Question

Nonfinancial performance measures:

A. Are rarely used to evaluate overall efficiency.
B. Allow managers to make informed tradeoffs.
C. Are usually used in combination with financial measures for control purposes.
D. Are often the sole basis of a manager's performance evaluation.

Answer 1

Nonfinancial performance measures allow managers to make informed decisions (B) and are typically used alongside financial measures for comprehensive evaluations (C), not often being the sole basis of these evaluations (D).

Step-by-step explanation:

Nonfinancial performance measures are increasingly important in modern performance appraisals, serving a critical role alongside financial metrics. These measures allow for a more comprehensive evaluation of a manager's performance and overall company operations.

Nonfinancial performance measures allow managers to make informed tradeoffs (B), recognizing the importance of elements such as customer satisfaction, process improvement, innovation, and employee engagement.

While nonfinancial measures are important, they are rarely the sole basis of a manager's performance evaluation (D), as financial metrics remain an integral part of assessing a company's success. However, by integrating both financial and nonfinancial data, organizations can gain a more accurate picture of their performance and guide their strategic decisions accordingly.