer productivity as a result of the employee’s actions
2. Projected impact that actions will have on productivity
3. Unintended consequences (positive or negative) measured or observed

• Increase in quality

1. Quantified increase in company, team, and/or customer accuracy and/or precision as a result of the employee’s actions
2. Projected impact that actions will have on quality
3. Unintended consequences (positive or negative) measured or observed

• Reduce costs

1. Quantified reduction in company, team, or customer spending or expenses as a result of the employee’s actions
2. Projected impact that actions will have on costs
3. Unintended consequences (positive or negative) measured or observed

• Reduce cycle time/process time

1. Quantified reduction in the time it takes to complete company, team, and/or customer processes and/or activities as a result of the employee’s actions
2. Projected impact that actions will have on activities, processes, and systems
3. Unintended consequences (positive or negative) measured or observed

Customer Satisfaction and Loyalty

• Compliment/Complaint ratio

1. Positive vs. negative customer and employee reactions
2. Unsolicited compliments vs. complaints

• Identified and met or exceeded expectations

1. Number of projects where stakeholders mapped (identified and their position documented)
2. % of stakeholders who confirm their expectations and requirements were met

• Customer satisfaction survey results

1. Results of regularly-scheduled surveys
2. Results of solicited customer surveys

• Impact on team credibility

1. Number of times that personal actions brought the team into question
2. Number of times that personal actions helped the entire team gain respect or recognition

• Continuously improving

1. Results improved for same solutions or activities
2. Streamlining processes, procedures, policies, or methods

Learning & Growth

• Organization’s core competencies assessment

1. Self vs. boss ratings
2. 360 ratings

• Position competencies assessment

1. Self vs. boss ratings
2. 360 ratings

• Error reduction/repeat ratio

1. Number of errors vs. last time on like activities
2. Number of mistakes by level of impact

• Increased autonomy

1. Amount of time spent getting specific direction (whether sought or given)
2. Self-regulated efforts
3. Proactively seeking solutions
4. Focusing on the right objectives/results

• Creative or new solutions applied

1. Number of new ideas sought out
2. Number of ways existing ideas used in new ways
3. Number of existing ideas adapted to new situations
4. Number of completely innovative solutions generated

You can clearly see the connections between this post and my earlier posts on performance management topics. I hope that this, more inclusive and thorough, review of individual performance helps you build a scorecard for the members of your team.

Facilitated Job Analysis Meeting

At the core of any usable human capital management system is a set of competencies that drive the activities that lead to desired results. The goal is to have the right people (those with the right aptitude, knowledge, experience, skills, abilities, and traits) doing the right work at the right time the right way. If all of these factors have been optimized then your organization will achieve superior results. Tieing this concept to Kaplan and Norton's balanced scorecard, employees that know or have access to timely information can efficiently and effectively execute the company's processes, which leads to customer engagement and loyalty, which drives the bottom line. There are a lot of research papers (of course some are self-serving white papers created by vendors of various products, but many other independent studies also exist) that can be referenced to see actual results from real companies.



The simplest method for identifying the most critical competencies requires you to work backwards toward them using the following job analysis methodology:

1. Bring together team leaders and top performers from the position in question.

2. Have that group define the most critical objectives for anyone in that role. Typically, this facilitated discussion is best guided by reviewing the balanced scorecard methodology. Most positions will include objectives in the following areas:

- timely and accurate completion of core duties, including adherence to laws, rules, guidelines, processes, etc., (outcome is nearly flawless execution of duties);

- effective establishment and management of customer expectations and perception (outcome is an engaged and loyal internal or external customer);

3. Once the group has agreed upon the top 3 to 5 objectives have them focus on one objective at a time and identify the most critical activities that someone in the position should flawlessly execute to achieve the best possible outcomes against that objective. Some activities may impact results against more than one objective. However, list that activity under each affective objective.

4. After the activities have been defined dig into each activity and document the most importance competencies that will lead to effective and efficient execution of that activity. Competencies should include experiences, knowledge, skills, aptitude, abilities, and traits, including personality characteristics. Again, these may be repeated across several activities, but go ahead and list them under each activity that the competency supports.

5. Define each competency so that it is clear exactly what is meant by the lable that each competency was given.

6. Adjourn the group, but prepare them for future meetings during which you will ask them to help define metrics that will tell employees whether they are meeting those objectives or not, leverage their collective intelligence when piloting training for leaders of teams that include members in the role that was analyzed, and other related discussions.



In a later post I will share techniques on how to segregate the competencies into price of admission or new hire training categories, how to assess existing employees against the competencies that you fleshed out and defined. I will also help you identify how to turn the activities into training for new hires and the entire job analysis into training for team leaders.