Which of the following statements about setting performance standards…

The correct answer is Option (3) → Improving the goodwill of a firm is an example of a quantitative standard.

Option (1) Standards are the criteria against which actual performance would be measured. — True. Standards are the criteria for measuring performance. They serve as benchmarks.

Option (2) Standards should be flexible enough to be modified whenever required. — True. Changes in the business environment can make a standard unrealistic. So standards should be flexible.

Option (3) Improving the goodwill of a firm is an example of a quantitative standard. — False. Goodwill cannot be put in numbers. Improving goodwill is a qualitative standard, like the motivation level of employees. Quantitative standards are in numbers, such as cost, revenue or units produced.

Option (4) A manager should try to set standards in precise quantitative terms. — True. Standards in precise numbers make comparison with actual performance much easier.