Which of the following statements regarding performance measures is true?
A)GAAP requires performance measures for all employees.
B)Companies must select from performance measures published by its own industry when deciding how they want to assess performance.
C)Employees tend to direct their attention to what is measured and may neglect what is not measured.
D)Companies need to place emphasis on a single performance measure so employees know what to expect.

Question

Quizplus · Accepted Answer

This statement is true as the attention of employees tends to be directed towards what is being measured, meaning that other important areas may be neglected. GAAP does not require performance measures for all employees, and companies are not limited to using industry-specific performance measures. It is also not necessary for companies to place emphasis on a single performance measure as different measures may be appropriate for different roles and responsibilities.

Which of the Following Statements Regarding Performance Measures Is True