Reference no: EM132552807
Apps-galore develops mobile phone apps and sells these apps on Apple's app store. To be profitable in this very competitive industry, Apps-galore needs to have a good understanding of consumer emerging needs, and then develop and launch the apps addressing these needs ahead of its competitors. To do so, the company hires a number of app developers to design, develop and test high quality apps.
Currently, Apps-galore's management has a predominant focus on company's financial success, therefore, designed its performance measurement system using the financial indicators below:
1. Achieve a 5% increase in annual sales and a 10% increase in annual net profit
2. Achieve a return on investment of 15% annually.
Based on this performance measurement system, IT director of Apps-galore suggests to motivate app developers by allowing them to share 10% of company's annual profit in proportion to their base salaries, once the sales target is achieved. However, the managing director is unsure of this incentive system, and has asked you for advice.
Requirements:
Question 1. Discuss two issues with this incentive system, and provide one recommendation for improvement.
Question 2. After attending a seminar about performance measurement systems, the managing director is fascinated about the Balanced Scorecard and asks you to develop detailed company objectives from the customer, internal business process, and learning and growth perspectives. You are required to develop one specific objective for each of the three perspectives.
Question 3. In addition, the managing director has asked you to comment on the linkages between the objectives of customer, internal business process, and learning and growth, and how these objectives contribute to the overall financial success of the company.
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