Accounting › Section Y · Balanced scorecard and performance measures › Topic Y.1
Why measure performance, and what makes a good measure
Once decisions are spread across many managers, the company needs a way to see whether those decisions serve its goals. Good performance measures do that; poor ones quietly reward the wrong behaviour.
In this topic
- Why measure at all
- Goal congruence
- From strategy to measures
- The controllability principle
- Worked example: Dunmere's controllable costs
- What makes a good measure
- Limits of accounting measures
- Worked example: a bonus that backfires
- When a measure becomes a target
- Common mistakes to avoid
- Key takeaways
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