Quote:
Originally Posted by Stoom
Criticism/Disadvantages or Limitations of Return on Investment (ROI) Method of Performance Evaluation:
Although the return on investment is widely used in evaluating performance, it is not a perfect tool. The method is subject to the following criticism:
1. Just telling managers to increase ROI may not be enough. Managers may not know how to increase ROI; they may increase ROI in a way that is inconsistent with the company's strategy; or they may take actions that increase ROI in the short run but harm company the long run (such as cutting back on the research and development). This is why ROI is best used as part of a balanced scorecard. A balanced scorecard can provide concrete guidance to managers, making it more likely that action taken are consistent with the company's strategy and reducing the likelihood that short-run performance will be enhanced at the expense of long-term performance.
2. A manager who takes over a business segment typically inherent many committed costs over which the manager has no control. These committed costs may be relevant in assessing the performance of the business segment as an investment but make it difficult to fairly assess the performance of the manager relative to other managers.
3. A manager who is evaluated based on return on investment (ROI) may reject investment opportunities that are profitable for the whole company but that would have a negative impact on the manager's performance evaluation.
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Good points!
1) Would be the obvious example:
In certain alliance A there are two people call them E and R. They constantly attack together and together they go for the maximizing of their ROI. However they never attack real hostile planets, therefore their maximizing of the ROI is a bit myopic, not fully thought through or simply rather selfish!
2) Not relevant! As we always start with a clean sheet at the start of the round and you don't take over a planet.
3) Good point too! But I think i covered this in the section where I talked about 'landing war landings'. Taking the hit for the benefit of your alliance.
The very first point is the best point though and is something a lot of alliances fail at. For instance, I heard some alliances, even when fighting an 'enemy', sometimes take nights of in hitting them to go for 'easy roids'. Which is I think silly!