By kpeuquet on January 9th, 2014

1. Fill in the blanks below:
“Performance – based incentives refers to _CASH or _NON-MONETARY benefits provided against measurable actions or achievements of a defined PERFORMANCE TARGET

2. A legal or formal agreement governing the procurement of services which also stipulates specific performance goals to be achieved in a specified period by the service provider is an example of:
a. Cash on delivery
b. Conditional cash transfer
c. Performance based contracting
d. Output based aid
Answer: C

3. Regarding the types of performance – based incentive used in commercial sector supply chains, match the list of definitions (Box A) below with the correct acronyms (Box B).

Box A
I. Supply chain partner shares a percentage of their revenue with one or more third party logistics providers based on achieving mutually beneficial performance goals B
II. Individuals workers in the supply chain are rewarded for specific, measurable performance goals D
III. Rewards for partners in the supply chain when they achieve a measurable supply chain specific performance goal (e.g. on-time delivery) A
IV. Discounts or additional free products offered by a supplier to customers for purchasing high volumes C

Box B
A. Supply chain performance based incentives (SCPBI)
B. Gain sharing
C. Sales based performance offers (SBPO)
D. Individual payment increases, incentives and bonuses

4. Fill in the blank below:
_OUTPUT BASED AID_ is the use of donor aid as a financial reward to governments or non-governmental organizations for achieving specific performance outcomes

5. The term performance based financing is often used synonymously with:
a. Performance based incentives
b. Pay for performance
c. Results based financing
d. All the above
Answer: D

6. When setting performance targets for a PBI scheme aimed at improving supply chain performance, which of the following criteria are important? (Select all that apply):
a. Performance targets must be achievable within the duration of the incentive scheme
b. Supply chain personnel are able to make changes in their work that will enable them to achieve the performance targets
c. There is an objective way of measuring the performance target, for example through reliable routinely collected data
d. Selected targets are tied to clear supply chain performance problems that are generally accepted as important by the stakeholders
Answer: A, B, C, D

State whether the following statements are true or false:

7. It is important to clearly identify specific supply chain problems that will be the target of a PBI scheme. TRUE

8. When selecting a target group for a PBI scheme, it is not important to identify a person or group of people who are responsible for the low level of performance of the supply chain FALSE

9. It is important to make arrangements for assessment of the level of performance of the supply chain tasks that are the target of a PBI scheme before the scheme is implemented TRUE

10. Designers of PBI schemes should not waste time analyzing the relationships between different stakeholders and their responsibilities in the supply chain FALSE

Performance Based Incentives Quiz Answers