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ACCA Strategic Professional · Advanced Performance Management · Technology and information systems

Arden Logistics bases its managers' quarterly bonus on an on-time delivery KPI drawn from a telematics feed. An internal review finds that some depots manually edit delivery timestamps before the feed is loaded, and there are no access logs. What is the most significant consequence for the performance and reward system?

Bonuses may be paid on manipulated, unreliable data. Unlogged manual edits destroy data integrity, and tying rewards to the KPI gives depot managers an incentive to alter timestamps, producing dysfunctional behaviour and a reward scheme that no longer reflects genuine delivery performance.

  1. AThe KPI becomes more timely but less comparable
  2. BBonuses may be paid on manipulated, unreliable data, weakening the integrity of the reward system and encouraging dysfunctional behaviourCorrect
  3. CThe cost of data storage will rise sharply
  4. DBudget slack will automatically disappear

Explanation

Manual edits without audit trails undermine data integrity, so the KPI cannot be relied upon. Linking pay to it gives managers an incentive to manipulate it. Storage cost and budget slack are unrelated to the weakness described, and timeliness is not improved by tampering.

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