Balanced Scorecard - The Business Solution

Sinead does a wonderful job of highlighting some of the problems with the way that people frame the merit pay debate. I want to second her concern.

The problem is perfectionism. Policymakers want to design the perfect policy. They want to create the perfect merit pay system. If the system being proposed is not perfect, then policymakers revert to doing nothing.

Two major criticisms of merit pay are that schools don't want to create an internally competitive environment and there is no way to measure everything about being a good teacher. Businesses deal with these issues all the time.

If a business does not want to create an internally competitive culture, then they design the compensation and incentive systems around this strategy. Businesses also have a very difficult time finding the correct way to measure somebody's effectiveness. The best employee is one who

Improves the productivity of their colleagues

Makes the customers happy

Works well with their boss AND their subordinates

Delivers results

Develops good relationships with suppliers

Among many more measures...

But this does not mean that businesses should abandon the idea altogether.

The idea of merit pay is very simple. In theory, if someone performs their job well, then they should be rewarded more. Once the ed policy world buys into that theory, then the entire debate should revolve around the design of the merit and incentive system.

The human resources literature has many different ways of approaching this issue. For starters, 360-degree feedback is gaining popularity in many businesses. In education, the teachers could be rated by their principals, fellow teachers, students, support staff, parents, etc. Then, committees including selected teachers, principals, support staff, etc. can spend a day and assign bonuses.

But measuring someone's success should not be a once a year occurrence. The best businesses are always giving their employees constant constructive feedback, and positive reinforcement. Schools or businesses can never be perfect, but they should always be working towards improving themselves. In operations, this is known as Kaizen (continuous improvement).

One of the solutions that a group in my Education Consulting class made to improve a principal's management was to introduce a balanced scorecard. In the presentation to 10 principals on the topic, everyone was excited and wanted a copy of the report.

UPDATE: Bobby sent me this link about Balanced Scorecards.