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ACCA Strategic Professional · Advanced Performance Management · Non-financial performance measurement

Halden Retail has set a store-level target of reducing staff turnover from 30% to 20%. The HR director notes that stores can hit the target by not hiring seasonal workers and by moving poor performers to other stores before year-end. Employees in a pilot store also report that they cannot influence turnover because pay bands are set centrally. Which combination of design weaknesses is present?

The measure suffers from poor controllability and manipulation risk. Store managers cannot influence pay bands set centrally, a key driver of leavers, and they can hit the target by avoiding seasonal hires or moving poor performers. A well-designed measure should be controllable and resistant to gaming.

  1. ALack of controllability and susceptibility to manipulationCorrect
  2. BLack of quantification and excessive timeliness
  3. CExcessive number of measures and lack of benchmarking
  4. DShort-termism and lack of ownership by the board

Explanation

Managers can manipulate the figure by redefining who counts as turnover, and store managers cannot control pay bands, a main driver of leavers. So the measure suffers from manipulation risk and poor controllability. It is clearly quantified and no evidence of too many measures or board disengagement is given.

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