Discussion on Segment Performance

Compensation for the senior managers must be tied to the segment performance through the use of ROI or return on investment. Following are the reasons why it should be tied to segment performance:

·         Senior managers are responsible for making significant decisions within the firm. Most of the decisions which impact the organizations are taken by the senior managers. In addition to it, even issues within the organization are identified by them and are resolved through effective strategies.

·         Senior managers also make decisions about disinvestment and investment which means that the role of senior managers within the firm is irreplaceable.

·         The reasons why compensation must be tied to segment performance also include the fact that different plans are evaluated by senior managers before a firm invests in something. Senior managers are also responsible for performing cost benefit analysis.

·         A significant role is played by a senior manager in determining the project risk and evaluating the expected returns from projects. For instance, if a project is to be implemented, its feasibility is determined by senior managers and it is analyzed where it is profitable to conduct the project or not.

Method of Evaluation of Segment Performance
The method of balance score card is considered the best method of analyzing and determining the segment performance. Following are the reasons why this method should be utilized:

·         It helps in evaluating businesses on the basis of four perspectives including learning, growth, internal, and financial perspective.

·         In addition to it, both service and projects are prioritized by it (Landy, Zedeck, & Cleveland, 2017).

References of Segment Performance

Landy, F., Zedeck, S., & Cleveland, J. (2017). Performance measurement and theory. Routledge.