Several years ago, United Parcel Service (UPS) believed that the Internet was going to change the parcel delivery market and would require UPS to become a more nimble and customer-focused organization. As a result, UPS replaced its old measurement system, which was 90% oriented toward financial performance, with a balanced scorecard. The scorecard emphasized four "point of arrival" measures, which were:

Customer satisfaction indexa measure of customer satisfaction.

Employee relations indexa measure of employee sentiment and morale.

Competitive positiondelivery performance relative to competition.

Time in transitthe time from order entry to delivery.

a. Why did UPS introduce a balanced scorecard and nonfinancial measures in its new performance measurement system?

It believed that focusing on the financial numbers by themselves would not reveal how financial objectives were to be achieved.

It is required by GAAP.

Apparently, UPS determined that its future success as an organization did not depend on "point of arrival" measures.

These measures emphasized customer performance to a much lower degree than would straight financial numbers.

None of these choices is correct.

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b. Why do you think UPS included a factor measuring employee sentiment?

If employees feel poorly about the organization, or if they feel that they don't make a difference, then they are not likely to deliver premium service experiences to their customers.

It is required by GAAP.

To curtail employee morale.

Measuring the improving employee morale is not critical to organizations relying on front-line employees that deliver the customer experience.

None of these choices is correct.

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