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| 1 | |
The purposes of performance measurement are to: - communicate the strategy and plans of the business and align employee goals with those of the organisation
- track managers’ progress towards achieving targets
- identify problem areas
- guide senior managers in developing future strategies and operations
- evaluate subordinates’ performance and use as a basis for rewards
Which of the above statements are true? |
| | A) | i, ii and iii. |
| | B) | ii, iii and iv. |
| | C) | ii, iv and v. |
| | D) | i, ii, iii, iv and v. |
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| 2 | |
Hair Scene operates a chain of beauty salons. Each salon manager has four measures in their balanced scorecard. If the managers meet all four targets they get a $10 000 bonus. They receive $7500 for meeting three targets, $5000 for meeting two targets and $2500 for meeting one target. The following table defines the four targets: Hair Scene Balanced Scorecard | Objectives | Performance measure | Target | Financial perspective |
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| Increase shareholder wealth | Return on assets | 20% | Customer perspective |
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| Provide customer satisfaction | Percentage satisfied (measured by survey) | 95% | Internal business process perspective |
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| Provide on-time delivery | Percentage of customers not waiting for appointment | 90% | Learning and growth perspective |
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| Reduce employee turnover | Annual staff turnover | 20% |
Lucy Smith manages Hair Scene’s Greensborough salon and has achieved the following operating statistics for the past year: Net income | $139 500 | Total assets | $634 000 | Number of customer surveys | 672 | Number of customers ‘satisfied’ (according to survey) | 646 | Number of customers | 915 | Number of customers served on time | 833 | Employee turnover | 5 | Number of employees | 15 |
Which of the following performance measure targets did Lucy Smith, Manager of the Greensborough salon, meet or better? - Return on assets.
- Percentage of customers satisfied.
- Percentage of customers not waiting for an appointment.
- Annual employee turnover.
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| | A) | i, ii and iii. |
| | B) | ii, iii and iv. |
| | C) | i, ii and iii. |
| | D) | i, ii, iii and iv. |
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| 3 | |
Hair Scene operates a chain of beauty salons. Each salon manager has four measures in their balanced scorecard. If the managers meet all four targets they get a $10 000 bonus. They receive $7500 for meeting three targets, $5000 for meeting two targets and $2500 for meeting one target. The following table defines the four targets: Hair Scene Balanced Scorecard | Objectives | Performance measure | Target | Financial perspective |
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| Increase shareholder wealth | Return on assets | 20% | Customer perspective |
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| Provide customer satisfaction | Percentage satisfied (measured by survey) | 95% | Internal business process perspective |
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| Provide on-time delivery | Percentage of customers not waiting for appointment | 90% | Learning and growth perspective |
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| Reduce employee turnover | Annual staff turnover | 20% |
Lucy Smith manages Hair Scene’s Greensborough salon and has achieved the following operating statistics for the past year: Net income | $139 500 | Total assets | $634 000 | Number of customer surveys | 672 | Number of customers ‘satisfied’ (according to survey) | 646 | Number of customers | 915 | Number of customers served on time | 833 | Employee turnover | 5 | Number of employees | 15 |
How much bonus will Lucy Smith, Manager of the Greensborough salon, receive? |
| | A) | $0. |
| | B) | $2500. |
| | C) | $5000. |
| | D) | $7500. |
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| 4 | |
Which of the following is not a problem with conventional financial performance measures? |
| | A) | Conventional financial performance measures are not actionable. |
| | B) | Financial performance measures emphasise the overall strategy of the business. |
| | C) | Financial performance measures provide limited guidance for future actions. |
| | D) | Financial performance measures emphasise only one aspect of performance. |
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| 5 | |
Which of the following is not a feature of contemporary performance measurement systems? |
| | A) | Non-financial and financial measures. |
| | B) | A strategic orientation. |
| | C) | Continuous improvement. |
| | D) | An emphasis on short-term profit. |
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| 6 | |
Which of the following is not a lag indicator for customer perspective? |
| | A) | Customer satisfaction. |
| | B) | Number of customer complaints. |
| | C) | Market share. |
| | D) | Number of new customers. |
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| 7 | |
The four perspectives of the Kaplan and Norton balanced scorecard are: |
| | A) | financial, internal business processes, employee and technology |
| | B) | financial, customer, internal business processes and technology |
| | C) | financial, customer, learning and growth and quality |
| | D) | financial, customer, internal business processes and learning and growth |
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| 8 | |
Lag indicators: |
| | A) | measure the factors that drive the outcomes |
| | B) | indicate how far your organisation is lagging behind the market leader |
| | C) | indicate how far behind you are in filling your customers’ orders |
| | D) | measure the progress towards the organisation’s objectives |
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| 9 | |
Reducing production cycle time is an example of a lead indicator for which perspective of the balanced scorecard? |
| | A) | Financial. |
| | B) | Customer. |
| | C) | Internal business processes. |
| | D) | Learning and growth. |
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| 10 | |
Which of the following would be considered a non-financial performance measure? |
| | A) | Return on investment. |
| | B) | Number of defects. |
| | C) | Profit per unit. |
| | D) | Variances from standards. |
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