A performance evaluation system must contain periodic review of operations so that the objectives of the firm are accomplished. It is important to have the accounting information to evaluate domestic and foreign operations’ costs and profitability’s.

It is not all that simple to measure the performance of an individual, a division, a subsidiary, or even a company as a whole. It is a lengthy and hectic process. The objectives of performance evaluation are to −

●      Find the economic performance of the firm

●      Analyze each unit’s management performance

●      Monitor the progress of objectives, including the strategic goals

●      Assist in appropriate allocation of resources