Which of the following statements are true?

Question

Multiple select question.

Using balanced scorecard performance measures to reward employees can result in sub-optimal results.

It is important that balanced scorecard measures are not easily manipulated.

In order for employees to understand the importance of the balanced scorecard, incentive compensation should immediately be tied to it.

Answer 1

Let's evaluate each statement:

1. Using balanced scorecard performance measures to reward employees can result in sub-optimal results.
   True: This statement can be true if the performance measures are not well aligned with the overall strategic goals of the organization, or if employees focus too much on specific metrics at the expense of broader performance. If rewards are tied too strictly to certain metrics, it may encourage behavior that is not in the best interest of the organization as a whole.

2. It is important that balanced scorecard measures are not easily manipulated.
   True: This statement is true. For the balanced scorecard to be effective, the measures used must be reliable and difficult to manipulate. If employees can easily game the system to meet targets, the accuracy and integrity of performance evaluation can be compromised.

3. In order for employees to understand the importance of the balanced scorecard, incentive compensation should immediately be tied to it.
   False: While tying compensation to the balanced scorecard might incentivize employees, it may not be the best approach to ensure they understand its importance. Employees may need time to learn about the balanced scorecard and its metrics before compensation is tied to it. Immediate changes could lead to misunderstanding or misalignment with strategic goals.

Summary:

• Statement 1: True
• Statement 2: True
• Statement 3: False