CIMA Managing Finance in a Digital World (E1) Practice Exam

Setting clear targets is the step where performance expectations are defined. In a performance management program, this stage involves deciding which metrics will be used, what the actual targets are, and the timeframes for achieving them. These targets provide concrete benchmarks that guide planning, resource allocation, and how performance will be measured and evaluated. They also enable comparisons between actual results and expectations, driving analysis and corrective actions when needed.

Budgeting, while related to planning and resources, is a separate activity that translates plans into financial numbers rather than establishing the performance benchmarks themselves. Hiring focuses on building the team, not on defining performance targets. Risk assessment concentrates on identifying threats and controls rather than setting performance goals. Hence, the act of target setting is the explicit stage in a performance management program.