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

Which statement correctly describes the scope of performance management in an organisation?

Performance management covers the organisation, divisions, teams and individuals, and links strategy to targets, measurement, feedback and improvement. It is not confined to HR appraisals, financial budgeting or top management, because it is an integrated, organisation-wide process involving many functions.

  1. AIt covers only individual employee appraisal handled by the HR department
  2. BIt covers organisational, divisional, team and individual levels, linking strategy to measurement, feedback and improvementCorrect
  3. CIt is limited to financial budgeting and variance reporting by the finance team
  4. DIt applies only to the top management and the board

Explanation

Performance management is a broad, integrated process spanning all levels and functions, connecting strategy with targets, measurement, feedback and action. Limiting it to HR appraisal, budgeting or top management misses its organisation-wide scope.

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