1. What are the strengths and weaknesses of a balanced scorecard approach to performance appraisal?
2. Do you think it’s fair to base the bonus paid to BMO’s CEO on the four indexes comprising the firm’s balanced scorecard?
3. Do you believe that a balanced scorecard approach would be more effective for the administrative or for the developmental purposes of appraisal discussed in this chapter?

In 1990, the Bank of Montreal (BMO) had one major goal: to focus the entire workforce on success. It’s a simple idea, but not so easy in execution. How would the company get entry-level tellers to think of their work not just as a means to a paycheck, but as a direct contribution to BMO shareholders? How would it remind corporate executives that their jobs were not just to boost the bottom line, but to charm entire communities?
The answer was BMO executives’ balanced scorecard approach. To be competitive, executives decided, the bank had to meet the needs of four stakeholders: BMO shareholders, customers, employees, and communities. Executives translated that idea into four goals: Shareholders needed a return on equity; customers needed good service, employees needed to feel loyal and satisfied, and communities needed to feel that the bank made a difference in their neighborhoods. Return on investment would determine satisfaction for shareholders; surveys and feedback would determine satisfaction for customers, employees, and communities.