As part of the annual Group business planning process, challenging financial, operational and sustainable development targets are set to form a Group Scorecard. Performance during the year is then measured against this Scorecard and annual bonus awards are made on this basis. The financial objectives relate to Total Shareholder Return (TSR)*

relative to other major integrated oil companies (see the industry peer group table on page 115), and to Return on Average Capital Employed (ROACE). The operational objectives relate to portfolio value growth with key targets for each business. The sustainable development objectives focus on people, health, safety, environment and reputation. The 2003 Scorecard weightings are 60% for financial objectives, each factor equally weighted, 20% for operational objectives and 20% for sustainable development objectives. The same approach has been adopted for 2004.

*TSR is measured by the average weighted share price performance plus dividend of Royal Dutch and Shell Transport over the 10-day period at the beginning and end of the relevant financial year.

Discussion points 1 What is the mix of financial and non-financial performance measures mentioned in this extract?
2 How easy would it be to measure the performance of an individual against these targets?