At Always Round Tire, Managers and Professional Employees Are Evaluated

question 8

Essay

At Always Round Tire, managers and professional employees are evaluated each year with the Subjective Information Performance Survey (SIPS). SIPS allows bosses to rank their employees on several issues including achieving budget objectives, communication quality, continuing education and training activities, and emphasis of teamwork among subordinates. SIPS software computes means and standard deviations, and benchmarks each employee relative to all others in the same evaluation system. But nobody at the company believes in SIPS output. Why?

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Definitions:

Fixed Overhead

The total non-variable costs associated with operating a business, including rent, salaries, and insurance, that remain unchanged regardless of the level of production or sales.

Direct Labor

The wages and other forms of remuneration paid to employees who directly work on the products being manufactured, such as assembly line workers.

Property, Plant, and Equipment

Long-term tangible assets used in the operation of a business, such as buildings, machinery, and equipment.

Raw Material

Basic materials used in the production process, which are transformed into finished goods through the manufacturing process.