Problem 1. Rewards for performance can be based on current performance results (short-term) or future performance results (long-term). List one advantage and one disadvantage of both and give example of each.
Problem 2. Should the bank manager of ACB bank be evaluated based on the performance of the manager?s branch bank alone, or only on the performance of the bank as a whole, or both? Explain
Problem 3. Discuss the advantages and disadvantages of basing rewards on a fixed formula (i.e. for each percentage point by which deposit growth exceeds 5 percent, the manager would receive a bonus of 10% of the manager?s base salary) and subjective manner? Using ACB as an example, identify when one method (fixed formula or subjective) may be more appropriate.
Problem 4. Assume you are a consultant advising ACB on their incentive compensation plan. Your interviews with branch and department managers inform you that employees are satisfied with the new balanced scorecard performance management system, but feel they are not rewarded for performing well. At the end of each year, most employees receive annual salary increases between 3 and 5 percent. Promotions are based on seniority?the longer you are in your job, the better your chances for promotion. Do the interview responses signal a potential problem? If so, what do you recommend that ACB do?
Problem 5. Develop a student grading model for an accounting class using the Balanced Scorecard concepts.