It is impossible to objectively distinguish individual contribution to overall company or business unit value creation. This contribution can only be determined subjectively, and is best determined by those who most closely observe the individual's performance.

Individual performance is best measured against personal goals believed to support either current profitability or strategic value. Goals should account for traditional Balanced Scorecard perspectives of "Customer," "Business Process," and "Learning and Growth." "Financial," the fourth traditional Balanced Scorecard perspective, is accounted for in the Profit Performance and Strategic Value components of the value-based management system. Specific goals are determined during the planning process.

While research shows that overall bonus pools should be funded using simple, objective financial measures, the distribution of bonuses can be legitimately influenced by Scorecard results. But we must be cognizant that to the extent we use any Scorecard results in compensation, Scorecard goals are likely to be negotiated toward minimal effort or risk on the part of the manager being scored.