Bitluns is a holiday company, that operates more than 100 all-inclusive resorts. The performance of the manager of each resort is evaluated using financial measures.

Many of the resort managers are not very happy, because their profit reports, that they are assessed on, include a share of head office costs and other costs that they cannot control.

Use the words and phrases in the table provided below to complete the following paragraphs:

Uncontrollable costs may be included in the performance report of a ______________ centre so that the report shows the final ______________ of that centre. This is sometimes done to make the manager aware of the other ______________ involved in running the business.
However, from a performance measurement perspective, if it is the ______________ of the manager that is being measured, then it is ______________ to measure their performance on results that include items that are beyond their ______________.
The solution to this is to include the ______________ items in a separate section of the report, and to measure the manager's performance based only on the ______________ items.

Transcribed Image Text:

controllable costs unfair control performance profit uncontrollable fair responsibility