The Consequences of Individual Perception on Non-Financial Performance Measurement Systems
Abstract
This study aims to develop a conceptual model that describes the consequences of individual perception of non-financial performance measurement systems based on the social exchange theory. The application of non-financial performance measurement may be associated with the perception of increased procedural fairness in the performance measurement process. Furthermore, performance measurements based on various non-financial measures tend to increase subordinates' trust in their superiors. Job satisfaction can be increased by increasing subordinates' trust in superiors. Trust between superiors and subordinates reflects openness to each other. This openness encourages open communication and can increase job satisfaction. Finally, job satisfaction that represents work attitude must be related to job performance.
Keywords
Full Text:
PDFReferences
Asencio, H. (2016). Leadership, trust, and job satisfaction in the public sector: A study of US federal employees. International Review of Public Administration, 21(3), 250–267. https://doi.org/10.1080/12294659.2016.1237342
Blau, P. 1964. Exchange and Power in Social Life. New York: Wiley.
Bol, J. C., & Smith, S. D. (2011). Spillover effects in subjective performance evaluation: Bias and the asymmetric influence of controllability. Accounting Review, 86(4), 1213–1230. https://doi.org/10.2308/accr-10038
Bone, H. (2017). The effects of financial and non-financial performances towards the managerial performances with interpersonal trust as a mediation variable. International Journal of Law and Management, 59(6), 1190–1202. https://doi.org/10.1108/ijlma-08-2016-0072
Burney, L. L., Henle, C. A., & Widener, S. K. (2009). A path model examining the relations among strategic performance measurement system characteristics, organizational justice, and extra- and in-role performance. Accounting, Organizations and Society, 34(3–4), 305–321. https://doi.org/10.1016/j.aos.2008.11.002
Burney, L., & Widener, S. K. (2007). and Managerial Behavioral Responses — Role Stress and Performance. Behavioral Research in Accounting, 19, 43–69
Cropanzano, R., & Mitchell, M. S. (2005). Social exchange theory: An Interdisciplinary review. Journal of Management, 31(6), 874–900. https://doi.org/10.1177/0149206305279602
Diener, E. (2000). Subjective well-being: The science of happiness and a proposal for a national index. American Psychologist, 55(1), 34–43. https://doi.org/10.1037/0003-066X.55.1.34
Edwards, B. D., Bell, S. T., Arthur, W., & Decuir, A. D. (2008). Relationships between facets of job satisfaction and task and contextual performance. Applied Psychology, 57(3), 441–465. https://doi.org/10.1111/j.1464-0597.2008.00328.x
Emerson, R. M. 1976. Social exchange theory. Annual Review of Sociology, 2: 335-362.
Folger, R., Konovsky, M. A., & Cropanzano, R. 1992. A due process metaphor for performance appraisal. In B. M. Staw & L. L. Cummings (Eds.), Research in Organizational Behavior, 14: 129-177. Greenwich, CT: JAI Press.
Fuadah, L. L., Arisman, A., & Permata, L. T. (2020). Comprehensive Performance Measurement Systems on Procedural Fairness, Role Clarity and Managerial Performance. 142(Seabc 2019), 243–248. https://doi.org/10.2991/aebmr.k.200520.042
Hall, M. (2011). Do comprehensive performance measurement systems help or hinder managers’ mental model development? Management Accounting Research, 22(2), 68–83. https://doi.org/10.1016/j.mar.2010.10.002
Hopwood, A. G. (1972). An empirical study of the role of accounting data in performance evaluation. Accounting From the Outside (RLE Accounting): The Collected Papers of Anthony G. Hopwood, 10, 2–28. https://doi.org/10.2307/2489870
Indrayani, I., Nurhatisyah, N., Damsar, D., & Wibisono, C. (2023). How does millennial employee job satisfaction affect performance? Higher Education, Skills and Work-based Learning. https://doi.org/10.1108/HESWBL-01-2023-0004
Johnson, H. T. 1988. Activity based information: A blueprint for world-class management accounting. Management Accounting (June): 23–30.
Judge, T. A., Bono, J. E., Thoresen, C. J., & Patton, G. K. (2001). The job satisfaction-job performance relationship: A qualitative and quantitative review. Psychological Bulletin, 127(3), 376–402. https://doi.org/10.1037//0033-2909.127.3.376
Kaplan, R. S., & Norton, D. P. (2001). Transforming the balanced scorecard from performance measurement to strategic management: Part II. Accounting Horizons, 15(2), 147–160. https://doi.org/10.2308/acch.2001.15.2.147
Kaplan, R.S., & Norton, D.P., 1996. Using the balanced scorecard as a strategic management systems. Harvard Business Review, 75–85 (January–February).
