Performance measurement MCQs | Performance management

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Performance measurement is collecting, analyzing and reporting information regarding individual, organization or system. It involves study of processes and strategies.
Performance measurement MCQs Performance management

Performance measurement MCQs

Performance measurement is collecting, analyzing and reporting information regarding individual, organization or system. It involves study of processes and strategies. Here on MCQs.club we have designed simple and easy understandable Multiple-Choice Questions (MCQs) on Performance measurement that fully covers the courses on Performance management, budget and budgetary control, its definition, meaning, system, techniques, types, concepts, key principles. There are also Strategic control and critical success factors MCQs covered. These MCQs are useful for Business management exams, Accountancy exams and competitive exams.

  1. Performance management –:
    1. Is a process by which organization align their resources, systems and employees to strategic objectives?
    2. Is collecting, analyzing and reporting information regarding individual, organization or system. It involves study of processes and strategies.
    3. Both A&B
    4. None
  1. Performance measurement –:
    1. Is a process by which organization align their resources, systems and employees to strategic objectives?
    2. Is collecting, analyzing and reporting information regarding individual, organization or system. It involves study of processes and strategies.
    3. Both A&B
    4. None
  1. Companies will need to develop measurement mixes to reflect their critical success factor listing. The mix will consider:
    1. Environment
    2. Strategy
    3. Business type
    4. All of the above
  1. The mix often forms the basis for the reward scheme for senior executives and consideration must be given to the issues of sub optimality and short-term risks.
    1. True
    2. False
  1. Which of the following statement is correct with regard to the determination of the measurement mix?
    1. Identify the objectives of the process and order them in terms of priority.
    2. Identify the critical success factors of the operation as first seen.
    3. Perform a position audit to identify the current situation and identify any extra critical success factors.
    4. With a view of the critical success factors, develop a pilot measurement mix, perhaps containing a mixture of financial and non-financial elements (balanced scorecard).
    5. Evaluate the mix in terms of culture and change implication.
    6. Deploy and monitor
      1. All of the above
      2. (I) (IV) and (V) only
      3. (IV) and (V) only
      4. None
  1. Which of the following statement is correct?
    1. Too many measures lead to indicator overload
    2. If something is measured then the importance of that item is highlighted to staff and such this is communication exercise.
    3. At the same time, when you drop a measure from the mix, you will be communicating that it is no longer appropriate.
    4. All of the above are correct
  1. Single loop feedback –:
    1. Results in the system’s behaviour being altered to meet the plan.
    2. Can result in changes to the plan itself.
    3. Both A&B
    4. None

  1. Double loop feedback –:
    1. Results in the system’s behaviour being altered to meet the plan.
    2. Can result in changes to the plan itself.
    3. Both A&B
    4. None
  1. Identify the necessary conditions that must be satisfied before any process can be said to be controlled:
    1. Objectives for the process being controlled must exist, for without an aim or purpose control has no meaning.
    2. The output of the process must be measurable in terms of the dimensions defined by the objectives.
    3. A predictive model of the process being controlled is required so that causes for the nonattainment of objectives can be determined and proposed corrective actions evaluated.
    4. There must be a capability of taking action so that deviations of attainment from objectives can be reduced.
    5. All of the above
  1. Which of the following statement is correct regarding ‘Performance measurement’?
    1. Performance measurement is the ‘process of assessing the proficiency with which a reporting entity succeeds, by the economic acquisition of resources and their efficient and effective development, in achieving its objectives. Performance measures may be based on non-financial as well as on financial information’.
    2. Performance measurement aims to assess how well something or somebody is doing in relation to previous or expected activity, or in comparison with other processes or people.
    3. Both A&B
    4. None
  1. The purpose of performance measurement includes:
    1. Performance measurement is part of the overall cybernetic (or feedback) control system, providing the essential feedback spur to any necessary control action.
    2. It is a major input into communications to stakeholder groups, including the widening field of corporate reporting.
    3. It is intimately linked to incentives and performance management systems, providing evidence of results against agreed objectives.
    4. Motivation may be enhanced since managers will seek to achieve satisfactory performance in areas that are measured.
      1. All of the above
      2. (I) and (III) only
      3. (III) only
      4. None
  1. Neely’s ‘CPs’ of Performance Measurement are:
    1. Check Position – how well are we doing? (This should look at both financial and non-financial factors).
    2. Communicate Position – to stakeholders so that they know how the business is performing.
    3. Confirm Priorities – setting targets for business and developing action plans to help achieve them.
    4. Compel Progress – measuring performance is a strong driver for change, especially if it is linked to reward.
    5. All of the above
  1. Which of the following is correct regarding ‘Budgets as a control mechanism’?
    1. Budgetary control – is the process whereby the ‘master budget, devolved to responsibility centres, allows continuous monitoring of actual results versus budget, either to secure by individual action the budget objectives or to provide a basis for budget revision’.
    2. Budgets are a vital control mechanism in organisations, and offer an important way of linking strategy to operations.
    3. Budgets provide a quantitative expression of how strategic plans will be implemented over a period of time, and as such they play a key role in communicating ideas and performance targets across different departments and business units.
    4. All of the above
  1. The purposes of budgets of include:
    1. Planning – Budget holders are forced to plan how to achieve targets that should ensure the organisation’s overall strategic plan is achieved (eg for sales, margins, quality levels)
    2. Responsibility – Budgets help allocate responsibility, and specify which managers control which costs.
    3. Integration – The process of preparing budgets should help ensure that the planned activities of one area of an organisation do not conflict with another.
    4. Motivation – If managers and employees are involved in setting the budget targets, this will increase their motivation in trying to achieve the targets.
    5. Evaluation – Budgets allow trends in performance to be identified and investigated.
      1. All of the above
      2. (I) (II) and (V) only
      3. (I) and (V) only
      4. None

  1. The drawbacks of budget include:
    1. There is no incentive to try and achieve budgeted figures if the budget is unrealistic.
    2. A manager may build slack into their budget targets to ensure the budget can be met.
    3. A manager may simply aim to ‘achieve’ the target but do no more than that.
    4. A manager may go on a ‘spending spree’ if budgeted funds remain unspent.
    5. The budget may focus on short-term results rather than longer term consequence
      1. (II) and (III) only
      2. (II) (III) and (IV) only
      3. All of the above
      4. None
  1. Strategic control is bound up with measurement of performance, which often tends to be based on financial criteria. Techniques for strategic control suggest that companies develop strategic milestones (eg for market share) to monitor the achievement of strategic objectives, as a counterweight to purely financial issues.
    1. The above statement is correct
    2. The above statement is incorrect
  1. Which of the following statement is correct regarding critical success factors?
    1. A Critical Success Factor (CSF) is ‘An element of the organisational activity which is central to its future success. Critical success factors (CSFs) may change over time, and may include items such as product, quality, employee attitudes, manufacturing flexibility and brand awareness’.
    2. CSFs are those components of strategy which are particularly valued by customers, and therefore at which the organisation must excel to outperform its competitors. As such, CSFs are underpinned by the core competences which will lead to an organisation’s success.
    3. Both A&B
    4. None

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