To develop a strategy map, managers select a few strategic objectives within each of the perspectives, and then define the cause-effect chain among these objectives by drawing links between them. A balanced scorecard of strategic performance measures is then derived directly from the strategic objectives. This type of approach provides greater contextual justification for the measures chosen, and is generally easier for managers to work through.

The grouping of performance measures in general categories (perspectives) is seen to aid in the gathering and selection of the appropriate performance measures for the enterprise. Four general perspectives have been proposed by the Balanced Scorecard:

• Financial perspective
• Customer perspective
• Internal process perspective
• Innovation and learning perspective

Once a strategy map and strategic objectives are identified, strategic performance metrics or Key Performance Indicators can be used to track performance. The specific measures should be derived from an organization's strategy; they are not "one size fits all".

KPIs merely indicate what needs to be measured.  Objectives are KPI targets set in line with the business plan.  In developing the objectives for subordinates a manager should follow a general approach as outlined below:-

• Review all the accountabilities and determine which have shown deficiencies or which should receive attention in the coming period
• A given accountability might call for establishing an objective in one department in the coming period while the same accountability in a second department does not require the same emphasis
• Review the measurements that will best describe achievements in the selected accountabilities
• Establish the necessary objectives as they relate to the selected accountabilities making sure that they are time bounded.  Each job description may give rise to more than one objective
• Establish the objectives at a level that a competent performer would be able to achieve

On this last point it must be emphasized that in the contracting phase the manager must set objectives at the corporate plan. This one way of ensuring inter-department standards are based on business needs.

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