Deck 11: Performance Evaluation Revisited: a Balanced Approach

Question 1

A performance dashboard is a visual display of the key measures related to an organization's operational goals and strategies.

Answer 1

True

Question 2

Nonfinancial measures,which are not based on accounting results,can be either qualitative or quantitative.

Answer 2

True

Question 3

Identifying whether a measure is a leading or lagging indicator can be difficult,because a lagging indicator of one event can be a leading indicator of another.

Answer 3

True

Question 4

Measures that can be determined only after something is finished are called lagging indicators.

Question 5

Measures that are predictors of your ultimate performance on a particular activity are referred to as predictor indicators.

Question 6

A performance dashboard is a management tool that integrates performance measures performance across four different perspectives dashboard to guide operations toward achieving an organization's strategy.

Question 7

The balanced scorecard includes one or two measures in each of six perspectives.

Question 8

The learning and growth perspective Answers the question,"Are we improving our business processes in order to deliver maximum value to our customers."

Question 9

When choosing the right performance measures,the best measures relate to day-to-day operations.

Question 10

Even if an organization relies solely on one performance measurement,it cannot easily be misled into thinking all is well,when in reality,all is not well.

Question 11

Lagging indicators can be used to predict future results.

Question 12

The key to using key performance indicators to drive performance is to understand the cause-and-effect relationships they represent.

Question 13

Earnings per share,although taken from accounting reports,is a qualitative measure.

Question 14

The balanced scorecard assists in communicating the corporate strategy throughout the organization.

Question 15

Although executives recognize the importance of nonfinancial performance measures,companies are not particularly good at using them.

Question 16

To be of any value,a measure of performance must be measurable,meaning that it is complete and accurate,and is based on actual results rather than on estimates.

Question 17

As a measure of a salesperson's performance,"corporate profit margin" is an example of an actionable measure.

Question 18

A lagging indicator "lags" the time period when a performance is measured.

Question 19

When a company creates a balanced scorecard,managers are stating a hypothesis about the results that will occur if certain performance measures are stressed.

Question 20

Return on investment,residual income,and EVA all have qualitative components.

Question 21

Which of the following is $\textbf{ not }$ an example of a lagging indicator?

A)Earnings per share
B)Grade point average
C)Number of customer complaints
D)All of these ans choices are lagging indicators

Question 22

Which of the following is $\textbf{ not }$ an example of an employee-oriented nonfinancial measure?

A)Absenteeism
B)Labor productivity
C)Accidents per month
D)Employee empowerment

Question 23

Benchmarking is appropriate only within a company's industry.

Question 24

The goal of benchmarking is to identify those best practices that improve both quality and productivity.

Question 25

In determining whether benchmarking is worth the effort,a company must assess the potential return from a benchmarking project.

Question 26

Which of the following is $\textbf{ not }$ an example of a customer-oriented nonfinancial measure?

A)Market share
B)Delivery performance
C)Product flexibility
D)Product defects

Question 27

Which of the following is $\textbf{ not }$ an example of an internal operating nonfinancial measure?

A)Labor productivity
B)Product defects
C)Product flexibility
D)Setup efficiency

Question 28

Direct materials variances,direct labor variances,return on investment,residual income and EVA are performance measures that are

Question 29

Direct material variance is a measure of

A)Outcomes.
B)Inputs.
C)Qualitative factors.
D)None of these ans choices are correct.

Question 30

Direct materials variances,direct labor variances,return on investment,residual income and EVA are performance measures that are

Question 31

For processes that are not identical,companies cannot benefit from benchmarking outside their industry.

Question 32

Benchmarking participants should adhere to the Benchmarking Code of Conduct which provides general principles to follow during the benchmarking process.

Question 33

Measures that can be determined only after something is finished are called

A)Post-operations indicators
B)Lagging indicators
C)Input indicators
D)Objective indicator

Question 34

Lagging indicators can be used to

A)Measure past performance.
B)Predict future results.
C)Provide evidence that a certain result has been obtained.
D)All of these ans choices are correct.

Question 35

The balanced scorecard is a system that forces managers to consider how different parts of their company affect one another.

Question 36

Perfect manufacturing cycle efficiency would yield a ratio of zero - that is,no processing time would be non-value-added.

Question 37

The time between an order's placement and its shipment is referred to as the delivery cycle time.

Question 38

Benchmarking is the practice of using data from other organizations to identify the processes and practices associated with world-class performance.

