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Chapter 21 - Performance Management and Evaluation Chapter...

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Chapter 21 Author: Anna Rovira Beavers Needles 2008 8/6/07 1 MANAGERIAL ACCOUNTING Performance Management and Evaluation Chapter 21 I. The Balanced Scorecard A series of reports that translates the organization’s mission and goals into quantifiable performance targets. Some of key evaluations performed in the balance scorecard could be: From an investors prospective Revenues, Orders, Income before taxes, expenses etc. From customer perspective Retention, satisfaction etc. From Internal business perspective Cycle time, number of calls taken, internal cost, efficiency, etc. From Employees perspective Training, employee satisfaction, etc. Typical scorecards are represented in the form of graphs overtime and it will contained: Objective -> Measure -> Target Revenue Growth Annual sales Sales increase (Usually from budget process ) For a sample of a balance scorecard go to page 1068 of your textbook. In-Class: SE1 II. Performance Measures The use of quantitative tools to gauge an organization’s performance in relation to a specific goal or an expected outcome. The most important task that management must perform is to develop a series of company measurements that ties to the company’s goals and objectives. As companies change their objectives to meet economic challenges, performance measures must change. The key is to be measuring what is pertinent to the current business environment this will help the company meet their goals.
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Chapter 21 Author: Anna Rovira Beavers Needles 2008 8/6/07 2 Some issues management must deal with: What performance measures can be used? How can product or service quality be measured?
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