PERFORMANCE MEASUREMENT TAA's overall financial performance is currently assessed mainly in relation to a ROCE target of 10% per annum, which is not currently being achieved. The director and key managers participate in a bonus scheme that rewards them when TAA achieves the target ROCE of 10%. Some doubts have been expressed about whether ROCE is the appropriate measure for monitoring financial performance given TAA's objectives and strategies. Some staff have also asked whether the 10% target is too high, given the eco-tourism nature of the business. Clearly, the bonus system is not going to be very effective for motivating staff if the target ROCE is believed to be unachievable. Tianna receives a considerable amount of data each month. This includes financial data from Mateo, such as income statements, balance sheets and cash flow statements for TAA as a whole. Mateo also produces a monthly analysis of variances between budget and actual and a whole page full of financial ratios, most of which Tianna does not really understand. Aria produces some customer-related statistics such as sales growth and market share figures. Other managers produce a page of measures related to their department, except Vasa, he produces two pages of measures! Tianna feels she is drowning in key performance indicators - they can't all be key! How can she decide which measures are really helpful to the management team in order to help them make the key decisions that are obviously necessary if they are going to improve the performance of this business? Now they also have the CSPA which looks quite disturbing - will that help? Tianna is not even sure whether the focus on ROCE is correct and exclaims: "I'm not convinced that ROCE is the right measure to use and anyway, just 'watching' the figures does not provide the information we need to actually help us to improve them!" At the next management meeting Tianna asks: "If we are going to improve ROCE, perhaps we need to cut down on our training expenditure. Our guides surely know what they are doing by now and every additional training day is a lost opportunity to have our guides leading extra tours and generating more revenue." Vasa argues that TAA needs to provide regular environmental and risk training to keep up safety standards and to ensure that guests are provided with excellent customer service. Tianna, playing devil's advocate, responds: "We know how much we have spent on training, but do we know how effective it has been? Does the training actually lead to more satisfied customers - do we know whether our customers are good promoters that help us market the business?" Vasa answers: "I'm not sure about that, Mateo provides some customer data, but whenever I have talked to him about including data on things like customer complaints and customer satisfaction in the monthly management reports he claims that such measures are the responsibility of the sales and marking team and nothing to do with management accounting. Aria has talked about 'maybe' conducting a customer survey but claims to be too busy "selling" to find time for this. "
