Performance measurement and management questions with answers.

Performance measurement and
management questions with answers.

Performance measurement ANS -process of quantifying the efficiency and effectiveness of action



performance measure ANS -metric used to quantify the efficiency and/or effectiveness of an action



PMS ANS -set of metrics used to quantify both the efficiency and effectiveness of actions



Levels of PMS ANS -- individual performance measures

- set of performance measures

- relationship between the PMS and the environment within which it operates



Components of contemporary performance measures ANS -financial and non-financial performance
measures, implicitly or explicitly linked to strategy



purpose of contemporary PM ANS -- informed decision making

- evaluate organizational and/or managerial

performance



Contemporary PMS ANS -- advocate the use of an array of financial and nonfinancial performance
measures

- translates business strategies into deliverable results

- provides the information that allows the firm to identify the strategies offering the highest potential for
achieving the firm's objectives

- evaluate performance for either informational or motivational purposes



Consequences of contemporary PMS ANS -- way these systems are designed, developed and used bring
about performance

,- internal and external factors mediate and/or

moderate relationship with performance



Control problems and 'levers' of control ANS -- Core values -> Beliefs systems

- Risk to be avoided -> Boundary systems

- Critical performance variables -> Diagnostic control

- Strategic uncertainties -> Interactive control



Belief systems ANS -Guiding the creative process of exploring new opportunities; instil widely shared
beliefs



Boundary systems ANS -Negative, limiting role of circumscribing the domain where the company seeks
new opportunities



Diagnostic control systems ANS -Monitor, assess and reward achievement on key areas of performance



Interactive control systems ANS -Encourage organizational learning and the process of development of
new ideas and strategies



Accountability requires... ANS -- Few measures

- Results, outcome

- Used for summative assessment

- Valid and reliable



Learning requires... ANS -- Many measures

- Different types (linkages?)

- Used for formative assessment

- To be able to raise questions, combine data with other information



Coercive ("mechanistic") control ANS -- Control is constraining and restrictive

, - Employees are to comply

- Not to think, understand, or question

- Clarify expectations, increase efficiency, curb opportunism



Enabling ("organic") control ANS -- Control is empowering

- Employees are to be informed and involved

- To think, understand, and question

- Increase autonomy, empowerment,engagement



Design principles of enabling control ANS -Repair

- capabilities to fix breakdown of processes by the users

• Internal transparency,

- understanding of the working of local processes

• Global transparency

- understanding of where and how these local

processes fit into the organization as a whole

• Flexibility



Effectiveness ANS -extent to which customer requirements are met



Efficiency ANS -how economically the firm's resources are utilized when providing a given level of
customer satisfaction



prevention costs ANS -costs expended in an effort to avoid discrepancies



appraisal costs ANS -costs due to evaluation of quality and detection of discrepancies



failure costs ANS -result of discrepancies ( internal and external)