Incentive compensation for employees, such as bonuses, should be tied to balanced scorecard performance measures only if managers are confident that the performance measures are easily manipulated by those being evaluated.

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Incentive compensation for employees, such as bonuses, should be tied to balanced scorecard performance measures regardless of whether or not managers are confident that the measures are easily manipulated. The measures themselves should be designed to accurately reflect performance and aligned with organizational goals, and steps should be taken to minimize the potential for manipulation or gaming of the system.

Incentive Compensation for Employees, Such as Bonuses, Should Be Tied