Chp 9: Performance management systems

Question 1

What are the 4 CP’s of performance measurment?

Answer 1

1. Check Position - how well is the business doing?
2. Communicate Position - to stakeholders
3. Confirm Priorities - set targets for the business
4. Compel Progress - drive change with possible links to reward

Question 2

What are the four iterative stages to managing problems involved with implementing a balanced scorecard?

Answer 2

1. Translating the vision - express the strategy so that it has clear meaning to all employees
2. Communicating and linking - next, link the strategy to departmental day-to-day goals
3. Business planning - integrate business plans with financial plans
4. Feedback and learning - classic feedback loop

Question 3

What are the five levels of the performance pyramid?

Answer 3

1. The vision
2. Business units - market and financial objectives
3. Business operating systems - customer satisfaction and flexibility meet market objectives; flexibility and productivity meet financial objectives
4. Departments - quality and delivery go into market side; process time and waste go into financial side
5. Operations

Question 4

What are three features/benefits of the performance pyramid?

Answer 4

1. Highlights linkages between measures and objectives - goal congruence
2. Ensures internal and external factors both considered
3. Focuses on value creation

Question 5

What seven elements should an integrated report answer?

Answer 5

1. Organisational overview - what it does and the circumstances it operates in
2. Governance
3. Opportunities and risks
4. Strategy and resource allocation
5. Business model
6. Performance
7. Future outlook

Question 6

What are the three key building blocks to Fitzgerald and Moon’s reward building block model?

Answer 6

1. Dimensions - results and determinants
2. Standards - actual measures used
3. Rewards

Question 7

What are the six elements of the dimensions in the building blocks model?

Answer 7

Results
1. Financial performance
2. Competitive performance

Determinants
3. Quality
4. Flexibility
5. Resource utilisation
6. Innovation

Question 8

What are the three elements of the standards in the building blocks model?

Answer 8

1. Ownership - employees must participate
2. Achievement - challenging but achievable
3. Equity (fairness) - fairness throughout organisation

Question 9

What are the three elements of the rewards in the building blocks model?

Answer 9

1. Clarity - clearly understood
2. Motivation - individuals motivated to achieve goals
3. Controllability - only assessed on controllable performance

Question 10

What three issues should be considered when setting stretch targets?

Answer 10

1. Resources required
2. Targets linked to rewards
3. Unethical behaviour - which may arise if targets are considered unachievable through ethical means