Ideal standards are those based on the best or most favourable circumstances. Since they are inherently unrealistic and barely attainable, there are some obvious demerits to using the system. However, there are some cogent merits of using an ideal standard. This article outlines the primary pros and cons of using such benchmarks.

== Pros ==

Motivation for efficient, hard workers

Although the ideal standard is rarely attainable, employees have a benchmark for excellence. Proximity to the ideal would represent above par work and can act as a motivator for employees to improve wherever they can, without getting complacent. Unlike attainable standards, the ideal is rarely achieved, thus ensuring that employees continue to strive for longer periods.

Fosters increased responsibility

The ideal benchmark does not incorporate factors that are beyond the employees' control, such as machine downtime and rest periods. This standard could encourage employees to adopt responsibilities beyond their purview. It facilitates Total Quality Management by having employees pay attention to things that are beyond their purview and use their initiative to help ameliorate or avoid situations disadvantages to their meeting the targets.

Measurement

The measurement required for setting an IS gives management the opportunity to determine the peak performance and capacity of operations. This information is useful when making decisions about increasing efficiency or expanding capacity in order to raise production levels.

General advantages

The ideal benchmark can serve as a basis for incentive schemes; this advantage applies to any standard, however. In addition, ideal standards provide a means of monitoring costs and measuring efficiency levels.

== Cons ==

Can be de-motivating

Some employees are motivated by challenge while others are not. The concern with ideal benchmarks is that, since they are rarely (if ever) met, employees might regard it as de-motivating. Some employees might believe that if they cannot achieve the standard, they should not bother to abide by it.

Make no provisions for normal adverse circumstances/ inefficiencies

The IS might be too unrealistic to be meaningful. They do not make allowances for normal inefficiencies (machine downtime, idle time) and do not necessarily facilitate adequate rest periods.

Difficult to interpret variances

One of the most important demerits of ideal standards is that they usually provide adverse variances. This makes it difficult to interpret the reasons for these differences, which in turn makes management by exception rather difficult. Since adverse variances are expected, the data on the variances are not as information as one using the attainable standard might be.

== Ideal standards cannot be used for forecasting and planning ==

It is not prudent to use the costs from an IS as the basis for cash flow projections and price setting. For example, if used as the basis for price setting, ideal benchmarks can result in overruns because they assume greater efficiency or cost reduction than the norm.

== Conclusion ==

Ideal standards appear to have several demerits compared to other standards. However, the decision to use an ideal standard should be based on context. The nature of the job; how employees respond to the standard; and how management intends to deal with its limitations, are some of the factors that can help determine whether or how an ideal standard should be used.

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