The Effective Evaluation of Managers' Performance Depends on Both Human

question 5

Essay

The effective evaluation of managers' performance depends on both human factors and company policies. Using variances from standard costs in a manager's performance report adds accuracy to the evaluation process. To ensure effectiveness and fairness when setting up a performance evaluation process, what actions should be taken?

---

Definitions:

Monopsony Power

Buyer’s ability to affect the price of a good.

Marginal Expenditure

The additional cost incurred from purchasing one more unit of a good or service.

Average Expenditure

Average expenditure is the amount of money spent per unit of goods or services purchased, calculated by dividing total expenditure by the total number of units bought.

Competitive Quantity

is the quantity of goods produced or services offered based on the equilibrium in a competitive market.