The Relative Performance Evaluation Approach Advocated by the Beyond Budgeting

question 1

Multiple Choice

The relative performance evaluation approach advocated by the Beyond Budgeting philosophy means employees' performance is evaluated against:

• A) their own past performance
• B) peer performance
• C) yardsticks established by top management
• D) all of the above

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Definitions:

Human Capital

The abilities, learned knowledge, and lived experiences of a person or collective, regarded with respect to their financial value or expenditure to a business or state.

Physical Capital

Assets used by a business to produce goods and services, such as buildings, machinery, and equipment.

Diminishing Returns

A principle stating that as investment in a single area increases, the rate of profit from that investment, after a certain point, cannot continue to increase if other inputs remain constant.

Marginal Product

The additional output generated by employing one more unit of a particular input, holding all other inputs constant.