Question 3
What is a performance measurement system?
Click the button next to the correct answer choice. After you have read the feedback, explore the other choices. Note: Your first selection will be used to tally your score.
A series of graphs showing changes in a company's performance over a specified period
Not the best choice. Though a company's performance measurement (PM) system might include tools for creating graphs showing changes in performance, the correct definition of a PM system is a set of strategic objectives and performance metrics applied throughout an entire enterprise. A PM system enables executives to see how business results generated in the company's many different units combine to influence the enterprise's overall results. Thus a PM system gives executives and managers a comprehensive, high-level view of their organization's performance—and an understanding of how the company's different parts work together to produce business results.
Commonly used PM systems include dashboards (also called cockpits) showing aggregated performance data; quality-improvement systems such as Six Sigma and the Baldrige National Quality Program; and the Balanced Scorecard.
A centralized database containing performance data from every part of an organization
Not the best choice. Though some performance measurement (PM) systems may use a database to store and report data, the correct definition of a PM system is a set of strategic objectives and performance metrics applied throughout an entire enterprise. A PM system enables executives to see how business results generated in the company's many different units combine to influence the enterprise's overall results. Thus a PM system gives executives and managers a comprehensive, high-level view of their organization's performance—and an understanding of how the company's different parts work together to produce business results.
Commonly used PM systems include dashboards (also called cockpits) showing aggregated performance data; quality-improvement systems such as Six Sigma and the Baldrige National Quality Program; and the Balanced Scorecard.
A set of strategic objectives and performance metrics applied throughout an entire enterprise
Correct choice. Because a performance measurement (PM) system is applied throughout an entire organization, it enables executives to see how business results generated in the company's many different units combine to influence the enterprise's overall results. Thus a PM system gives executives and managers a comprehensive, high-level view of their organization's performance—and an understanding of how the company's different parts work together to produce business results.
Commonly used PM systems include dashboards (also called cockpits) showing aggregated performance data; quality-improvement systems such as Six Sigma and the Baldrige National Quality Program; and the Balanced Scorecard.