Section B – TWO questions ONLY to be attemptedAPX Accountancy （APX) is an accountancy part

Section B – TWO questions ONLY to be attempted

APX Accountancy (APX) is an accountancy partnership with 12 branches covering each of the main cities of Emland. The business is well established, having organically grown over the last 40 years to become the second largest non-international practice in Emland. The accountancy market is mature and expands and contracts along with the general economic performance of Emland.

APX offers accountancy, audit, tax and business advisory services. The current business environment in Emland is dominated by a recession and the associated insolvency work is covered within the business advisory area of APX.

At present, the practice collects the following information for strategic performance evaluation:

The above figures are for the most recent financial year and illustrate the metrics used by APX. Equivalent monthly figures are produced for each of the monthly partner meetings which review practice performance.

The staff are remunerated based on their grade, with non-partners obtaining a bonus of up to 10% of basic salary based on their line managers’ annual review. The partners receive a fixed salary with a share of profit which depends on their contractual responsibilities within the partnership.

The managing partner of APX is dissatisfied with the existing performance management system, as she is not convinced that it is helping to achieve the long-term goal of expanding and ultimately floating the business on the national stock exchange. Therefore, she has asked you to consider the impact of applying Fitzgerald and Moon’s building block approach to performance management in the practice.

Required:

(a) Briefly describe Fitzgerald and Moon’s building block model of performance management. (4 marks)

(b) Evaluate the existing performance management system at APX by applying the building block model. (8 marks)

(c) Explain the main improvements the introduction of a building block approach to performance management could provide, and suggest specific improvements to the existing system of performance measures at APX in light of the introduction of the building block model. (8 marks)