Performance Management · Performance analysis

Other Performance Frameworks and Non-Financial Indicators in ACCA PM

Updated 11 October 2026 · Fact-checked

These are frameworks that stop you judging performance on profit alone. Fitzgerald splits measures into results and determinants. The Building Block model adds standards and rewards. The Performance Pyramid links strategy to operations. Non-financial indicators measure quality, time, customers and people. In the exam, classify, apply and then evaluate.

Understand Other Performance Frameworks and Non-Financial Indicators

Financial measures such as profit and ROI look backwards. They tell you what happened but not why. Performance frameworks add other views so managers can see causes as well as results.

Fitzgerald's results and determinants splits measures into two groups. Results are competitiveness and financial performance. Determinants are the things that produce those results: quality of service, flexibility, resource utilisation and innovation. Results are the outcome. Determinants are the drivers. It was designed mainly for service businesses.

The Building Block model (Fitzgerald and Moon) has three parts. Dimensions are the areas you measure (the same six as Fitzgerald). Standards are the targets set for each dimension. Rewards are the incentives linked to hitting them. For standards to work they must be ownable (staff feel responsible), achievable and fair. Rewards must be clear, motivating and controllable by the person rewarded.

The Performance Pyramid (Lynch and Cross) has four levels. At the top is the corporate vision. Next are business unit market and financial measures. Next are the business operating systems, measured by customer satisfaction, flexibility and productivity. At the base are departments and work centres, measured by quality, delivery, cycle time and waste. Objectives flow down and results flow up. The pyramid also splits measures into external (customer-facing) and internal (efficiency).

Non-financial performance indicators (NFPIs) are measures not expressed in money. Examples are defect rates, on-time delivery, customer complaints, staff turnover and market share. They are often available faster than financial results, are easier for operational staff to influence and can predict future financial results. Their weakness is that they can be hard to compare, can conflict with each other and may not link to profit unless you choose them with care.

Key rules to remember

Fitzgerald: results: Results = Competitiveness + Financial performance; Outcomes of past strategy choices.
Fitzgerald: determinants: Determinants = Quality + Flexibility + Resource utilisation + Innovation; Drivers of the results. Remember the lists of both groups.
Building Block model: Dimensions + Standards + Rewards; Standards should be ownable, achievable and fair. Rewards should be clear, motivating and controllable.
Performance Pyramid levels: Vision → Market and financial measures → Customer satisfaction, flexibility, productivity → Quality, delivery, cycle time, waste; Top two levels are mainly external. The lower levels are mainly internal.
Flexibility measures: Examples: speed of delivery, ability to handle volume changes, ability to customise; Use these when asked how to measure flexibility.

How to solve Other Performance Frameworks and Non-Financial Indicators questions

Use this method for any question on frameworks or non-financial indicators. It works for OT cases and for written Section C parts.

1Read the requirement and identify the task: classify measures, apply a framework, suggest indicators or evaluate.
2Name the framework you are using and give its structure in one line.
3Pick facts from the scenario and place them in the right category, for example result or determinant.
4For each category, suggest a specific measure linked to the business, with a unit where possible (for example % on-time deliveries).
5Link each measure to strategy or to a financial result so it is not just a list.
6For Building Block, comment on standards (ownable, achievable, fair) and rewards (clear, motivating, controllable).
7Add a limitation or a gap: missing dimensions, conflicting measures, data cost or manipulation.
8Finish with a short recommendation that answers the exact requirement.

Quickest way: Classify first, then apply the labels

When to use it: Use in Section A and OT case questions that ask which category a measure belongs to.

Ask: is this a money outcome or market outcome? If yes, it is a result (financial performance or competitiveness).
If it explains how the outcome was achieved, it is a determinant.
Match to type: complaints and defects go to quality; speed and customisation go to flexibility; capacity use goes to resource utilisation; new services go to innovation.
For the Building Block model, ask whether it concerns what is measured, the target or the incentive.
For the pyramid, ask whether the measure is external or internal and which level it sits at.
Eliminate options that mix categories, then choose the best fit.

