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Basic Score Card

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Questions to accompany final case study, 'Creating Incentives for Change by Keeping Score'

Evaluate the proposed BSC as follows:

a. From the Discussion section or the BSC literature, what are good criteria to evaluate the BSC measures? How well does the draft scorecard meet the criteria that were stated?

b. Evaluate the draft scorecard in Table 1. How well does it meet the criteria that were stated? List the major shortcomings.

c. What information is needed for these measures?

d. For each measure, determine the level of analysis (i.e., individual, business team, or company

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Creating Incentives for Change by Keeping Score
Elite Engineering Scorecard Development

In a company based quest for growth and sustainability, Elite Engineering (EE) has set goals toward a five-year plan to achieve and ensure such. Unfortunately, no one has yet created a reward system designed toward the achievements of the team as opposed to the unchanged yearend bonus based primarily upon the individual. With a proposed scorecard, COO Stuart Weismann has selected three team leaders to assist in making the scorecard more applicable to the corporate goal of teamwork. The following is an analysis of that scorecard.

Good Criteria

A. Some of the measurement tools which can be used to evaluate the BSC measures for Elite Engineering (EE) include: financial reports (both monthly and the final annual report); individual records, like Joe's team members' bill bible hours, kept within the business team; rating surveys on completed projects, conducted and measured by the company; records of new clients per each business team, recorded by the team leaders, like Joe.

Criteria Met?

Since this scorecard is designed to promote the business team, more of the scorecard's measurement pertaining to the team efforts, as opposed to the individual's efforts, should be considered. This can be affected by weighting or through eliminating some of the individual's measurements, as the scorecard has already done. While billable hours are still counted toward the company's yearend bonus, other individual accomplishments can be eliminated or rated as less worthy of consideration, with higher consideration going to team efforts and accomplishments. Bob Martin has already identified this problem in his statement, ...

Solution Summary

An analysis of a BSC for a company wishing to move toward a team based operation rather than an individual reward system as is now in place.

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Basic Balanced Scorecard Evaluation

ZZ Tire Company started as retail installer of tires on cars 10 years ago. They now have 400 retail stores, installing about 10,000 tires per store per year and selling a total of 4 million tires. 5 years ago, they decided to start manufacturing their own tires to sell in their retail locations.

They now have 4 manufacturing plants, making 2 million tires a year. They made a profit of $170 million dollars. On average, they make $50 a tire on the tires they manufacture and $35 on the tires from other manufacturers. Their current growth rate is 12% a year, and they are only located in the 10 southeastern states. Their current customer satisfaction rating is 85%. They are also starting to do research on making a tire that increases gas mileage in cars. Currently, they are using the same type of machines in the factory since the beginning and still use the same type of machines in their installation locations.

Do a basic balanced scorecard evaluation where you go through the four areas (learning and growth, internal business process, customer, and financial perspectives) and provide management some ideas for improvement. You are allowed to estimate and make assumptions about the company.

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