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ACCA Strategic Professional · Advanced Performance Management · Performance hierarchy

Orion Logistics uses the KPI 'percentage of deliveries made on time'. Managers of depots have started to reclassify late deliveries as 'customer-requested delays' to hit the 96% target, although customer complaints are rising. Which weakness of KPIs does this behaviour most clearly illustrate?

This illustrates measure fixation and manipulation: managers pursue the reported KPI figure by reclassifying late deliveries instead of improving real service. The target is met on paper while customer complaints rise, showing the KPI no longer reflects the underlying objective it was designed to monitor.

  1. AMeasure fixation and manipulation, where managers focus on achieving the reported figure rather than the underlying objectiveCorrect
  2. BTime lag, because the KPI reports results too late to be useful
  3. CExcessive aggregation, because depot results are combined into one group figure
  4. DLack of benchmarking, because there is no external comparison

Explanation

Managers are gaming the measure, reclassifying data to meet the target while the real objective (customer service) deteriorates. This is measure fixation or manipulation. Time lag and aggregation are not what is described, and benchmarking is not the issue.

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