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How an organization sets standards

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1. When an organization sets standards, how does that impact the individuals in the organization? How much consideration should be given to those impacts?

2. How does an organization determine whether an activity "matches" cost behaviors?

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This solution provides explanations for how an organization sets standards and how it determines whether an activity matches cost behaviors.

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1. When an organization sets standards, how does that impact the individuals in the organization? How much consideration should be given to those impacts?

Standards let us to compare individuals' performance with an organization's goals and expectations and minimize ambiguity in providing feedback. When we observe an individual's performance, we usually make a judgment about whether that performance is acceptable or not by providing specific feedbacks describing the gap between expected and actual performance. These standards identify a baseline for measuring performance. Our performance standards should be written for each activity and key area of responsibility on the employee's job description and describe the conditions that should exist before the performance can be rated satisfactory. All these goals must be expressed in terms of quantity, quality, time, cost and the methods. These standards let individuals to differentiate between acceptable and ...

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Umut Oltulu, MBA
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  • BSc, Dokuz Eylul University
  • MBA, Texas A&M University-Kingsville
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