Variance analysis receives some criticism as a performance measure. What about other measures such as ROI and EVA?
Do research on the Internet and show the reference for the information. Remember to respond to a colleague's posting also.
Professor's Note: Variance analysis compares actual performance to budgeted performance in the areas of material, labor, and overheads. If the results of a business unit show all positive variances, should the manager be rewarded for (excellent) performance? A simple counter argument can be - what if the manager had padded his business unit's budget?
In addition to searching the Internet for text related to this discussion, watch the following YouTube videos (click on the following links to access these videos) and post your comments.
https://www.youtube.com/watch?v=M8igsXklfb4 Video 1: Performance Management & Evaluation
https://www.youtube.com/watch?v=omUoKnhuqvY Video 2: Return on Investment - ROI
https://www.youtube.com/watch?v=4UMUJkIPA-4&feature=related Video 3: Economic Value Added - EVA