The emphasis on variance analysis and its use in performance evaluation must be such that:
A) managers focus on setting easy to attain targets
B) larger unfavorable variances should result in negative consequences for personnel held accountable
C) management should set targets that challenge but are reasonably achievable and require creativity and resourcefulness by personnel held accountable
D) Management should stretch resources to meet goals even if continuous improvement and quality suffers

Question

Quizplus · Accepted Answer

Setting easy to attain targets (choice A) does not challenge or motivate personnel, while punishing larger unfavorable variances (choice B) can create a negative and stressful work environment. Management should set reasonably achievable and challenging targets that require creativity and resourcefulness from personnel (choice C). Stretching resources to meet goals (choice D) can compromise quality and overall performance.

The Emphasis on Variance Analysis and Its Use in Performance