BSC and personnel motivation issues

The concept of balanced scorecard implies full involvement of personnel in development of strategy and everyday maintenance of this revolutionary strategic management tool.  It’s not an easy task to motivate personnel especially when dealing with long-term goals.  How can top management explain ordinary employees the benefits of BSC?  Even if personnel is aware of BCS advantages why should employees spend their personal working time for balanced scorecard?  These questions are sometimes very difficult to answer.  By the way, lack of motivation and rejection of balanced scorecard by ordinary employees is one of the major reasons why this system fails.

Sometimes, business owners and top managers think of balanced scorecard as of some magic tool.  That’s why they don’t consider it necessary to get personnel involved in strategy development.  Moreover, company management imposes a strategy from top to the bottom.  It often happens that top management of the company or business owners do not know everything they should know about company customers, current problems inside the company etc.  But ordinary employees, front line managers and sales people meet with customers every day.  They spend the entire working day in office and thus they know what can be improved to have higher performance.  That’s why many creative ideas and suggestions come from the lowest level of the company.

If personnel either doesn’t understand strategic goals or rejects them all attempts to implement balanced scorecard in the company will fail.  Moreover, very often employees consider balanced scorecard to be just another tool to control their work.  This causes resistance.

Balanced scorecard should become philosophy for the company.  Once the company manages to make a successful use of balanced scorecard there is no way back.  It is possible to say that balanced scorecard is implemented once and forever.

Many companies think they are using balanced scorecard in a proper way.  On the one hand it would be wrong to say about wrong ways of BSC use.  But it is not very reasonable to use balanced scorecard as Accounting System or a system of managerial control.  It was designed to be something bigger for the company.

When motivating personnel, it is important to introduce a clear motivation system.  If you think that financial motivation is the only available option you are mistaken.  There are many nonmaterial rewards that will encourage high performance of individual employees.

Keep in mind that rewards must be paid both for achieved results and for something that was done to achieve such results and future.  At the same time one should keep balance of rewarding for lagging and leading indicators.  For example, if sales manager receives reward for number of made calls he may forget about the sales themselves.  At the same time making the maximum number of calls to customers is very important as it usually results in sales growth.

The wrong use of balanced scorecard and implementation of in comprehensive reward system will make any companies suffer enormous losses.  Balanced scorecard received a huge portion of criticism and many of the critics are top managers and business owners who made serious mistakes in BSC implementation.