Performance Management & Metrics Flashcards
7 cards from real CSM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Performance Management & Metrics flashcards as text
A company's return on investment (ROI) for a new product line is 25%. What does this indicate?
Answer: The product line generates $0.25 in profit for every $1 invested
ROI of 25% means the investment yields $0.25 in net profit for each $1 invested, measuring financial efficiency.
Which metric best measures how efficiently a company converts revenue into actual profit after all expenses?
Answer: Net profit margin
Net profit margin measures the percentage of revenue remaining as profit after all costs, taxes, and expenses are deducted.
What is the primary purpose of a performance dashboard in strategic management?
Answer: To provide real-time visibility into KPIs aligned with strategic goals
Dashboards consolidate real-time KPI data so managers can monitor strategic progress and respond quickly to deviations.
An organization sets a target of reducing customer churn by 10% within 12 months. This is an example of which type of objective?
Answer: Lagging indicator target
Customer churn is a lagging indicator because it reflects the outcome of past actions rather than predicting future performance.
Which approach to performance measurement emphasizes comparing a firm's metrics against industry best practices?
Answer: Benchmarking
Benchmarking involves comparing organizational performance metrics against industry leaders or best-practice standards to identify improvement gaps.
A strategic manager notices that employee productivity has declined despite increased training investment. Which metric would BEST diagnose this disconnect?
Answer: Revenue per employee
Revenue per employee directly measures labor productivity output, revealing whether increased training investment is translating into productive results.
In the context of OKRs (Objectives and Key Results), what role do Key Results play?
Answer: They are measurable outcomes that indicate progress toward the objective
Key Results are specific, measurable milestones that signal whether an objective is being achieved within a defined timeframe.