Question 39

Benchmarking is about trying to achieve another company's metrics.

Question 40

Residual income is a measurement of

A)Inputs.
B)Outcomes.
C)Quality
D)None of these ans choices are correct.

Question 41

Measures that help predict a future result are referred to as

A)Lagging indicators
B)Earnings per share
C)Leading indicators
D)EVA

Question 42

A difference in quantitative indicators and qualitative indicators is

A)Quantitative indicators are the same regardless of who is doing the measuring whereas qualitative indicators will differ among individual since each one has a unique perspective.
B)Qualitative indicators are subjective and quantitative indicators are objective.
C)Both Quantitative indicators are the same regardless of who is doing the measuring whereas qualitative indicators will differ among individual since each one has a unique perspective and Qualitative indicators are subjective and quantitative indicators are objective.
D)Neither Quantitative indicators are the same regardless of who is doing the measuring whereas qualitative indicators will differ among individual since each one has a unique perspective nor Qualitative indicators are subjective and quantitative indicators are objective.

Question 43

Which of the following is $\textbf{ not }$ a reason companies use key performance indicators?

A)Align business activity with corporate strategy
B)Improve company performance
C)Improve timeliness of business decisions
D)All of these ans choices are reasons companies use key performance indicators

Question 44

Qualitative indicators tend to be based on

A)Feelings or accounting records.
B)Feelings or perceptions.
C)Accounting records or perceptions.
D)None of these ans choices are correct.

Question 45

Which of the following is an example of an internal operating nonfinancial measure?

A)Accidents per month
B)Labor productivity
C)Market share
D)Product flexibility

Question 46

Return on investment is a financial measure that is

Question 47

A measure that provides managers with information they need to take timely,corrective action are referred to as

A)Budget indicators.
B)Variance indicators.
C)Cycle indicators.
D)Leading indicators.

Question 48

Nonfinancial measures can be

Question 49

Leading indicators provide managers with the information they need to

A)Prepare direct material and direct labor variances.
B)Take timely,corrective action.
C)Prepare GAAP- based financial statements.
D)All of these ans choices are correct.

Question 50

The best measures relate to corporate strategy and SMART.Which of the following is $\textbf{ not }$ a component of SMART?

A)Tangible
B)Measurable
C)Relevant
D)Specific

Question 51

Before deciding whether a measure is a leading or lagging indicator,a manager should be sure to know

A)What event the measure is related to.
B)Whether the measure is used by other companies in the industry.
C)Both What event the measure is related to and Whether the measure is used by other companies in the industry.
D)Neither What event the measure is related to nor Whether the measure is used by other companies in the industry.

Question 52

Qualitative indicators

A)Tend to be based on feelings.
B)Tend to be based on perceptions.
C)Do not rely on accounting records.
D)All of these ans choices are correct.

Question 53

Which of the following is an example of an employee-oriented nonfinancial measure?

A)Setup efficiency
B)Labor productivity
C)Accidents per month
D)Time to respond to customer problems

Question 54

Earnings per share is a financial measure that is

Question 55

For managers to adequately monitor the organization's performance,they need to use

A)Leading indicators.
B)Lagging indicators.
C)Both leading indicators and lagging indicators.
D)Neither leading indicators nor lagging indicators.

Question 56

Which of the following is an example of a customer-oriented nonfinancial measure?

A)Product flexibility
B)Product defects
C)Production volume
D)New product introductions

Question 57

Which of the following $\textbf{ not }$ a qualitative measure that McDonald's would use?

A)Accidents per month
B)Customer retention
C)Current ratio
D)Number of orders filled incorrectly.

Question 58

The best measures relate to corporate strategy and SMART.Which of the following is $\textbf{ not }$ a component of SMART?

A)Measurable
B)Timeliness
C)Actionable
D)Responsibility

Question 59

Which of the following is $\textbf{ not }$ a reason companies use key performance indicators?

A)Mandate to report company performance to stakeholders
B)Increase accuracy of business decisions
C)Improve company performance
D)All of these ans choices are reasons companies use key performance indicators

Question 60

Which of the following is $\textbf{ not }$ a main barrier to the effective use of nonfinancial performance measures by organizations?

A)Skepticism that the measures are directly related to the bottom line
B)Lack of management skill needed to implement the measures
C)Lack of familiarity with the measures on the part of the board members
D)Undeveloped tools for analyzing the measures

Question 61

Which of the following is $\textbf{ not }$ one of the four balanced scorecard perspectives?

