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

Which statement best describes performance management as distinct from a once-a-year performance appraisal?

Performance management is a continuous, integrated process linking strategy to goals, monitoring, feedback and improvement across organisation, team and individual levels. An annual appraisal is just one component, so describing it as a year-end rating for increments captures only a narrow part of the concept.

  1. AA continuous, integrated process that links strategy, goal setting, monitoring, feedback and improvement at organisational, team and individual levelsCorrect
  2. BA year-end review in which a manager rates employees to decide increments
  3. CA statutory audit of financial results carried out after the close of the financial year
  4. DA budgeting exercise that fixes cost ceilings for each department

Explanation

Performance management is an ongoing cycle that cascades strategy into objectives, tracks progress, gives feedback and drives improvement. An annual appraisal is only one event within that cycle, so the year-end rating option describes a part rather than the whole.

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