KPIs and Job Scorecards: Explanation and usage

Job Scorecards gained popularity when introduced by Brad Smart as part of his “Top Grading” hiring process and by his son Goeff Smart in the Book “Who” .  They advocated Job Scorecards as a tool to effectively inform new job applicants about their expected main responsibilities and how their performance would be measured through clear Key Performance Indicators (KPIs).  Since then, many companies have also adopted them as part of the contract between employee and company, often replacing job descriptions.

Job Scorecards objectives

 

a.) Scorecards have also become an accountability tool:
  • They define the expected key activities, desired responsibilities and outcome goals (KPIs) that the person in a given function is accountable for.  For each function of the leadership positions, at least one of these outcome KPIs should be linked to a line in the Profit and Loss (P&L) statement .
  • Even if several goals / objectives are identified for a given function, focus should initially be kept to a few KPIs (2 to 3 maximum). If found necessary, their number can later-on be increased.
  • Any desired KPI that a person is to be accountable for, is to be reported regularly as a “lagging indicator” (outcome) which is the result from a set of activities that impact that outcome.  To ensure such impacting activities occur, there must be a way to measure and track 1 or 2 them by using other KPIs, the ”leading indicators” that can be logged and reported through the company’s Enterprise Resource Planning (ERP) system.
  • This also requires building up some corresponding data bases to confirm and/or establish a statistically significant correlation between the leading indicators and the corresponding desired outcomes, the lagging indicators.

 

b.) A Job Scorecard only lists the main responsibilities and activities.
  • It does not list the details of each activity; these are either described in a separate document or in a ‘procedures’ manual as necessary.

 

c.) When a job Scorecard is used in the hiring process of a new employee, it clarifies what are the expectations of the job / function that candidates are applying for.  They become an integral part of the candidates interview process. This avoids misunderstandings right from the start.