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Mcs - M Agung Zandra - Budgeting and Financial Performance Target
Mcs - M Agung Zandra - Budgeting and Financial Performance Target
A. Performance measurement
- Purpose should be implemented to strategy
- Should look at both short and long term
- Must measure critical success factor
- Used to motivate and reward people
C. Implementation
1. What’s the organizational strategy?
2. What’s the specific goal?
Must be measurable
3. How is it to be measured?
Must provide for quantification
4. Does it integrate measure to the evaluation?
5. Are the results reviewed frequently?
D. What to avoid
1. Emphasis on short term financial measures
2. Attempting to link non financial measures with financial results
3. Excessive goals and measurement
4. Outdated targets
5. Failure to use interactive control
a. Don’t try to integrate into balance scorecards
E. Management compensation
1. Should seek goal congruence
2. Should provide positive incentives
3. Should be focus as a team effort
4. Should be required conformance to standard procedures
F. Compensation plans
1. Salary
2. Benefits
3. Incentives
- Types of incentives
1. Financial
2. Nonfinancial
G. Performance criteria
1. Reasonable and understandable
2. Adjusted as needed
3. Measurement against planned
H. Against theories
1. Decisions making authority delegated by owner to service providers
2. Owners expect service providers to act in ownership best interest
3. Owners and service providers do not have same objectives