Group 5

Performance Appraisal &

JESSICA C. CABALLES
Quality Management RETCHARD JOI Q. RAMAL
DOMINIC TRENT D. VILLALUZ
ELEC/MBA 212-Managerial Accounting ROJAY M. GEROMO
I. TOPICS
Following are the subjects that will be explored.

• Residual Income • Cost of Nonconformance

Approach and Quality Issues
• Balance Scorecard • Just-in -Time
• Operating Performance manufacturing
Measures • Kaizen Costing
• Benchmarking
• Dupont Model
Performance evaluation -(appraisal, measurement)

 Is a matter of control that could be done

before, during or after process. Performance is
assessed based on reports submitted to and
gathered by the manager.
Residual Income Approach
is the net operating income that an
investment center earns above the
minimum required return on its operating
assets.
Objective of RIA

maximize the total

amount of residual
income or EVA, not to
maximize ROI
 Motivation and Residual Income
encourages managers to make
investments that are profitable for the
entire company but that would be
rejected by managers who are
evaluated using the ROI formula.
Illustration:
Ketchikan Division is considering purchasing a computerized
diagnostic machine to aid in servicing marine diesel engines.

 machine cost $25,000

 expected to generate additional operating income
$4,500 a year
 rate of return 18% ($4,500 ÷ $25,000)
Balanced Scorecard
 Balanced Scorecard

balanced scorecard consists of an integrated set of

performance measures that are derived from and
support a company’s strategy.

A strategy is essentially a theory

about how to achieve the
organization’s goals.
 Balanced Scorecard

Southwest Airlines ’ strategy is to offer an

balanced scorecard consists of an integrated set of
operational excellence customer value proposition
performance measures that are derived from and
that has three key components—low ticket prices,
support a company’s strategy.
convenience, and reliability.
A strategy is essentially a theory
Under the balanced scorecard approach, top
about how to achieve the
management translates its strategy intogoals.
organization’s performance
measures that employees can understand and influence.
 Balanced
Scorecard

Common
Characteristics
of
Balanced
Scorecards
Points to remember in selecting performance
measures for balanced scorecard:
 THANK
YOU!
Jessica
Presenter
Caballes

ELEC/MBA 212-Managerial Accounting