亨格瑞成本与管理会计（第16版） 课件Chapter 24Performance Measurement,Compensation,and Multinational Considerations

CostAccountingSeventeenthEdition,GlobalEditionChapter24PerformanceMeasurement,Compensation,andMultinationalConsiderationsCopyright©2021PearsonEducationLtd.LearningObjectives(1of2)24.1Selectfinancialandnonfinancialperformancemeasurestouseinabalancedscorecard24.2

Examineaccounting-basedmeasuresforevaluatingabusinessunit’sperformance,includingreturnoninvestment(ROI),residualincome(RI),andeconomicvalueadded(EVA®)24.3Analyzethekeymeasurementchoicesinthedesignofeachperformancemeasure24.4

StudythechoiceofperformancetargetsanddesignoffeedbackmechanismsLearningObjectives(2of2)24.5Indicatethedifficultiesthatoccurwhentheperformanceofdivisionsoperatingindifferentcountriesiscompared24.6Understandtherolesofsalariesandincentiveswhenrewardingmanagers24.7DescribethefourleversofcontrolandwhytheyarenecessaryFinancialandNonfinancialPerformanceMeasuresManyorganizationsrecordfinancialandnonfinancialperformancemeasuresfortheirsubunitsonabalancedscorecard.Thescorecardsofdifferentorganizationsemphasizedifferentmeasures,butthemeasuresarealwaysderivedfromacompany’sstrategy.ThefourbalancedscorecardperspectivesFinancialCustomerInternalbusinessprocessLearningandgrowthDesigningAccounting-BasedPerformanceMeasuresRequiresSeveralStepsChooseperformancemeasuresthatalignwiththefirm’sfinancialgoals.Choosethedetailsofeachperformancemeasureinstep1.Chooseatargetlevelofperformanceandafeedbackmechanismforeachperformancemeasureinstep1.Accounting-BasedMeasuresforBusinessUnitsReturnoninvestmentResidualincomeEconomicvalueaddedReturnonsales(Thismeasuredoesnotaccountforinvestment.)ReturnonInvestment(ROI)(1of3)ROIisanaccountingmeasureofincomedividedbyanaccountingmeasureofinvestment.ReturnonInvestment(ROI)(2of3)MostpopularmetricfortworeasonsBlendsalltheingredientsofprofitability(revenues,costs,andinvestment)intoasinglepercentageCanbecomparedwiththerateofreturnonopportunitieselsewhere,insideoroutsidethecompanyAlsocalledtheaccountingrateofreturn(ARR)ortheaccrualaccountingrateofreturn(AARR)ReturnonInvestment(ROI)(3of3)ROImaybedecomposedintoitstwocomponentsasfollows:ROI=ReturnonSalesxInvestmentTurnoverKnownastheDuPontMethodofProfitabilityAnalysisRecognizesthetwobasicingredientsinprofitmaking:IncreasingincomeperdollarofrevenueandUsingassetstogeneratemorerevenues.AnimprovementtoeitherwithnochangeintheotherwillincreaseROI.ResidualIncomeResidualIncome(RI)isanaccountingmeasureofincomeminusadollaramountforrequiredreturnonanaccountingmeasureofinvestment.RI=Income–(RRRxInvestment)RRR=RequiredRateofReturnRequiredrateofreturntimestheinvestmentistheimputedcostoftheinvestment.Theimputedcostoftheinvestmentisacostrecognizedinparticularsituationsbutnotrecordedinfinancialaccountingsystemsbecauseitisanopportunitycost.EconomicValueAdded(EVA)EconomicValueAdded(EVA)isavariationofRIusedbymanycompanies.Itiscalculatedasfollows:Weightedaveragecostofcapitalequalstheafter-taxaveragecostofalllong-termfundsinuse.EVAsubstitutesthefollowingnumbersintheRIcalculation:Income:After-taxoperatingincomeRequiredrateofreturn:(After-tax)weighted-averagecostofcapitalInvestment:TotalassetsminuscurrentliabilitiesReturnonSales(ROS)ReturnonSalesisalsoknownastheincome-to-revenuesratioorthesalesratio.Itisfrequentlyused,simpletocompute,andwidelyunderstood.Itdoesnottakeintoaccountinvestment.ItmeasureshoweffectivelycostsaremanagedItiscalculatedbytakingOperatingIncome/Revenuesandisexpressedasapercentage.ComparingPerformanceMeasuresUsingtheexampleofthehotelsfromourtextbook,weseetheresultsusingeachofourmethods(inparenthesesaretheranks):HOTELROIRIEVAROSSF24%(1)$120,000