Common mistakes in Other Performance Frameworks and Non-Financial Indicators

Treating market share or sales growth as a determinant.
They feel like drivers because managers try to increase them.
Fix: In Fitzgerald they are results under competitiveness. Determinants are quality, flexibility, resource utilisation and innovation.
Saying the Building Block model has the same six items as its three blocks.
The dimensions and the blocks are confused.
Fix: The model has three blocks: dimensions, standards and rewards. The six Fitzgerald measures sit inside the dimensions block.
Listing standards and rewards characteristics without applying them.
Students memorise the acronyms but skip the scenario.
Fix: Say whether the scenario's targets are achievable or fair and whether the bonus is controllable by the manager. Give a reason from the facts.
Giving vague non-financial indicators such as 'customer satisfaction'.
Students name the area but do not say how to measure it.
Fix: State the measure, for example number of complaints per 1,000 orders or percentage of repeat customers.
Describing the pyramid as a hierarchy of financial ratios.
It is mistaken for a ratio tree.
Fix: Explain that it links vision to operations, with objectives flowing down and measures flowing up, and that it mixes external and internal measures.
Presenting non-financial indicators as always better than financial ones.
Students overread the advantages.
Fix: Give a balanced view. They need financial context, may conflict and can be gamed. Use both types together.

Worked examples

Example 1

A courier company reports these measures: (1) profit margin, (2) percentage of parcels delivered on the promised day, (3) percentage of vehicle capacity used, (4) market share in its region, (5) number of new delivery services launched. Classify each under Fitzgerald's framework.

Show the solution

Profit margin is a money outcome, so it is a result: financial performance.
Percentage of parcels delivered on the promised day measures reliability of service, so it is a determinant: quality of service.
Percentage of vehicle capacity used measures how well resources are used, so it is a determinant: resource utilisation.
Market share is an outcome in the market, so it is a result: competitiveness.
New services launched shows new offerings, so it is a determinant: innovation.

Answer: 1 Result (financial performance); 2 Determinant (quality); 3 Determinant (resource utilisation); 4 Result (competitiveness); 5 Determinant (innovation).

Example 2

A call centre operator sets each team a target of answering 95% of calls within 20 seconds. Targets were set by head office without consulting teams. Team leaders get a bonus based on the total company profit. Evaluate the arrangement using the Building Block model.

Show the solution

Standards: the target is specific and measurable, but it was set without consultation. So it is probably not ownable, and teams may not see it as fair.
Achievability is unknown. Head office should check call volumes, staffing levels and past performance before treating the target as achievable.
Rewards: the bonus is based on total company profit. A team leader has little control over this, so the reward is not controllable and is weakly motivating.
Clarity: the link between answering calls quickly and the bonus is indirect, so the reward is also unclear.
Dimensions: the target covers only speed, a quality-of-service measure. Other dimensions such as resource utilisation, flexibility and customer satisfaction are not measured, so staff may rush calls.
Recommendation: consult teams on targets, add measures such as first-call resolution, and link the bonus to team results that leaders can influence.

Answer: The standard is clear but not ownable or evidently fair, and the reward is not controllable or clear. Dimensions are too narrow. Involve teams in setting targets, widen the measures and tie rewards to controllable team results.

Exam tips

In Section A, classification questions are all or nothing. Decide first whether the item is a result or a determinant, then choose the specific type.
In Section C, name the framework and apply it to the scenario facts. A list of textbook points earns few marks.
Always give measurable indicators with units, such as defects per 1,000 units or percentage of on-time deliveries.
When asked to evaluate, include at least one limitation, such as conflicting measures or manipulation, and finish with a recommendation.
Do not mix up the three frameworks. Fitzgerald has results and determinants, Building Block has three blocks, and the pyramid has four levels.

Practice questions from Performance analysis

Other Performance Frameworks and Non-Financial Indicators in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Other Performance Frameworks and Non-Financial Indicators: frequently asked questions

What is the difference between Fitzgerald and the Building Block model?

Fitzgerald classifies measures into results and determinants across six dimensions. The Building Block model uses those dimensions as its first block and adds standards and rewards. So the Building Block model also covers how targets are set and how staff are rewarded.

What are the six dimensions in the Building Block model?

They are competitiveness, financial performance, quality of service, flexibility, resource utilisation and innovation. The first two are results. The other four are determinants.

What is the Performance Pyramid used for?

It links corporate vision to day-to-day operations. Objectives pass down through business units, operating systems and departments. Measures pass back up. It shows how operational measures such as quality and cycle time support customer satisfaction and financial goals.

Give examples of non-financial performance indicators.

Examples are defect rate, on-time delivery percentage, customer complaints, staff turnover, customer retention, market share and machine downtime. In the exam, link each one to a goal and say how it is measured.