performance scorecard
Definition
A performance scorecard is a written document inside a contract that spells out exactly how you will measure whether a vendor, employee, or contractor is doing their job well. It sets specific targets, like delivery times or error rates, so both sides agree upfront on what success looks like. If the other party consistently falls short of those targets, the scorecard gives you documented proof to back up any complaints, penalties, or contract termination.
Example
You hire a fulfillment company to ship your products and the contract includes a performance scorecard requiring them to ship 98% of orders within two business days. When their on-time rate drops to 85% for three months straight, your scorecard gives you clear grounds to demand a discount or walk away from the contract.
Watch Out
Make sure every metric on the scorecard is something you can actually measure with real data, because vague targets like 'good customer service' are nearly impossible to enforce in a dispute.
See which terms appear in your contract?
This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.