Question 1

Which of the following statements regarding Fitzgerald and Moon’s Building Blocks model are correct?

(1) The determinants of performance are quality, innovation, resource utilisation and competitiveness

(2) Standards are targets for performance and should be fair, achievable and controllable

(3) Rewards encourage staff to work towards the standards and should be clear, motivating and controllable

(4) It is a performance measurement framework particularly suitable for service organisations

Accepted Answer

(3) and (4)

Answer

(1), (2) and (3)

Answer

(1), (2) and (4)

Answer

(2) and (3) only

Question 2

The Building Block Model devised by Fitzgerald and Moon sets out a framework for the design and analysis of performance management systems. The first building block, 'Dimensions', identifies six goals for the business which must be measured.

Which THREE of the following are correct dimensions within the Fitzgerald and Moon performance management model?

Question 3

In the Building Blocks model, quality of service means:

Accepted Answer

This relates to aspects of the service which are valued by customers and includes factors such as the courtesy and competence of the staff providing service to the customer

Answer

This relates to the ability to meet customer needs and specifications, when they are required, for example, by responding to fluctuations in demand

Answer

This relates to productivity, which is how efficiently key resources are used

Answer

This relates to specific innovations or the process by which the company introduces new innovations.

Question 4

In the Building Blocks model, flexibility means:

Accepted Answer

This relates to the ability to meet customer needs and specifications, when they are required, for example, by responding to fluctuations in demand

Answer

This relates to specific innovations or the process by which the company introduces new innovations.

Answer

This relates to aspects of the service which are valued by customers and includes factors such as the courtesy and competence of the staff providing service to the customer

Answer

This relates to productivity, which is how efficiently key resources are used

Question 5

In the Building Blocks model, resource utilization means:

Accepted Answer

This relates to productivity, which is how efficiently key resources are used

Answer

This relates to specific innovations or the process by which the company introduces new innovations.

Answer

This relates to aspects of the service which are valued by customers and includes factors such as the courtesy and competence of the staff providing service to the customer

Answer

This relates to the ability to meet customer needs and specifications, when they are required, for example, by responding to fluctuations in demand

Question 6

In the Building Blocks model, innovation means:

Accepted Answer

This relates to specific innovations or the process by which the company introduces new innovations.

Answer

This relates to aspects of the service which are valued by customers and includes factors such as the courtesy and competence of the staff providing service to the customer

Answer

This relates to the ability to meet customer needs and specifications, when they are required, for example, by responding to fluctuations in demand

Answer

This relates to productivity, which is how efficiently key resources are used

Question 7

In the Fitzgerald and Moon building blocks model, which statement below is INACCURATE about standards?

Accepted Answer

It also considers the properties of good reward schemes

Answer

If the targets set do not meet these criteria, then the performance of the organisation could suffer

Answer

The targets must meet three criteria – they must be achievable, fair and encourage employees to take ownership

Answer

The standards block sets the target for the performance indicators chosen for each of the dimensions.

Question 8

In the Fitzgerald and Moon building blocks model, which statement below is INACCURATE about rewards?

Accepted Answer

A bonus scheme of employees being paid for achieving a target of 90% is considered motivating

Answer

If standards and rewards are not properly set, the organization's objectives may not be met

Answer

It also considers the properties of good reward schemes which are that they should be clear, motivating and based on controllable factors

Answer

The rewards block ensures that employees are motivated to achieve the standards.

Question 9

The management consultant suggested that Company X's bonus system award bonuses to the drivers when overall retailer satisfaction exceeded 90%.

Which of the statement below does NOT test the bonus scheme based on the building blocks rewards criteria?

Accepted Answer

The standards are set. This should act as encouragement to achieve it.

Answer

In its current form, the reward would be considered unclear as the drivers do not know how the satisfaction will be measured example, a survey and what questions will be asked.

Answer

There will be some factors which are in control of the drivers in their interaction with the retailers and, in that sense, the measure can be seen as a fair one. However, they cannot control other factors such as conditions on the roads, adverse weather conditions and problems with access to retailers premises which could affect delivery. These factors are outside their control.

Answer

If the drivers are not likely to achieve the 90% target, but achieve for example 80%, will they be awarded a bonus (lower amount) anyway? If, not the bonus does not provide enough motivation.

Question 10

SELECT the statement the incorrect statement about reward scheme

Accepted Answer

A reward scheme should encourage staff participation in setting targets

Answer

A reward scheme should support recruitment and retention

Answer

A reward scheme should promote ethical behaviour and compliance with the workplace rules and expectations

Answer

A reward scheme should motivate employees to high levels of performance

Answer

A reward scheme should support the overall strategy of the organization by aligning the goals of the individuals with those of the organization

Question 11

Which of the following is NOT a benefit of performance measures?

Accepted Answer

They can be costly to setup and may measure the incorrect thing

Answer

Facilitate the setting of targets for the organization and its managers

Answer

Clarify the objectives of the organization

Answer

Facilitate comparison of performance in different organizations

Answer

Promote accountability of the organization to its shareholders

Question 12

The term What gets measured get done, means all the following EXCEPT?

