Using Employee Scorecards to Clarify Employee Expectations

Think about how coaches use scorecards in sports. They track how a player is doing faced against several challenges. The pitcher, the pitches, the setting, and even the weather affect their performance. The team’s staff compiles this information to guide the individual’s training and place them on the roster. Winning the game is the ultimate goal. The stats simplify and clarify where the player fits into the grand scheme.

Employee scorecards should be as simple, but they often aren't. Foul lines, strike zones, yard markers, goal posts, referees, and the rules of the game are all very clear in sports. At work, however, those things often go undefined. It's up to the manager to define them and ideally, to make them as simple as the back of a baseball card. At work, the metrics may differ, but the aim is the same—keeping everyone aimed at the same win. By taking responsibility for your team's scorecard you will create the environment your team needs to be able to win together. 

The History of the Scorecard

Arthur Schneiderman of Analog Devices created the first balanced scorecard in 1987. Schneiderman recognized the need for cohesiveness and clarity in developing the business’s corporate strategy. He saw the disconnect between management and the company’s infrastructure. His goal was to bring them together on the same page by identifying their shared missions.

Planning is the foundation of this system. However, it has a twist. It infused the corporate strategy with the implementation of a plan. It was something that Benjamin Franklin knew when he said, “If you fail to plan, you are planning to fail.” Schneiderman also realized the importance of the needs of all the stakeholders. Fortunately, he left detailed documentation about its development.

Even though it’s over 33 years old, the principles still apply in today’s work environment. While Schneiderman focused on the balanced scorecard, as he called it, the theory has morphed to consider the employee scorecard, too. Together, they evaluate the entire organization. After all, it’s only as strong as the sum of its parts.

Defining the Balanced and Employee Scorecards

The balanced and employee scorecards are two pieces of the whole. The balance scorecard measures an organization’s performance based on pre-defined goals. You can think of it as the blueprint a business follows that embraces the principles of S(Specific) M (Measurable) A (Assignable) R (Realistic T (Time-related goals developed by George Doran.

The balance scorecard considers these targets at the corporate or organizational level. Using metrics provides a quantitative way of making unbiased assessments. Simply, it’s fair and objective. The balanced or balance scorecard was the product of Schneiderman’s Quality Improvement Process (QIP) Five Year Plan. It included strategies and planning for internal matters, finance, and the customer experience.

The internal perspective can cover areas such as inventory control, downtime, and efficiency. The financial segment looks at revenue and its sources. If your business is e-commerce, you can look at metrics like bounce rate, page views, and reviews. Changes in the follower numbers or thumbs-up can help you gauge the receptibility of new product or service launches.

Online businesses can benefit from what they can learn about the customer experience with metrics like shopping cart abandonment and average reply time to user concerns. The latter is vital to a business’s success because users expect it. Consumers want brands to use social media to connect. A balance scorecard with this focus can measure how well they’re doing it.

Harvard researchers Robert Kaplan and David Norton took the original concept one step further with the brilliant inclusion of an innovation and learning perspective. It seems like a no-brainer to make this investment. According to the American Society for Training and Development (ASTD), employers stand to up their profit margin by 24 percent if they do.

Employees value education and training nearly as much as other job perks, like vacation and profit-sharing. It’s something that employers should keep on the front burner, given the present state of job dissatisfaction and the so-called Great Resignation. The balance card that includes this category is well ahead of the game.

On the other hand, the employee scorecard focuses on the individual. The original company’s goals and strategies form the foundation of this measure. However, it considers the employee’s contribution as part of a team working toward these objectives. It gauges how well the individual has held up their part of the workload and, thus, performance metrics.

University of Minnesota’s Gophers football coach P.J. Fleck captures the concept of teamwork and common goals sagely in his “Row the Boat” philosophy. The oar encapsulates the energy you bring to your work and team. The boat is what you give to the cause. The compass defines the direction. The employee scorecard is the business version of this theory.

Benefits of Using Employee Scorecards

If scorecards sound like another gimmicky team-building exercise, consider these facts about today’s workplace. According to the 2021 Gallup State of the Workplace report, 40 percent of employees don’t know what’s expected of them on the job. An astonishing 70 percent strongly agree that their manager includes their feedback in setting career goals.

Is it any wonder that only one-third of employees are highly engaged in their jobs?

An employee performance scorecard provides clarity for task management and expectations with a well-defined roadmap to success. At the same time, it provides leaders with a view of the big picture and the roles that each department and individual contribute to the overall strategy. Moreover, it helps to remove the obstacles that undermine effective communication.

The Gallup report also identified the need for employee education and the necessary tools to perform their jobs adequately. Unfortunately, 70 percent of workers don’t feel they have what everything they need to succeed at their positions. The balance and employee scorecards address these matters with training and individualized career paths. It’s not just the staff who benefit.

