Learning Objective 24-2
1) Performance evaluation systems provide top management with a framework for maintaining control over the entire organization.
2) Communicating the expectations of top management to segment managers improves goal congruence.
3) The practice of comparing a company's achievements against the best practices in the industry is known as goal congruence.
4) A lag indicator is a performance measure that forecasts future performance.
5) The balanced scorecard is a performance evaluation system that requires management to consider financial measures of performance, but not nonfinancial measures.
6) Key performance indicators (KPIs) are summary performance measures that help managers assess whether the company is achieving its goals.
7) A good balanced scorecard focuses only on lead indicators, because lag indicators are not important for the scorecard.
8) A company that uses a balanced scorecard has established a KPI for product quality. If the actual warranty claims are higher than expected it indicates that the quality standards have been met.
9) The performance measurement system should provide incentives to segment managers for coordinating the activities of the subunits and focusing them toward the overall company objectives. Which of the following performance measurement goals has been described by this statement?
A) motivating segment managers
B) promoting goal congruence
C) providing feedback
10) The level of employee satisfaction is a key performance indicator of the ________.
A) financial perspective of a balanced scorecard
B) learning and growth perspective of a balanced scorecard
C) internal business perspective of a balanced scorecard
D) customer perspective of a balanced scorecard