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Scorecards out the Wazoo: Designing Scorecards Linked to Pay for Administrative Units in an Accounting Firm |
Monday, May 30, 2005 |
1:30 PM–2:50 PM |
Marquette (3rd floor) |
Area: OBM; Domain: Service Delivery |
Chair: Cloyd Hyten (University of North Texas) |
CE Instructor: Cloyd Hyten, Ph.D. |
Abstract: Multidimensional scorecards were designed for administrative (non-revenue generating) personnel in an accounting firm that already had a performance system using scorecards tied to performance pay for its revenue-generating personnel. This symposium will review the mechanics and theory of scorecards using categories based on the Kaplan & Norton model. How these scorecards are indexed to profitability metrics to yield bonus pay in a model similar to Abernathy’s Profit-Indexed Performance Pay will be explained. We will also compare this system to a similar existing system for production personnel. Challenges and solutions involved for adapting this system to fit the performance aims of administrative departments will be discussed. Several administrative departments’ (e.g., Human Resources, Information Technology, Practice Management, Secretarial Support) scorecards will be discussed to illustrate the final system and the metrics chosen will be explained. In addition, issues involved in the design of metrics and compensation for the senior management of operations will be discussed. |
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Performance Scorecards and Performance Pay: Theory and the Mechanics of Design |
CLOYD HYTEN (University of North Texas), Bellann D. Morales (Travis Wolff, L.L.P.) |
Abstract: This paper will review the design of scorecards that are tied to performance pay plans. The theory of using scorecards tied to pay as the foundation of the performance system will be explained. How measurement categories are chosen as well as how to cap and balance the scorecard will be discussed. The Kaplan & Norton model will be explained. The rationale and mechanics of tying scores to measures of profit as in Abernathy’s PIPP system will also be explained. We will also discuss firmwide operational and financial metrics and how they are linked to the firm’s strategy. |
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How Do You Measure Performance Without Product? Special Challenges of Administrative Scorecards |
BRYAN SHELTON (University of North Texas), Sarah C. McDaniel (University of North Texas), Joseph L. Cermak (University of North Texas), David Mallari (University of North Texas), Cloyd Hyten (University of North Texas) |
Abstract: Issues in the design of performance systems for administrative units will be discussed. Specifically, comparisons will be made to such systems used for the revenue-generating production side of the firm, where production and financial measures are more obvious. Contrasts with the administrative units, where the important results are not tied as directly to external revenue, will be made. We will discuss how we addressed these problems in adapting the existing system to the administrative units from a strategic standpoint. Tactical decisions regarding how to obtain necessary data and compromises we made will also be discussed. We will also discuss considerations in designing systems for the top management of the entire administrative unit. |
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Scorecards for IT and the Secretarial Support Team |
DAVID MALLARI (University of North Texas), Joseph L. Cermak (University of North Texas), Bryan Shelton (University of North Texas), Sarah C. McDaniel (University of North Texas), Cloyd Hyten (University of North Texas) |
Abstract: The design of the scorecards for the Information Technology and Support team units will be described in detail, along with how they are linked to performance pay and other evaluation components. |
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Scorecards for HR and Practice Management |
SARAH C. MCDANIEL (University of North Texas), Bryan Shelton (University of North Texas), Joseph L. Cermak (University of North Texas), David Mallari (University of North Texas), Cloyd Hyten (University of North Texas) |
Abstract: The design of the scorecards for the Human Resources function and the Practice Management function will be described in detail, along with how they are linked to performance pay and other evaluation components. |
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