Consider the Empire Hotel discussed in Problem 25.1A. The manager of the restaurants department complains that sales and resulting earnings for the restaurants are not higher due to the poor reputation of the hotel rooms department. Because the hotel rooms department does not have the best housekeeping staff, the overall reputation of the hotel is slipping. The manager of the hotel rooms department counters that, to keep operating expenses under control and improve ROI, wages for housekeeping have been cut. The manager of the restaurants department has requested that other evaluation techniques such as residual income or a balanced scorecard approach be considered in an effort to resolve this problem.

Information from Problem 25.1A.

Instructions.
Consider which balanced scorecard measures might be useful to the Empire Hotel in evaluating the hotel rooms department. In doing so, identify the following.
a. The organizational goal that the measure is designed to support.
b. The employee resources and efforts that will be affected by the measurement.
c. How the employees should receive feedback and be rewarded for progress toward achieving the goals.

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Average investment. Sales revenue... Operating expenses Operating earnings Empire Hotel Hotel Rooms $10,000,000 $11,250,000 9,450,000 $ 1,800,000 Restaurants $6,250,000 $2,500,000 1,625,000 $ 875,000 Health Spa $1,250,000 $ 800,000 650,000 $ 150,000