Three of the following points are made under the step ‘Setting performance standards’. Which one belongs to another step of the controlling process?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Standards may have to be revised when a deviation cannot be corrected through managerial action.
Option (1) A manager should try to set standards in precise quantitative terms. — Under setting performance standards. Standards in precise numbers make their comparison with actual performance much easier.
Option (2) Standards should serve as benchmarks towards which an organisation strives to work. — Under setting performance standards. Standards are the criteria for measuring performance. So they serve as benchmarks.
Option (3) Standards may have to be revised when a deviation cannot be corrected through managerial action. — Under taking corrective action. Revising standards is the last resort in taking corrective action. It is used when a deviation cannot be corrected through managerial action.
Option (4) Standards may need some modification due to changes in the business environment. — Under setting performance standards. Standards must be flexible, because changes in the business environment may call for modification.
NCERT (2026-27 Edition): “Step 1: Setting Performance Standards: The first step in the controlling process is setting up of performance standards. Standards are the criteria against which actual performance would be measured. Thus, standards serve as benchmarks towards which an organisation strives to work. …” “Step 1: Setting Performance Standards … At the time of setting standards, a manager should try to set standards in precise quantitative terms as this would make their comparison with actual performance much easier. …” “Step 1: Setting Performance Standards … It is important that standards should be flexible enough to be modified whenever required. Due to changes taking place in the internal and external business environment, standards may need some modification to be realistic in the changed business environment.” “Step 5: Taking Corrective Action: … Corrective action might involve training of employees if the production target could not be met. Similarly, if an important project is running behind schedule, corrective action might involve assigning of additional workers and equipment to the project and permission for overtime work. In case the deviation cannot be corrected through managerial action, the standards may have to be revised. …” |