Managerial Accounting

Sara Anderson says that she is a busy woman with no time to look at favorable variances. Instead, she concentrates solely on the unfavorable ones. She says that favorable variances imply that employees are doing better than expected and need only quick congratulations. In contrast, unfavorable variances indicate that change is needed to get the substandard performance up to par. Do you agree? Explain. Would there ever be a situation where a "favorable" variance would be a bad thing?