Module 13 - Non-financial Performance Indicators

Question 1

The balanced scorecard

Answer 1

A performance measurement system which uses a series of performance measures that are directly linked to company strategy

Question 2

Third generation balanced scorecard

Answer 2

1. destination or vision statement
2. strategic linkage model
3. definitions for each strategic objective
4. definitions for how each objective will be measured

Question 3

KPIS

Answer 3

measures which reflect the success or progress of an organisation in relation to a specific goal

Question 4

Net promoter score

Answer 4

Looks at whether or not customers would recommend the brand to others, score ranges from -100 to 100 and a score above 0 is good.

NPS = (no of promoters - no of detractors / total no of responses) x 100

Question 5

Advocacy index

Answer 5

based on NPS created based on telephone based surveys - 3 point scale

Question 6

Benchmarking

Answer 6

business improvement technique that involves comparing company performance to that of other companies

Question 7

Strategic benchmarking

Answer 7

Performance measures which relate to the specific industry in which a company operates

Question 8

Functional benchmarking

Answer 8

Performance measures of support functions which can be compared between different industries

Question 9

Customer churn rate

Answer 9

Used by businesses whose customers pay on a recurring basis and assesses how likely customers are to repeat their payment

Question 10

Dashboards

Answer 10

Online tool used to virtually track and analyse KPIs in real time

Question 11

Disadvantages of non-financial performance indicators

Answer 11

Can be very backwards, so do not use in isolation as they are based upon past sales and past results.

Many ways to interpret so can demonstrate perceived success even when there is none