Taken from Financial & Managerial Accounting (19th edition) by Williams, Haka, Bettner, Carcello

Please provide a thorough explanation. I am having a very difficult time understanding this.

Thank you.

PROBLEM 25.2A

Empire Hotel and Balanced Scorecard

Consider the Empire Hotel discussed in Problem 25.1A. The manager of the restaurants department complains that sales and resulting earnings for the restaurants are not higher due to the poor reputation of the hotel rooms department. Because the hotel rooms department does not have the best housekeeping staff, the overall reputation of the hotel is slipping. The manager of the hotel rooms department counters that, to keep operating expenses under control and improve ROI, wages for housekeeping have been cut. The manager of the restaurants department has requested page 1112that other evaluation techniques such as residual income or a balanced scorecard approach be considered in an effort to resolve this problem.

Instructions

Consider which balanced scorecard measures might be useful to the Empire Hotel in evaluating the hotel rooms department. In doing so, identify the following.

A. The organizational goal that the measure is designed to support.

B. The employee resources and efforts that will be affected by the measurement.

C. How the employees should receive feedback and be rewarded for progress toward achieving the goals.