Question : What is the purpose of comparing actual performance with standards?
Option 1: To identify deviations.
Option 2: To establish new goals.
Option 3: To punish underperforming employees.
Option 4: To avoid the planning process.
Correct Answer: To identify deviations.
Solution : The correct answer is (a) To identify deviations.
The purpose of comparing actual performance with standards is to identify deviations or variations from the desired or planned performance. Identifying deviations is a crucial step in the controlling process as it helps managers detect any gaps between the planned and actual performance. Deviations can occur due to various reasons, such as unexpected obstacles, inefficiencies, errors, or changes in external factors. By recognizing these deviations, managers can take appropriate actions to address the issues and bring the performance back in line with the desired standards.
