Page 223 - DMGT514_MANAGEMENT_CONTROL_SYSTEMS

Management Control Systems

Notes (b) Bonuses
(c) Benefits
(d) Perquisites
(ii) Psychological and Social Rewards:

(a) Promotion possibilities
(b) Increased responsibilities
(c) Increased autonomy
(d) Better geographical location

(e) Recognition
2. Size of bonus relative to salary:
(i) Business unit profits
(ii) Lower cut-offs

3. Bonus based on:
(i) Business unit profits
(ii) Company Profits
(iii) Combination of the two

4. Performance criteria:
(i) Financial criteria
(a) Contribution margin
(b) Direct business unit profit

(c) Controllable business unit profit
(d) Income before taxes
(e) Net income after tax
(f) Return on investment

(g) Economic value added
(ii) Time period
(a) Annual financial performance
(b) Multi-year financial performance

(iii) Non-financial criteria
(a) Sales growth
(b) Market share
(c) Customer satisfaction

(d) Quality
(e) New product development

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