CBC Performance Measurement & KPIs 3 — Questions and Answers
Question 1: Which perspective is NOT one of the four in Kaplan and Norton's Balanced Scorecard?
- Competitor benchmarking (Correct answer)
- Financial
- Customer
- Learning and growth
Correct answer: Competitor benchmarking
The Balanced Scorecard uses financial, customer, internal process, and learning and growth perspectives, not competitor benchmarking.
Question 2: A client sets a KPI target of "increase repeat purchase rate from 18% to 25% within six months." Which SMART element is most clearly demonstrated?
- Time-bound specificity with a measurable target (Correct answer)
- Ambiguity that allows flexible interpretation
- Reliance on qualitative judgment
- An open-ended horizon with no deadline
Correct answer: Time-bound specificity with a measurable target
The target states a precise metric, values, and deadline, satisfying the specific, measurable, and time-bound criteria.
Question 3: During a quarterly review, a coach helps a client compare KPI results against industry averages. This practice is called what?
- Benchmarking (Correct answer)
- Forecasting
- Auditing
- Budget variance analysis
Correct answer: Benchmarking
Benchmarking compares an organization's performance metrics against industry standards or peers.
Question 4: A service business wants one KPI that captures long-term customer relationship value. Which is most appropriate?
- Customer lifetime value (CLV) (Correct answer)
- Daily website sessions
- Monthly office expenses
- Number of social media followers
Correct answer: Customer lifetime value (CLV)
CLV estimates total revenue a customer generates over the entire relationship, capturing long-term value.
Question 5: A coach's client reviews KPIs only once a year. What is the main risk of this cadence?
- Problems are detected too late to make timely corrective adjustments (Correct answer)
- The KPIs become too accurate over time
- Annual reviews always violate accounting standards
- Employees will collect too much data
Correct answer: Problems are detected too late to make timely corrective adjustments
Infrequent KPI review delays detection of negative trends, preventing timely course correction.
Question 6: Which scenario best describes a lagging indicator?
- Quarterly net profit reported after the period closes (Correct answer)
- Weekly number of sales proposals sent
- Daily count of new leads entering the pipeline
- Hours of employee training scheduled next month
Correct answer: Quarterly net profit reported after the period closes
Lagging indicators, like reported profit, confirm outcomes after they have already occurred.
Question 7: A coaching client wants to measure employee engagement's impact on performance. Which pairing is most logical?
- Engagement survey scores tracked alongside staff turnover rate (Correct answer)
- Office square footage tracked alongside utility bills
- Website bounce rate tracked alongside ad spend
- Inventory levels tracked alongside shipping costs
Correct answer: Engagement survey scores tracked alongside staff turnover rate
Pairing engagement scores with turnover connects a people-focused leading measure to a related business outcome.
CBC Performance Measurement & KPIs 3
Which perspective is NOT one of the four in Kaplan and Norton's Balanced Scorecard?