Performance Metrics Flashcards

A business coach wants to measure whether a client's team is improving output relative to hours worked. Which metric is most appropriate?

Answer: Labor productivity ratio

Labor productivity compares output produced to labor hours invested, directly measuring efficiency gains.

Which characteristic distinguishes a leading indicator from a lagging indicator in coaching engagements?

Answer: It predicts future performance rather than confirming past results

Leading indicators forecast future outcomes, while lagging indicators confirm what has already happened.

A client's sales rose 20% but net profit fell. Which metric should the coach examine first to diagnose the disconnect?

Answer: Operating expense ratio

Rising costs relative to revenue, shown by the operating expense ratio, commonly erode profit despite sales growth.

In the SMART framework for goal setting, what does the 'M' require of a performance goal?

Answer: It must be measurable with quantifiable criteria

The 'M' in SMART stands for Measurable, requiring quantifiable criteria to track progress.

A coaching client tracks 45 different KPIs and feels overwhelmed. What is the best coaching recommendation?

Answer: Prioritize a small set of critical KPIs aligned to strategic goals

Effective performance management focuses on a limited number of KPIs directly tied to strategic objectives.

Which formula correctly calculates return on investment (ROI) for a coaching program?

Answer: (Net benefits minus program cost) divided by program cost, times 100

ROI equals net gain from the investment divided by its cost, expressed as a percentage.

A coach benchmarks a client's inventory turnover against industry averages. This practice is called what?

Answer: External benchmarking

Comparing a company's metrics to industry peers is external (competitive) benchmarking.