Making these things available to their employees can help employers increase profitability by 11 percent. Involving workers in the goal-setting process can reduce attrition by 27 percent. The latter can further improve an organization’s bottom line when you consider that the average on-boarding cost of a new employee is nearly $4,000.

While the concept isn’t new, the employee scorecard highlights the issues that still exist in the workplace today. It puts a spotlight on education and training whereby the individual has a say in their growth. It sets clear expectations. Scorecards can also help organizations identify weak areas or aspects that need improvement. The numbers don’t lie; they only show.

The balance and employee scorecards motivate individuals by giving them skin in the game. It empowers them to take ownership of their career path and personal development. They also play a significant role in improving an organization’s culture of collaboration. Employee scorecard ideas start with the developing the company’s goals, taking into account team and individual contributions.

Creating Scorecards

The meaning of the balance scorecard is in the name. It is harmony between all departments within an organization. While management will handle the corporate strategies, it’s also essential to involve all employees in the process. It’s not unreasonable, given that some decisions will have a direct impact on a worker and their job.

The balance scorecard is the first step. An organization’s purpose or mission is the crux of this task. It sets the tone for everything that will follow. Using the Objectives and Key Results (OKR) methodology gives you a game plan. Incidentally, it also calls on S.M.A.R.T goal formation. The process involves determining the company’s pulse to define its direction and strategies.

The method then develops 12-month goals with a plan to break them down into smaller, more accessible milestones. You can think of the latter as rest stops to reassess your progress and adjust as necessary. Team and role assignments divvy out the work into manageable chunks. It’s essential to keep the measurable aspect of the process in mind. They will become the basis for the scorecards.

The vital thing is that the metrics represent reasonable, well-defined goals. It’s not enough to say you want to increase sales. Instead, it must be something measurable, such as following 10 sale leads this month or completing X amount of hours of safety training. For every metric, ask yourself whether you can say it was specific enough that it was met. These are the best employee scorecard examples.

You can use a free employee scorecard template as a starting point and customize it for the needs of your organization. You can also find free employee scorecard metrics to help you brainstorm the data your business will find most useful. The advantage of these options is that they may jog your memory about the things management needs to track.

The Process From Idea to Implementation

The procedure for creating a scorecard for employee performance in Excel begins with a goal. The OKR methodology provides the information and the meaning of a balance scorecard. You can use Schneiderman’s updated categories as your foundation, which you can then populate with the relevant metrics.

Think carefully about what is essential to track. You’ll likely find that some data are more pertinent to different departments or teams. Likewise, the employees may have varying starting points. A seasoned salesperson will undoubtedly have higher numbers than a new hire. Nevertheless, the primary goals are the same throughout the organization. Remember that it is a work in progress.

You can go old-school and keep physical notes. However, you’ll likely find that an employee scorecard template Excel works best if just because of the stats and visuals you can create from the data. We recommend keeping the main list of the individual objectives to no more than five. Undoubtedly, many are inter-linked, anyway, where measuring one can gauge the performance across the board.

Using a numerical scale works well with a spreadsheet program, such as Excel. It’s something we can all relate to easily, whether it was the grade you received on a test in school or a wine rating. However, you should make the scale meaningful with clear expectations for each subsequent level. Keeping it to a small range is ideal because it reduces ambiguity, like the difference between 85 and 86.

The next steps involve implementation. Depending on your organization and its metrics, you may find monthly, or even quarterly scorecards work best. Bear in mind that what’s important are the overall trends instead of the occasional blip on the radar. You may find it helpful to include employee scorecard comments to track external factors that can affect your business, such as weather or world events.

Evolving Over Time

It’s worth mentioning again that this system will evolve over time, especially if it’s your first time using an employee score card template. Certainly, your organization doesn’t exist in a bubble. Neither should the ways to measure its health and performance. We suggest that you incorporate a review of the balance and employee scorecards occasionally, inviting comments from all team members.

Remember that your people are your boots on the ground. They handle the day-to-day issues with the overall plan and the consumers’ response to it. The best way to use the information that the balance and employee scorecard have to offer is by listening to the individuals charged with meeting these expectations.

You should also use the information that they provide to reevaluate your corporate strategy. If the pandemic taught us anything, it was to prepare for the unexpected. Consider what actions worked and how well they performed. We suggest questioning whether each metric you track contributes to your ultimate goals and mission.

Final Thoughts

The best employee scorecard examples provide a summary of your organization’s health that is clear, relevant, and objective. Performance assessments are always stressful for workers. The strength of this methodology is that its sole aim is to offer information. It lays out a company’s strategy to keep everyone on point with clear expectations for everyone to work as a team. That alone makes them invaluable.

Employers and employees will appreciate having a straightforward plan for success. It gives everyone flexibility to tweak the metrics to match the demands of a changing economy and culture. As a wise man once said, knowledge is power. In this case, it’s empowerment for your company and your people.