How does a strategic performance measurement system improve upon an ordinary performance measurement system?
Explain how a strategic performance measurement system is better than ordinary performance measurement system.
Explanation of Solution
Strategic Performance Measurement System:
Strategic performance measurement system is an approach widely being followed in the organizations to analyze the performance of the employees. This defines the strategic objectives of the organization and links them to the performance of the employees. The goals of the company are aligned with the metrics of measurement under this system. Balanced scorecard is a commonly used strategic performance measurement tool.
The strategic performance measurement system is better than the ordinary performance measurement system as more parameters, both financial and non-financial, are taken into consideration under the former system. Also strategic performance measurement system, is cost effective to the management and easy to execute.
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Chapter 28 Solutions
Financial And Managerial Accounting
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