Accepted Answer

The area being measured should only be financial

Answer

If the wrong thing is being measured the wrong thing will get done

Answer

Wastage of management's time and company's resources is possible if the incorrect measure was chosen

Answer

Poorer business performance is possible, if the metrics chosen were not aligned to the business objectives and strategies

Answer

What is measured is given focus and responsibility. Due to accountability managers will normally act to get it done

Question 13

Targets should be challenging but achievable means?

Accepted Answer

The targets must be challenging enough to push employees, in order to motivate them to maximum effort, without being perceived to be so improbable to achieve that they demotivate the employees.

Answer

The proposal here is to use so-called stretch targets that aim beyond the easily achievable and reaches the improbable level

Answer

Employees should be allow to set their own targets

Answer

Employees should not be involved in target setting

Question 14

Staff appraisal schemes should do all the following EXCEPT?

Accepted Answer

Be subjective

Answer

Identify future aspirations and expectations (career management)

Answer

Provide a forum for exchanging feedback

Answer

Set motivating challenges

Answer

Identify training needs

Question 15

Performance measure have all the following problems EXCEPT?

Accepted Answer

Defalcation. A deliberate effort to get gain a reward by any means necessary.

Answer

Ossification. An unwillingness to change the performance measure once established

Answer

Gaming. Deliberate distortion of a measure to achieve some personal advantage such as under performance

Answer

Misrepresentation. Such as surveys being done on favorable clients

Answer

Myopia. Short-sightedness leading to neglect of longer term objectives

Answer

Tunnel vision through undue focus on performance measures to the detriment of other areas

Question 16

Although rapidly growing, Graviton has had some problems in the last few years which have appeared on recent internal audit reports. At factory site 2, there has been excellent return on a low capital employed figure although there is a significant adverse variance in the equipment repairs account.

The above can best be classified as?

Accepted Answer

Gaming

Answer

Myopia

Answer

Tunnel vision

Answer

Measure fixation

Answer

Ossification

Answer

Sub-optimization

Question 17

Although rapidly growing, Graviton has had some problems in the last few years which have appeared on recent internal audit reports. At factory site 2, there has been excellent return on a low capital employed figure although there is a significant adverse variance in the equipment repairs account.

The above can best be classified as?

Accepted Answer

Myopia

Answer

Tunnel vision

Answer

Ossification

Answer

Gaming

Answer

Measure fixation

Answer

Sub-optimization

Question 18

The board is dominated by long-serving executives who are sceptical of change, given Graviton’s growth over the past three years.

The above can best be classified as?

Accepted Answer

Ossification

Answer

Sub-optimization

Answer

Measure fixation

Answer

Gaming

Answer

Tunnel vision

Answer

Myopia

Question 19

The board at Ganymede has always focused on revenue and dividend payments as its main performance measures. However, it is not doing as well as competitors and it costs have been rising uncontrollably. The board is demonstrating?

Accepted Answer

Tunnel vision

Answer

Sub-optimization

Answer

Myopia

Answer

Gaming

Answer

Misrepresentation

Question 20

Fashion House's mission is ‘to deliver returns to shareholders above the average for the retail sector by providing a superior customer experience from the appearance of the stores to the attractive range of clothes which are sold with enthusiasm'. They currently measure operating profit, group after tax profit, inventory write-downs, revenue and provide no industry figures for comparison. The Board is displaying what type of behaviour?

Accepted Answer

Sub-optimization

Answer

Gaming

Answer

Myopia

Answer

Tunnel vision

Answer

Misrepresentation

Question 21

The problems associated with performance measures can be addresses by all of the following EXCEPT?

Accepted Answer

Many people will tend to focus effort on the explicit measures of their performance

Answer

Careful considerations to dimensions of performance. E.g. quantification of all objectives

Answer

Constant review of the continued usefulness of the measures, should help reduce instances of ossification and gaming

Answer

Involvement of staff at all levels to help reduce tunnel vision and gaming

Answer

Flexible use of performance measures should help reduce fixation and misrepresentation

Answer

Audit of the scheme to identify areas of weaknesses

Question 22

Which of the following is NOT a type of psychological contract?

Accepted Answer

Compulsory contract. Employee is forced to work late with compensation.

Answer

Calculative contract. Employee is paid more for more work, participates in setting targets

Answer

Coercive contract. Employee is being ask to account for areas outside their responsibility and does not participate in target setting.

Answer

Cooperative contract. Employee is paid more for more work, participates in setting targets and has personal goal congruence with the organization

Question 23

Hopwood suggested three (3) performance management styles. Which of the styles can be described as The targets set are all financial and are short term in that they are only for the next financial year

Accepted Answer

budget-constrained

Answer

non-accounting

Answer

profit-conscious

Question 24

Hopwood suggested three (3) performance management styles. Which of the styles can be described as managers are evaluated on their ability to build long-term profits for the business

Accepted Answer

profit-conscious

Answer

non-accounting

Answer

budget-constrained

Question 25

Hopwood suggested three (3) performance management styles. Which of the styles can be described as budgetary information plays a less important part of staff’s performance evaluation. It suits an emphasis on quality and on operational factors i.e. non-financial measures

Accepted Answer

non-accounting

Answer

profit-conscious

Answer

budget-constrained

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