Balanced scorecards (BSC) are tools for analysis and measurement of performance, not just of organizational structures and systems, but of people as well. After all, structures and systems do not function independent of people. In short, while it is the primary goal of balanced scorecards to install efficient mechanisms that facilitate as well as measure accomplishment, a good balanced scorecard will also detect when people or employees assigned to specific tasks are not up to their jobs. BSC people analysis can be designed to monitor as well as evaluate employees' performance.
A diligently structured BSC provides not just the objectives, intervening activities, and desired outputs. It also takes into account the people or employees who are supposed to accomplish the tasks and activities leading to accomplishments of plans. A good BSC assigns tasks to people based on displayed capacities. Assigning a particular job to an employee with unknown qualities or with mismatched skills is a prescription to failure. However one looks at it, BSC cannot effectively function as a viable measure if analysis of people performance is left out. This is because less than desirable outputs e.g., lagging sales or decreasing production cannot automatically be attributed to a faulty structure, a wrong plan, or policy. Problems can be attributed to these factors as much as to people not doing or who are unable to do their assigned tasks properly.
Top management of many companies has the tendency to focus too much on the larger picture and the financial aspects of operations. They end up neglecting people and structures that have weighty impacts on how well the companies perform towards accomplishing targets, which is unfortunate since with the proper use of BSC, plans can be more comprehensive by incorporating into them methods of addressing and evaluating root causes that lead to poor structure and people performance.
Balanced scorecards break down strategic or general plans into smaller units in the form of specific tasks and activities that are then assigned to individual employees. These activities are the basis for analyzing employee performance. Simply put, the balanced scorecards try to establish routines to ensure that all activities of employees are focused and directed at attaining strategic plans. This makes analysis of employee performance easier, as activities are accompanied by clear, quantifiable, and expected outputs.
Prior to the emergence of Balanced Scorecards as an important management tool for measuring performance, employee performance analysis is primarily based on prepared job descriptions. Balanced scorecards fill the gaps evident when companies rely solely on job descriptions, which are often vague and not quantifiable. And because they do not provide specifications of outputs, such as quality and timeframes, performance analysis is not grounded on specific contributions of employees to the advancement of the company.
BSC people analysis is much more effective in measuring employee's performance since it contains tools - job matching, delegating, and the like - that help translate general goals and plans into day-to-day routines. This is an enormous task, especially for large organizations. But this can be made easier by practicing an expanded planning scheme where more employees are involved. Some companies adopt more participatory schemes where planning is done from bottom up. Meaning, each section or department is responsible for formulating implementation plans based on strategic plans. Top management reviews the plans, ensuring that they are properly zeroed in and making revisions when required. This system eliminates the need for time-consuming orientations since more people have a hand on the drafting of the plan, including its specific activities. This helps in developing the routines from which analysis of employees performance is to be based later on.
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