Difference between revisions of "ROI as a performance related reward"
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| − | ROI as a performance related | + | Using [[ROI|ROI]] as a performance related rewards is a dangerous, myopic measure: |
| + | * They encourage division manager to retain assets beyond their optimal life and not to invest in new invest | ||
| + | * They can cause corporate managers to over-allocate resources to divisions with older assets because the appear to be more profitable | ||
| + | |||
| + | =Con's= | ||
| + | All of the con's for [[Accounting Myopia|Accounting Myopia]] | ||
[[Category:finance]] | [[Category:finance]] | ||
Latest revision as of 19:25, 27 August 2020
Using ROI as a performance related rewards is a dangerous, myopic measure:
- They encourage division manager to retain assets beyond their optimal life and not to invest in new invest
- They can cause corporate managers to over-allocate resources to divisions with older assets because the appear to be more profitable
Con's
All of the con's for Accounting Myopia
