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ACCA Strategic Professional · Advanced Performance Management · Performance optimisation in specific contexts

Clearview Legal LLP bills clients by the hour and rewards partners mainly on billable hours. Clients complain about slow case progress and rising bills. Which is the most likely behavioural effect of this reward measure?

Partners are likely to prolong work to maximise billable hours, which harms efficiency and client value. A reward based on hours is an input measure that pays for activity rather than results, which fits the complaints about slow progress and rising bills.

  1. APartners are encouraged to prolong work to increase hours, undermining efficiency and client valueCorrect
  2. BPartners focus on reducing the time spent on each case to lift client satisfaction
  3. CPartners invest more in staff training to improve quality
  4. DPartners reduce hours worked to avoid overstating the output

Explanation

A reward tied to billable hours is an input or activity measure that creates an incentive to maximise hours, not outcomes. This promotes inefficiency and short-term focus, matching the complaints. Reduced time per case would be rewarded only if the measure were based on outcomes or efficiency.

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