Performance Measurement & KPIs Flashcards

Which perspective is NOT one of the four in Kaplan and Norton's Balanced Scorecard?

Answer: Competitor benchmarking

The Balanced Scorecard uses financial, customer, internal process, and learning and growth perspectives, not competitor benchmarking.

A client sets a KPI target of "increase repeat purchase rate from 18% to 25% within six months." Which SMART element is most clearly demonstrated?

Answer: Time-bound specificity with a measurable target

The target states a precise metric, values, and deadline, satisfying the specific, measurable, and time-bound criteria.

During a quarterly review, a coach helps a client compare KPI results against industry averages. This practice is called what?

Answer: Benchmarking

Benchmarking compares an organization's performance metrics against industry standards or peers.

A service business wants one KPI that captures long-term customer relationship value. Which is most appropriate?

Answer: Customer lifetime value (CLV)

CLV estimates total revenue a customer generates over the entire relationship, capturing long-term value.

A coach's client reviews KPIs only once a year. What is the main risk of this cadence?

Answer: Problems are detected too late to make timely corrective adjustments

Infrequent KPI review delays detection of negative trends, preventing timely course correction.

Which scenario best describes a lagging indicator?

Answer: Quarterly net profit reported after the period closes

Lagging indicators, like reported profit, confirm outcomes after they have already occurred.

A coaching client wants to measure employee engagement's impact on performance. Which pairing is most logical?

Answer: Engagement survey scores tracked alongside staff turnover rate

Pairing engagement scores with turnover connects a people-focused leading measure to a related business outcome.