Chapter 14, Problem 11E

Two departments within Cougar Gear Inc. are Production and Sales. Each department has a unique scorecard, as follows:

The Production Department scorecard focuses on the learning and growth and internal processes perspectives. The Sales Department scorecard focuses on the learning and growth and customer perspectives. Both scorecards have the learning and growth performance metrics of median training hours per employee and average employee tenure. The Production scorecard has the unique metrics of production time per unit and number of production shutdowns. The Sales scorecard has the unique metrics of percentage of customers who shop again and online customer satisfaction rating. The performance targets for each metric are shown in the tan boxes just under the performance metrics. The actual achieved metrics are shown in the red boxes just below the tan boxes. When evaluating both departments, Cougar Gear’s management looks at the median training hours per employee and average employee tenure metrics and subsequently decides to give the Sales Department a large bonus while giving the Production Department a minimal bonus.

1. a. Determine and define the type of cognitive bias Cougar Gear’s management has exhibited in this instance.
2. b. Determine which department would have received the larger bonus had the company’s management not been biased in the evaluation.
3. c. Discuss one advantage and one disadvantage of using unique balanced scorecards for different departments or divisions of a company.