(2)$68,250(2)20%(2)CHICAGO15%(3)$60,000(3)$15,750(3)21%(1)NEWORLEANS17%(2)$150,000(1)$73,500(1)16%(3)ChoosingDetailsofthePerformanceMeasuresHowshouldeachmeasurebecomputed?Tobegin,severalquestionsshouldbeanswered:Whatisthetimehorizon?Whichdefinitionofinvestmentwillbeused?Howshallwecalculatevariouscomponentsofeachperformancemeasure,suchasthemeasurementofassets?Let’snowdiscusseachofthesemeasurementdetails.AlternativeTimeHorizonsAnimportantelementindesigningaccounting-basedperformancemeasuresischoosingthetimehorizonoftheperformancemeasures.Multipleperiodsofevaluationaresometimesappropriate.ROI,RI,EVA,andROSallrepresenttheresultsforasingleperiod,oftenayear.ROI,RI,EVA,andROSmayallbeadaptedtoevaluatemultipleperiodsoftimetoavoidactionsthatbenefittheshortruntothedetrimentofthelongrun.BenefitsofMultiyearAnalysisMultiyearanalysishasseveralbenefits:Benefitsofactionstakeninthecurrentperiodmaynotshowupinshort-runperformancemeasures.IfmanagersuseNPVforinvestmentdecisions,thenusingamultiyearRIforperformanceachievesgoalcongruence.Managersaremotivatedtotakealong-runperspectivebybeingcompensatedonchangesinmarketpricebecausestockpricesincorporatetheexpectedfutureeffectsofafirm’scurrentdecisions.AlternativeDefinitionsofInvestmentFourcommonalternativedefinitionsofinvestment:Totalassetsavailable—allassetsTotalassetsemployed—allassetslessidleassetsandassetspurchasedforfutureexpansionTotalassetsemployedminuscurrentliabilities—totalassetsemployedlessassetsfinancedbyshort-termcreditorsStockholder’sequity—liabilitiesassignedtosubunitsanddeductedfromtotalassetsAlternativeAssetMeasurements(1of2)PossiblealternativeassetmeasurementsCurrentcost—costofpurchasinganassettodayidenticaltotheonecurrentlyheldGrossvalueoffixedassets—historicalcostNetbookvalue(NBV)offixedassets—historicalcost(HistoricalcostisusedtocalculateROI,andthereisalwaysaquestionwhethertousegrossornetbookvalue.NBVisthemeasuremostcommonlyusedbycompaniesforinternalperformanceevaluation.)AlternativeAssetMeasurements(2of2)ProponentsofusingNBVasaninvestmentbasemaintainthatitislessconfusing:Itisconsistentwiththeamountoftotalassetsshownintheconventionalbalancesheet.Itisconsistentwithincomecomputationsthatincludedeductionsfordepreciationexpense.SurveysreportthattheNBVisthemeasureofassetsmostcommonlyusedbycompaniesforinternalperformanceevaluation.TargetLevelsofPerformanceandFeedbackChoosingtargetlevelsofperformanceEstablishtargetROIsusinghistorical-cost-basedmeasures.Setcontinuousimprovementtargets.Usebalancedscorecardstoestablishtargets.Choosingthetimingoffeedback(dependson)HowcriticaltheinformationisforthesuccessoftheorganizationThemanagementlevelreceivingfeedbackThesophisticationoftheorganization’sinformationtechnologyPerformanceMeasurementinMultinationalCompaniesMultinationalcompaniesfaceadditionaldifficulties.Theeconomic,legal,political,social,andculturalenvironmentsdiffersignificantlyacrosscountries.Importquotasandtariffsrangewidelyfromcountrytocountry.Availabilityofmaterialsandskilledlabor,aswellascostsofmaterials,labor,andinfrastructurealsodiffersignificantlyacrosscountries.Divisionsoperatingindifferentcountriesaccountfortheirperformanceindifferentcurrencies,andinflationandfluctuationinforeign-currencyexchangeratesaffectperformancemeasurement.CalculatingaForeignDivision’sROI—ForeignCurrencyorU.S.Dollars?Tocalculateforeigndivision’sROI,shouldcompaniesusetheforeigncurrencyorU.S.dollars?Whatexchangerateshouldbeused?Inareaswithhigherinflation,theinflationcloudstherealeconomicreturnsonanassetandmakeshistorical-cost-basedROIhigher.ThedifferentininflationbetweencountriesmakeadirectcomparisonofROImisleading.DistinguishingthePerformanceofManagersfromthePerformanceofTheirSubunitsTheperformanceevaluationofamanagershouldbedistinguishedfromtheperformanceevaluationofthatmanager’ssubunit,suchasadivisionofthecompany.Thereasonforthisistorecognizethatacompanymayputthemostskilleddivisionmanagerinchargeofthedivisionwiththepoorestreturninanefforttoimprovethatdivision,andthatmaytakeyears.TheTrade-Off:CreatingIncentivesVersusImposingRiskAninherenttrade-offexistsbetweencreatingincentivesandimposingrisk.Anincentiveshouldbesomerewardforperformance.Anincentivemaycreateanenvironmentinwhichsuboptimalbehaviormayoccur:Thegoalsofthefirmaresacrificedinordertomeetamanager’spersonalgoals.Themotivationforhavingsomesalaryandsomeperformance-basedcompensationistobalancethebenefitofincentivesagainsttheextracostofimposingriskonamanager.MoralHazardMoralhazarddescribesasituationinwhichanemployeepreferstoexertlesseffortcomparedwiththeefforttheownerdesiresbecausetheownercannotaccuratelymonitorandenforcetheemployee’seffort.IntensityofIncentives(1of2)Intensityofincentives—howlargetheincentivecomponentofamanager’scompensationshouldberelativetotheirsalarycomponentPreferredperformancemeasuresarethosethataresensitivetoorthatchangesignificantlywiththemanager’sperformance.Theydonotchangemuchwithchangesinfactorsthatarebeyondthemanager’scontrol.Sensitiveperformancemeasuresmotivatethemanagerandlimitthemanager’sexposuretorisk,reducingthecostofprovidingincentives.IntensityofIncentives(2of2)Thetrade-offbetweenconsiderationsofsensitivityandriskontheonehandandthecongruenceofgoalsontheotherdeterminestheeffectiveintensityofincentivesplacedoneachmeasureofperformance.Therelativeweightplacedonthevariousmeasuresinthescorecardisideallyaimedatachievingcongruencebetweentheextenttowhichthemanagerismotivatedtomaximizeeachperformancemetricandthatmeasure’simportanceingeneratingthelong-runobjectivethefirmwishestoachieve.BenchmarksandRelativePerformanceEvaluationBenchmarksaremetricsthatcorrespondtothebestpracticesoforganizationsandmaybeavailableinsideoroutsideoftheorganization.Benchmarking,whichisalsocalledrelativeperformanceevaluation,filtersouttheeffectsofthecommonuncontrollablefactors.PerformanceMeasuresattheIndividualActivityLevelManagersneedtodotwothingswhendesigningthemeasuresusedtoevaluateperformanceofindividualemployees:Designperformancemeasuresforactivitiesthatrequiremultipletasks.Designperformancemeasuresforactivitiesdoneinteams.CompensationforMultipleTasksandTeam-BasedActivitiesEmployerswantemployeestoallocatetheirtimeandeffortintelligentlyamongvarioustasksoraspectsoftheirjobs.Ateamachievesbetterresultsthanindividualemployeesactingalone.

Manycompaniesrewardemployeesonteamsbasedonhowwelltheirteamperforms.Team-basedincentivesencourageindividualstohelponeanotherastheystrivetowardacommongoal.ExecutivePerformanceMeasuresandCompensationPlansBasedonbothfinancialandnonfinancialperformancemeasureandincludeamixofBasesalaryAnnualincentives,suchascashbonusesLong-runincentives,suchasstockoptionsWell-designedplansuseacompensationmixthatbalancesrisk(theeffectofuncontrollablefactorsontheperformancemeasure,andhencecompensation)withshort-runandlong-runincentivestoachievethefirm’sgoals.StrategyandLeversofControl(1of2)Performanceevaluationmeasureshelpmanagerstracktheirprogresstowardachievingacompany’sstrategicgoals.Becausethesemeasureshelpdiagnosewhetheracompanyisperformingtoexpectations,theyarecollectivelycalleddiagnosticcontrolsystems.Companiesmotivatemanagersbyholdingthemaccountableandrewardingthemformeetinggoals.StrategyandLeversofControl(2of2)Topreventunethicalandoutrightfraudulentbehavior,companiesbalancethepushforperformance(resultingfromdiagnosticcontrolsystems