evaluation systems for managers
Not what you're looking for?
Discussion Question 1
The executive management team of your company has completed its annual evaluations of each division's performance using residual income measures. The division managers were ranked according to the residual income in each division. All division managers with residual income in the upper half of the ranking received a bonus. The bonus amount was proportional to the residual income amount. No bonuses were paid out to managers in the lower half of the ranking. Is this an effective evaluation system? What could be done to improve the system, if anything?
Discussion Question 2
Many companies use performance reports as a way of measuring productivity and controllability. However, some managers consider such reports as useless since nobody really controls anything in an organization. Is this a fair assessment? Can control be measured? Explain.
Purchase this Solution
Solution Summary
This posting gives you an in-depth insight into evaluation systems for managers
Solution Preview
Discussion Question 1
The executive management team of your company has completed its annual evaluations of each division's performance using residual income measures. The division managers were ranked according to the residual income in each division. All division managers with residual income in the upper half of the ranking received a bonus. The bonus amount was proportional to the residual income amount. No bonuses were paid out to managers in the lower half of the ranking. Is this an effective evaluation system? What could be done to improve the system, if anything?
Residual income refers to the after-tax profit less an ascribed interest charge for the opportunity cost of capital employed by the business. This indicator is taken into account for the annual evaluation of the managers and for determining the management bonuses.
This is an effective evaluation system to the extent that the system takes into account the profits earned by the division and the opportunity cost of capital. However, the practical ...
Purchase this Solution
Free BrainMass Quizzes
Understanding the Accounting Equation
These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.
Organizational Behavior (OB)
The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.
Academic Reading and Writing: Critical Thinking
Importance of Critical Thinking
Social Media: Pinterest
This quiz introduces basic concepts of Pinterest social media
Transformational Leadership
This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.