6 Questions
What is considered a 'lagged' measure of performance?
Return on capital employed
Which of the following is a characteristic of Balanced Scorecards?
Can be used in not-for-profit organisations
What should organizations consider when designing performance measurement systems to mitigate challenges?
Incorporating a balanced set of measures
Which sequence is recommended for reviewing a balanced scorecard according to the provided information?
Financial, customer, internal business process, learning and growth
What is NOT a key perspective of Balanced Scorecards?
Employee satisfaction
Which statement reflects the importance of measuring performance in organizations?
Effects of measuring performance can vary and may have unforeseen consequences
Study Notes
Performance Measurement
- A "lagged" measure of performance is the number of complaints received from customers, as it measures the outcome of past actions.
Balanced Scorecards
- Balanced Scorecards can be used in not-for-profit organizations, demonstrating their versatility.
- These scorecards are not limited to a fixed annual update, but can be updated more frequently.
- Balanced Scorecards always have four perspectives: financial, customer, internal business process, and learning and growth.
- They are a feedback mechanism, providing insights to improve performance.
Designing Performance Measurement Systems
- The order of reviewing a balanced scorecard does not matter, contradicting the maxim 'the order of the scorecard matters'.
- The effects of measuring performance in organizations can be uncertain and vary; thus, it's essential to design systems carefully, considering specific context, objectives, and potential unintended consequences.
- A balanced set of measures should be incorporated to mitigate the challenges.
Test your knowledge on performance measurement with this quiz. Questions include identifying lagged measures of performance and understanding statements about Balanced Scorecards.
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