Question

Exelont Corporation is a large-scale manufacturer of consumer electronics. As part of its performance management system, Exelont measures the amount each employee contributes to the profits of the company, and the employees are either held accountable or rewarded based on their contributions. With regard to performance measurement, under which of the following would contribution to profits be categorized?

Group of answer choices
a. behavioral observation scales (BOSs)
b. key risk indicators (KRIs)
c. non-performing assets (NPAs)
d. critical success factors (CSFs)

Answer 1

Contribution to profits at Exelont Corporation is categorized as critical success factors (CSFs), as they are vital aspects of performance measurement that affect the company's success and employee rewards. The correct answer is option d.

Step-by-step explanation:

In the context of Exelont Corporation, which uses a performance management system to measure how employees contribute to profits, several frameworks could be relevant. However, when considering which category the measurement of contribution to profits falls under, the most fitting is critical success factors (CSFs). CSFs are key areas that must be managed successfully to achieve desired business outcomes and are commonly used in performance measurement contexts. In this case, the profit contributions by each employee are pivotal for the organization's success, and therefore, it's a critical factor in assessing performance.

Linking profits and earnings distributed among employees to individual contributions can motivate personnel, align their goals with the organization's targets, and improve productivity. Job satisfaction may also rise as employees see the direct results of their efforts on the company's success. The effectiveness of such approaches is validated by research, like the 2003 study by Arthur et al., which found a clear link between training, productivity, and profits, further highlighting the relationship between employee development, satisfaction, and organizational success.