ACCA Performance Management (F5) Certification Practice Exam

What is an example of an internal source of information?

1. Customer feedback

2. Business magazines

3. Employee records on the payroll system

4. Market research reports

The correct answer is: Employee records on the payroll system

An internal source of information refers to data and insights that are generated from within the organization itself. Employee records on the payroll system serve as a prime example of this type of information because they provide the organization with direct and relevant insights regarding its workforce, including details about salaries, benefits, and attendance. These records are crucial for internal decision-making processes such as budgeting, planning, and resource allocation. They reflect the internal dynamics of the organization, allowing management to assess workforce costs, analyze employee performance, and make informed decisions related to human resources. In contrast, customer feedback, business magazines, and market research reports originate from external sources. Customer feedback comes directly from consumers and helps gauge satisfaction, but it does not originate within the organization. Business magazines provide broader industry insights and analyses but do not reflect internal operations or performance. Market research reports, while valuable for strategic planning, are collections of data gathered from outside the organization, which makes them external sources as well. The distinction between internal and external sources strengthens a manager's ability to collect relevant and contextualized data for effective performance management decisions.