The DOI matches its Crossref record; 34 of the 34 references it cites were found in a registry or an index.
Subjectivity and the Weighting of Performance Measures: Evidence from a Balanced Scorecard
Open accessAbstract
This study examines how different types of performance measures were weighted in a subjective balanced scorecard bonus plan adopted by a major financial services firm. Drawing upon economic and psychological studies on performance evaluation and compensation criteria, we develop hypotheses regarding the weights placed on different types of measures. We find that the subjectivity in the scorecard plan allowed superiors to reduce the “balance” in bonus awards by placing most of the weight on financial measures, to incorporate factors other than the scorecard measures in performance evaluations, to change evaluation criteria from quarter to quarter, to ignore measures that were predictive of future financial performance, and to weight measures that were not predictive of desired results. This evidence suggests that psychology-based explanations may be equally or more relevant than economicsbased explanations in explaining the firm's measurement practices. The high level of subjectivity in the balanced scorecard plan led many branch managers to complain about favoritism in bonus awards and uncertainty in the criteria being used to determine rewards. The system ultimately was abandoned in favor of a formulaic bonus plan based solely on revenues.
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Cites
Moral Hazard and Observability
Holmstrom, B. (1979) · The Bell Journal of Economics · doi:10.2307/3003320 · Cited by 8,311
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Journal of Management Accounting Research
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Subjective Performance Measures in Optimal Incentive Contracts
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Subjective Performance Measures in Optimal Incentive Contracts
Baker, G., Gibbons, R., & Murphy, K. (1993) · National Bureau of Economic Research · doi:10.3386/w4480 · Cited by 921
An Empirical Investigation of an Incentive Plan that Includes Nonfinancial Performance Measures
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The design and use of performance management systems: an extended framework for analysis
Ferreira, A., & Otley, D. (2009) · Management Accounting Research · doi:10.1016/j.mar.2009.07.003 · Cited by 1,412
Organizational culture and performance measurement systems
Henri, J.-F. (2006) · Accounting, Organizations and Society · doi:10.1016/j.aos.2004.10.003 · Cited by 700
A descriptive analysis on the implementation of Balanced Scorecards in German-speaking countries
Speckbacher, G., Bischof, J., & Pfeiffer, T. (2003) · Management Accounting Research · doi:10.1016/j.mar.2003.10.001 · Cited by 649
Hall, M. (2008) · Accounting, Organizations and Society · doi:10.1016/j.aos.2007.02.004 · Cited by 614
Emerging themes in management control: A review of recent literature
Berry, A. J., Coad, A. F., Harris, E. P., Otley, D. T., & Stringer, C. (2009) · The British Accounting Review · doi:10.1016/j.bar.2008.09.001 · Cited by 508
Metadata
- Authors
- Ittner, C. D., Larcker, D. F., & Meyer, M. W.
- Venue
- The Accounting Review
- Publisher
- American Accounting Association
- Published
- 2003-07-01
- Volume
- 78
- Issue
- 3
- Pages
- 725-758
- ISSN
- 0001-4826 (ISSN-L)
- 1558-7967
- OpenAlex
- W3122702790
- Cited by
- 936
- References
- 34
- FWCI
- 49.50
- Type
- journal article
- Language
- en
- Open access
- green
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Bibliographic data: Semantic Scholar, OpenAlex, Crossref.
Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
