Implementing a strategic balanced scorecard approach to your performance management system? Avoid these five pitfalls

Simangele Mzizi, Fsp Business, 24 Jun. 2014

Tags: implementing a balanced scorecard, performance management system, balanced scorecard, performance management

Experts behind the Practical Guide to Human Resources Management say, implementing a strategic balanced scorecard approach to your performance management system will help you to execute your company’s strategy by cascading overall organisational objectives throughout the organisation.

They add that this approach helps to create an understanding of the role and objectives of each department, team and individual in achieving the business strategy.

But when you implement a measurement system such as a balanced scorecard, be sure to guard against the following potential pitfalls and difficulties.

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Lookout for these five pitfalls when you implement this approach to your performance management system

#1: Guard against unclear strategic objectives. This will create uncertainty on what’s important to your company and what the strategy of your company is.

#2: Many companies tend to have entrenched management systems that rely mainly on informal feedback systems and financial measures. These could make it difficult to introduce the balanced scorecard approach, so lookout for this.

#3: Guard against having too many measurement systems in your company. If you don’t integrate these properly, they could create confusion and misalignment of efforts, energy and resources, warns the Practical Guide to Human Resources Management.

#4: Don’t fall into the trap of having a measurement approach that doesn’t touch employees at all levels on a day-to-day basis. This approach isn’t effective.

You must integrate performance measurement into your company’s culture (i.e. way of doing business).

#5: Implementing a balanced scorecard is time consuming. Defining the key measures and collecting the data is an especially time consuming step – this requires leadership to stay focused. So make sure you and your management are well prepared for the task.

There you have it: Developing and implementing an effective measurement system such as a balanced scorecard requires leadership, commitment and hard work. So be sure to guard against these five pitfalls so the whole process can be a success.

PS: The ONLY way to seamlessly protect your business from being dragged to the CCMA every time you have an employee problem is to have a comprehensive HR Policy Manual in place.

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