1Performance evaluation systems provide top management with a framework for maintaining control over                                           the organization.

2Companies benchmark their performance against the performance of their competitors and also against                                           their own past performance.

3Decentralization increases the difficulty of achieving goal congruence among managers.

4If a manager’s performance is evaluated solely on the ability to control costs, he or she may sacrifice                                           quality for savings, thus endangering customer satisfaction.

5From the shareholders’ point of view, performance measurement should focus on financial performance                                           only.

6Financial performance metrics are considered to be a lead indicator, providing signs of future                                                         performance.

7Which of the following goals of a performance evaluation system is accomplished when targets are                                           compared to actual results?

A) Communication of a company’s expectations

B) The promotion of goal congruence

C) Motivation of assembly line employees

D) Providing feedback to management

8Which one of the following is NOT a goal of a performance evaluation system?

A)Communicating expectations

B)Formulating a budget

C)Motivating unit managers

D)Providing feedback

9Which of the following statements reflects the use of benchmarking in a performance evaluation system?

A)A company uses internal controls to prevent theft and wastage.

B)A company initiates innovative production technology.

C)A company compares its performance metrics with other companies in its industry.

D)A company attracts top talent from other companies using stock options and other financial rewards.

10Which one of the following is NOT a goal of a performance evaluation system?

A)Communicating expectations

B)Benchmarking

C)Motivating unit managers

D)Issuing stock to investors

11The performance measurement system should provide incentives for coordinating activities of the                                           subunits and focusing them toward the overall company objectives.  This statement reflects which of the                                           following performance measurement goals?

A)Motivating unit managers

B)Promoting goal congruence

C)Providing feedback

D)Benchmarking

12The performance measurement system should compare the company’s performance against the best                                           practices in the industry.  This statement reflects which of the following performance measurement goals?

A)Motivating unit managers

B)Promoting goal congruence

C)Providing feedback

D)Benchmarking

13The performance measurement system must ensure that managers know the specific goals and                                                         targets for the subunits.  This statement reflects which of the following performance measurement                                           goals?

A)Motivating unit managers

B)Communicating expectations

C)Providing feedback

D)Motivating managers

14The performance measurement system lets upper management know whether the subunits are achieving                                           their goals and targets or not.  This statement reflects which of the following performance measurement                                           goals?

A)Motivating unit managers

B)Communicating expectations

C)Providing feedback

D)Motivating managers