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Management Accounting Techniques and decisions - Essay Example

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Management Accounting Techniques and decisions

The aspect of erasing the salary part improves the wholesome performance of the managers with the development of workplace initiatives, team work, adaptability, compliance to business policies thereby resulting in increase of the production and the service levels of the organization. The incentives are often linked in the right way to the performance measures with appropriate weight-ages to the several benchmarks of performance measurement (Marr and Gray, 2012, p.68). The manager’s ability to meet the benchmark standards determine the rewards and the compensation that are received by them. The higher the achievements of the manager in comparison to the benchmark standards, the higher the rewards the managers should be eligible to receive. The benchmarks are set in the various areas of operation of the organization in order to fulfil its organizational objectives. These areas which include benchmark standards of performance of the employees are aimed at fulfilling the financial goals of the company, the customer service, the standards of the internal processes and the learning goals of the organization (Tonchia and Quagini, 2010, p.78). The financial benchmarks of the manager’s performance indicates the desired output from the managers that would contribute to the attainment of certain production volumes in line with the quality standards to be maintained for the products. Thus the benchmarks help in assessing the extent to which the manager has been able to contribute to the production volumes of the company and at the same time maintained the quality of production (Niven, 2010, p.34). The use of benchmarks in measuring the performance helps to identify the short cut approaches adopted by the employees which is aimed at fulfilling the short term goals but do not fulfil the organizational objectives. The benchmark system helps to understand whether the performance of the managers has been up to the mark in all aspects of the manager’s performance, like in this case both product quantity as well as quality. The benchmarks set in the area of customer service is also important to measure the performance of the managers as this is also an important area considered for the sustainability of the business of the organizations. The various benchmarks in the area of performance measures for customer service includes the turn-around time to the customers, the number of complaints that have been lodged by the customers, the time taken for the resolution of complaints by the manager. These benchmarks help to measure the extent to which the manager has been able to respond to the customer requests which is determined the turnaround time. The compromise of any one of the performance measures may lead to complaints from the customer. The benchmarks determine the rate at which complaints have been filed against the work of the managers and thus indicate the gaps with the benchmark standards of performance. The benchmark system also provides an insight on the effectives of the manager in resolution of customer complaints. The inputs received from the ...Show more

Summary

Management Accounting Techniques and decisions Contents Role of benchmarking in evaluating manager’s performance 3 Budgetary planning and control systems: impacts on business performance 5 References 8 Role of benchmarking in evaluating manager’s performance The statement that manager’s should be rewarded only on the basis of performance and that there should be no salary underlines the fact that the compensation structure of the managers need to be rightly linked to the performance measures designed by the company in order to achieve balanced productivity and a sustainable business which is in line with the policies and the mission statement of the organization…
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