- This topic has 1 reply, 2 voices, and was last updated 4 years ago by .
Viewing 2 posts - 1 through 2 (of 2 total)
Viewing 2 posts - 1 through 2 (of 2 total)
- You must be logged in to reply to this topic.
Interactive BPP books for June 2026 exams, recommended by OpenTuition.
Get discount code >>
Forums › ACCA Forums › ACCA FM Financial Management Forums › ROCE / dysfunctional ??
Can someone wxplain why using ROCE to evaluate projects is dysfunctional behaviour encouraged by performance related pay?
Performance related pay might encourage dysfunctional behaviour because the managers might manipulate the profits so as to show more profit in the current year. This would result in them getting more pay if their pay is dependent on the level of profits.
I do explain this in my free lectures on divisional performance.
