Setting performance goals based on historical data and past performance creates:
A) horizon problem.
B) compensating differential.
C) opportunism.
D) ratchet effect.

Question

Quizplus · Accepted Answer

Setting performance goals based on historical data and past performance can create the ratchet effect, which occurs when goals are consistently set based on past performance without consideration for current circumstances or potential improvements. This can lead to complacency and a lack of motivation to improve beyond the established baseline.

Setting Performance Goals Based on Historical Data and Past Performance