Measuring the Performance of Activities
Measuring the performance of activities, subunits, managers, and other employees within the organization.  one means of motivating people toward the organization’s goals is to measure their performance in achieving those goals. Such measurements then can be used as the basic for rewarding performance through positive feedback, promotions, and pay raises. For example, most large corporations compensate their executives, in part, on the basis of the profit achieved by the subunits they manage. In other companies, executives are rewarded on the basis of operational measures, such as product quality, sales, or on-time delivery. At Disney’s Animal King-dom, for example, management could be rewarded, in part, on the basis of growth in attendance in the theme park.             In addition to measuring the performance of people, the managerial accounting system measures the performance of an organization’s subunits, such as divisions, product lines, geographical territories, and departments. These measurements help the subunits’ managers obtain the highest possible performance level in their units. Such measurements also help top management decide whether a particular subunit is a viable economic investment. For example, it may turn out that a particular attraction at Disney’s Animal Kingdom is too costly an activity to continue, despite the efforts of a skilled management team.