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CMA Final · Strategic Performance Management and Business Valuation · Introduction to Performance Management

Vistara Textiles Ltd is redesigning its performance management system. The Board wants every unit's targets to be derived from corporate strategy, reviewed through the year, and linked to corrective action and development, rather than being used only to decide annual bonuses. Which feature of performance management does this requirement chiefly emphasise?

The requirement emphasises performance management as a continuous cycle of planning, monitoring, reviewing and improving, which connects corporate strategy to operational targets and corrective action. It is wider than bonus-linked appraisal, historical financial reporting, individual ratings or a single annual budget.

  1. ATreating performance management as a continuous cycle of planning, monitoring, reviewing and improving that links strategy to operationsCorrect
  2. BLimiting measurement to historical financial statements so that results remain objective and auditable
  3. CRestricting the system to individual employee rating, with no role for unit or organisational performance
  4. DReplacing all targets with a single annual budget approved at the start of the year

Explanation

The Board wants strategy-derived targets, in-year review, corrective action and development. That describes a continuous cycle linking strategy to operations. Limiting to historical financials, individual-only rating, or a single fixed budget each ignores the strategic, forward-looking and organisation-wide scope described.

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