A)Internal business processes
B)Customer
C)Industry
D)Financial

Question 62

A performance measure is actionable if

A)Something can be done to influence its value.
B)It is complete and accurate.
C)It is clearly and directly related to the process it measures.
D)It is based on actual results rather than on estimates.

Question 63

Indicators that measure successful progression toward the organization's goals are referred to as

A)Key performance indicators
B)Specific indicators
C)Lagging indicators
D)Dashboard indicators

Question 64

A measure is relevant if it

A)Is complete and accurate.
B)Is clearly and directly related to the process it measures.
C)Relates to a corporate strategic objective.
D)None of the these ans choices are correct.

Question 65

Which of the following is $\textbf{ not }$ one of the four balanced scorecard perspectives?

A)Learning and growth
B)Production
C)Customer
D)Financial

Question 66

A performance dashboard does which of the following?

A)Offers a visual display of key performance measures
B)Offers managers the opportunity to drill down into the data to obtain information
C)Both Offers a visual display of key performance measures and Offers managers the opportunity to drill down into the data to obtain information
D)Neither Both Offers a visual display of key performance measures nor Offers managers the opportunity to drill down into the data to obtain information

Question 67

A performance measure is measurable if it

A)Measures only one activity.
B)Relates clearly and directly to the process it measures.
C)Relates to a corporate strategic objective.
D)Is complete and accurate.

Question 68

A performance dashboard does which of the following?

A)Offers a visual display of key performance measures
B)Identifies whether a measure is leading or lagging
C)Both Offers a visual display of key performance measures and Identifies whether a measure is leading or lagging
D)Neither Offers a visual display of key performance measures nor Identifies whether a measure is leading or lagging

Question 69

Before a balanced scorecard can be developed,managers must

A)Be clear about the strategy they are trying to achieve.
B)Understand the cause-and-effect relationship between various measures.
C)Both Be clear about the strategy they are trying to achieve and Understand the cause-and-effect relationship between various measures.
D)Neither Be clear about the strategy they are trying to achieve nor Understand the cause-and-effect relationship between various measures.

Question 70

When using the balanced scorecard to monitor performance,the learning and growth perspective Answers which of the following questions?

A)Are we developing employees and providing technologies that facilitate change and improvement?
B)Are we creating products and hiring employees with skills to create product and deliver them in a timely manner?
C)Are we meeting our stakeholders' expectations?
D)Are we growing in a manner to be competitive in the industry?

Question 71

A balanced scorecard does $\textbf{ not }$

A)Integrate performance measures across four different perspectives.
B)Provide a visual display of the key measures related to an organization's operational goals and strategies.
C)Help managers understand the interrelationships between various areas of an organization.
D)A balanced scorecard does all of the following

Question 72

A performance measure is specific if it

A)Measures only one activity.
B)Relates clearly and directly to the process it measures.
C)Is either qualitative or nonfinancial,but not both.
D)Is complete and accurate.

Question 73

A visual display of the key measures related to an organization's operational goals and strategies is referred to as a

A)Balanced scorecard.
B)Performance dashboard.
C)Strategy map.
D)Benchmark report.

Question 74

A management tool that integrates performance measures across four different perspectives to guide operations toward achieving an organization's strategy is called

A)Performance dashboard.
B)Balanced scorecard.
C)Key performance measures.
D)None of these ans choices are correct.

Question 75

When using the balanced scorecard to monitor performance,which of the following perspectives is the foundation for improvement in all other areas?

A)Internal business processes
B)Financial
C)Learning and growth
D)Customer

Question 76

A manager can use a performance dashboard for

A)Driving business operations.
B)Focusing on critical measures.
C)Both driving business operations and focusing on critical measures.
D)Neither driving business operations nor focusing on critical measures.

Question 77

A balanced scorecard

A)Integrates performance measures across four different perspectives.
B)Assists in communicating the corporate strategy throughout the organization.
C)Helps managers understand the interrelationships between various areas of an organization.
D)All of these ans choices are correct.

Question 78

Which of the following is not one of the four balanced scorecard perspectives?

A)Customer
B)Financial
C)Learning and growing
D)All of these ans choices are balanced scorecard perspectives

Question 79

Which of the following geographical regions report the highest usage of a balanced scorecard to monitor performance?

A)Asia
B)Canada
C)South America
D)United States

Question 80

Approximately what percentage of global business executives use a balanced scorecard to monitor performance?

A)16%
B)41%
C)66%
D)91%