In this video tutorial, accounting professor Kay Stice explains if there is a conflict between the mission statement and a key performance indicator that is used to evaluate employees, then the employees will ignore the mission statement and only pay attention to the KPI. Be cautious when crafting the mission statement and KPIs to ensure that employees don't ignore the mission statement.
- In addition to measuring the percentage of customers…who must wait longer than 15 minutes…the optometrist has now instructed her accountants…to track the following for each staff person…who does patient consultations.…Average gross revenue per customer visit,…including both the fee for the visit…and the billing price for the eyeglasses…or contacts ordered.…Well, let's consider what problems…might be caused by this measure.…Remember that the new mission statement…contains an emphasis on quality,…service, and lifetime relationships.…In fact, the mission statement contains this clause,…"respectful disclosure and consultation…"in terms of options and costs."…Well, I'm sure that they optometrist…will have nice copies of the mission statement…professionally printed, framed, and hung…in each of the examinations rooms…as well as out in the patient waiting room.…
But how can employees be expected…to take this noble mission statement seriously…when their performance evaluation is based…on how much money they can squeeze out of every customer.…
In this course, accounting professors Jim and Kay Stice explain what KPIs your business should consider in a balanced scorecard, from financial goals to employee and customer satisfaction. They describe how to craft a clear mission statement that complements your KPIs, and how to tie performance to incentives. Plus, get a look at KPIs in action, as Jim and Kay break down a case study examining a trucking company's balanced scorecard.
- The importance of KPIs and measuring performance
- Financial goals and measure
- Customer needs and satisfaction
- Employee growth
- Creating an effective mission statement
- Linking measurements and rewards
- Examining a KPI case study