Learning Objectives:

• Understand the concept of Key Performance Indicators (KPIs) and their role in measuring and assessing the performance of systems and industrial processes.
• Recognize the significance of KPIs in decision-making and performance improvement.

A key performance indicator (or KPI) is a metric that is one of the most important indicators of the current performance level of an individual, department and/or company in achieving goals.

KPI must be a quantifiable measure.

Solved Example: 9004-01

What does the acronym KPI stand for?

A. Key Predictive Indicator

B. Key Predictor Index

C. Key Performance Indicator

D. Kaplan Penalty for Inflation

Correct Answer: C

Learning Objectives:

• Identify and analyze the key factors that impact productivity in industrial and systems engineering, such as workforce, equipment, technology, and process design.

• Productivity is a measure of how well resources are utilized to produce output.
• It relates output to input in any system, where some value addition is performed on the input resources.
• Productivity is the ratio of output obtained to input expended.
• Total productivity considers all resources at a time.
• Partial productivity compares one input factor with one output factor.

Solved Example: 9002-01

Productivity can be improved by:

A. Increasing inputs for constant outputs

B. Decreasing outputs for constant inputs

C. Increasing inputs and outputs both in same proportion

D. Decreasing inputs for constant outputs

Correct Answer: D

Solved Example: 9002-02

Labor productivity is equal to:

A. Result/material costs

B. Result/labor costs

C. Result/capital costs

D. Revenue growth

Correct Answer: B

Solved Example: 9002-03

Which one of the following is not a functional element considered during the performance measure of an organization?

A. Customers

B. Poka-yoke

C. Production

D. Suppliers

Correct Answer: B

Learning Objectives:

• Understand the various factors that influence the design and implementation of wage scales.
• Describe different wage structure types, including flat rate, time-based, skill-based, and performance-based wage structures.
• Discuss the need for wage scale adjustments over time, considering factors like inflation, market changes, and organizational growth.

According to Collins Dictionary, wage scale is defined as "a schedule of wages paid for the performance of related jobs or tasks in a given industry, plant, locality, etc"

1. Labour Unions : The labour unions attempt to work and influence the wages primarily by regulating or affecting the supply of labour.
2. Personal perception of wage : Whether the wage is adequate and equitable depends not only upon the amount that is paid but upon the perceptions and the views of the also recipients of the wage.
3. Cost of living : Another important factor affecting the wage is the cost of living adjustments of wages. It is an essential ingredient of long term labour contracts unless provision is made to reopen the wage clause periodically.
4. Government legislation : The laws passed and the labour policies formed by the Government have an important influence on wages and salaries paid by the employees. Wages and salaries can’t be fixed below the level prescribed by the government.
5. Ability to pay : Labour unions have often demanded an increase in wages on the basis that the firm is prosperous and able to pay. If the firm is highly successful, there is little need to pay for more than the competitive rates to obtain personnel.
6. Supply and demand :- The practical result of the operation of this law of supply and demand is the creation of “going- wage rate”.
7. Productivity : Productivity is the key factor in the operations of a company. High wages and low costs are possible only when productivity increases appreciably.

Solved Example: 9383-01

The factors which are to be considered while developing a good wage incentive plan will include:

A. Adequate incentive

B. Ease of administration

C. Guaranteed basic pay

D. All of these

Correct Answer: D

Solved Example: 9383-02

In the Halsey system of wage incentive plan, a worker is:

A. Paid as per efficiency

B. Ensured of minimum wages

C. Not paid any bonus till his efficiency

D. Never a loser

Correct Answer: B

Solved Example: 9383-03

The time required to complete a job is established and a bonus is paid to the worker based on the exact % of time saved. This type of incentive plan is known as:

A. Dry work Plan

B. Halsey Premium Plan

C. Taylor Plan

D. Rowan Plan

Correct Answer: D

Solved Example: 9383-04

According to Rowan plan of wage incentive system, bonus is paid to a worker:

A. Whose output exceeds 67% efficiency

B. On the percentage of time saved

C. On the percentage of time worked

D. On the percentage of standard time

Correct Answer: C

Solved Example: 9383-05

Halsey plan of wage incentive:

A. Is not applied to all level of workers

B. Is applied to all level of workers

C. Does not guarantee minimum wage

D. Is based upon efficiency of worker

Correct Answer: B

Learning Objectives:

• Define the Balanced Scorecard framework and its purpose in strategic management.

A balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals.

• It was originated by Dr. Robert Kaplan (Harvard Business School) and David Norton as a performance measurement framework.
• That added strategic non-financial performance measures to traditional financial metrics to give managers and executives a more 'balanced' view of organizational performance.
• Provides method for organisation to systematically develop a comprehensive system of planning and control.
• Performance measurement system that translates organisation strategy into objective measures, targets and initiatives.

• Translating the vision: helping all employees understand how their day-to-day work contributes to long-term goals.
• Communicating and linking: disseminating long-term goals both up and down an organizational hierarchy, ensuring that both departmental and individuals objectives are in alignment.
• Business planning: taking long-term strategy and using it as the basis for how resources and capital are allocated.
• Feedback and learning: the scorecard enables strategic and real-time learning because it measures daily performance and spending in the context of overarching goals, allowing organizations to make necessary changes.

• The Financial Perspective covers the financial objectives of an organisation and allows managers to track financial success and shareholder value.
• The Customer Perspective covers the customer objectives such as customer satisfaction, market share goals as well as product and service attributes.
• The Internal Process Perspective covers internal operational goals and outlines the key processes necessary to deliver the customer objectives.
• The Learning and Growth Perspective covers the intangible drivers of future success such as human capital, organisational capital and information capital including skills, training, organisational culture, leadership, systems and databases.

Solved Example: 9016-01

Which of the following is not a performance measure aspect of the Balanced Scorecard Incentive Concept?

A. Financial

B. Customer

C. Learning and Growth

D. External

Correct Answer: D

Solved Example: 9016-02

Consensus gaining while strategy management in balanced scorecard is made at the stage of:

A. Feedback and learning

B. Translating the vision

C. Business planning

D. Learning

Correct Answer: B

Learning Objectives:

• Learn about various methods and tools used to measure customer satisfaction, such as surveys, feedback forms, and Net Promoter Score (NPS).
• Identify and analyze the key factors that impact customer satisfaction, including product quality, service quality, price, and customer support.

Solved Example: 9003-01

A good customer service should focus on:

A. Building a dynamic relationship with the customer

B. Creating compulsive situation to make a sale

C. Profit making

D. Aggressive marketing

Correct Answer: A

Solved Example: 9003-02

Which of the following is NOT an element of customer services?

A. Handling customer's grievances smoothly

B. Effective online communication

C. The art of listening to customers

D. Monitoring and measuring effectiveness

Correct Answer: B

Solved Example: 9003-03

The essence of the law of diminishing returns is:

A. Inelastic production

B. Negative marginal production

C. Declining total production

D. Declining average production

Correct Answer: B