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Division Performance vs Manager Performance

This topic has 1 reply, 2 voices, and was last updated 3 years ago by John Moffat.

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October 3, 2021 at 4:28 pm #636928
Imran.Sajjad
Participant
- Topics: 26
- Replies: 8
Is it true that:
1) Is it correct that to measure the performance of the division we have to calculate the division’s current ROI (without new investment) and compare it with the company’s Target ROI to see the division is doing good or not with the capital investment in a machine is being profitable or not?
2) However to calculate the manager’s performance we have to measure it with the new investment that the manager is considering to be made in a new machine.
TO measure the performance of a divisional manager we have to calculate the division’s current ROI (without new investment) and compare it with the New ROI (with new investment) to see whether the manager is doing good or not with the capital investment in a new machine is being profitable or not?
October 4, 2021 at 8:32 am #636949
John Moffat
Keymaster
- Topics: 57
- Replies: 54655
1. It depends whether the company wants to measure the performance using the ROI or RI.
2. Yes, but only the controllable profit.
Yes, unless RI is being used to measure the performance.
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