ACCA Applied Skills · Performance Management · Specific performance analysis issues in not-for-profit organisations and the public sector
A government agency is judged on the percentage of benefit claims processed within 10 days. Managers begin to prioritise simple claims and leave complex ones unprocessed for months. Which problem with performance measurement does this best illustrate?
This is measure fixation: managers concentrate on hitting the quantified target, the 10-day processing percentage, while neglecting the underlying objective of serving all claimants, because difficult claims are left unprocessed to protect the reported figure.
- AGoal congruence being improved through a balanced scorecard
- BShort-termism arising from capital budgeting
- CMeasure fixation, where behaviour is distorted to achieve the target measureCorrect
- DBenchmarking against a private sector competitor
Explanation
Measure fixation occurs when managers focus on achieving the measured indicator at the expense of the real objective. Here complex claims are neglected to hit the 10-day target. The other options do not describe this behavioural distortion.
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