Leventhal, G. S. 1980. What should be done with equity theory? New approaches to the study of fairness in social relationships. In Social Exchange: Advances in Theory and Research, edited by K. Gergen, M. Greenberg, and R. Willis, 27–55. New York, NY: Plenum Press.
Lind, E., & T. Tyler. 1988. The Social Psychology of Procedural Justice. New York, NY: Plenum Press.
Lipe, M. G., & Salterio, S. E. (2000). The balanced scorecard: Judgmental effects of common and unique performance measures. Accounting Review, 75(3), 283–298. https://doi.org/10.2308/accr.2000.75.3.283
Lau, C. M. (2011). Nonfinancial and financial performance measures: How do they affect employee role clarity and performance? Advances in Accounting, 27(2), 286–293. https://doi.org/10.1016/j.adiac.2011.07.001
Lau, C. M., & Buckland, C. (2001). Budgeting—the role of trust and participation: A research note. Abacus, 37(3), 369–388. https://doi.org/10.1111/1467-6281.00092
Lau, C. M., & Moser, A. (2008). Behavioral Effects of Nonfinancial Performance Measures: The Role of Procedural Fairness. Behavioral Research in Accounting, 20(2), 55–71. https://doi.org/10.2308/bria.2008.20.2.55
Lau, C. M., & Roopnarain, K. (2014). The effects of nonfinancial and financial measures on employee motivation to participate in target setting. British Accounting Review, 46(3), 228–247. https://doi.org/10.1016/j.bar.2014.02.006
Lau, C. M., & Scully, G. (2015). The roles of organizational politics and fairness in the relationship between performance management systems and trust. Behavioral Research in Accounting, 27(1), 25–53. https://doi.org/10.2308/bria-51055
Lau, C. M., & Sholihin, M. (2005). Financial and nonfinancial performance measures: How do they affect job satisfaction? British Accounting Review, 37(4), 389–413. https://doi.org/10.1016/j.bar.2005.06.002
Luo, X. 2002. Trust production and privacy concerns on the Internet: A framework based on relationship marketing and social exchange theory. Industrial Marketing Management, 31 (2): 111-118.
Otley, D. T. (1978). Budget Use and Managerial Performance. Journal of Accounting Research, 16(1), 122. https://doi.org/10.2307/2490414.
Ozpamuk, M., Bolatan, G. I., VanDerSchaaf, H., & Daim, T. (2023). Exploring empowerment as an enabler of effective knowledge management. Journal of Knowledge Management, November 2022. https://doi.org/10.1108/JKM-09-2022-0747
Pinder, C. 2008. Work Motivation in Organizational Behavior. 2nd Edition. New York: Psychology Press.
Reina, D.S., & Reina, M.J., 1999. Trust and Betrayal in the Workplace: Building Effective Relationships in Your Organization. Berrett-Koehler Publishers, Inc, San Francisco.
Ross, A. (1994). Trus as A moderator of The Effect Of Performance Evaluation Syle On Job Related Tension : A Research Note. Accounting & Organizations and Society, 19(7), 629–635.
Shank, J. K., & V. Govindarajan. 1994. Measuring the cost of quality: A strategic cost management perspective. Journal of Cost Management (Spring): 5–17.
Sholihin, M., & Lau, C. M. (2003). the Intervening Effects of Procedural Fairness and Interpersonal Trust on the Relationships Between Multiple Measures-Based Performance Evaluation and Managers’ Job Satisfaction. In Gadjah Mada International Journal of Business (Vol. 5, Nomor 3, hal. 321). https://doi.org/10.22146/gamaijb.5632
Taylor, M. S., Tracy, K. B., Renard, M. K., Harrison, J. K., & Carroll, S. J. 1995. Due process in performance appraisal: A quasi-experiment in procedural justice. Administrative Science Quarterly, 40: 495– 523. https://doi.org/10.2307/2393795
Whitener, E. M., Brodt, S. E., Korsgaard, M. A., & Werner, J. M. 1998. Managers as initiators of trust: An exchange relationship framework for understanding managerial trustworthy behavior. Academy of Management Review, 23: 513–530. https://doi.org/10.2307/259292
Wu, C.H., Chen, I.S., & Chen, J.C. 2017. A study into the impact of employee wellness and job satisfaction on job performance. The International Journal of Organizational Innovation, 10 (2): 252-269.
Zhang, J., Wu, Q., Miao, D., Yan, X., & Peng, J. (2014). The Impact of Core Self-evaluations on Job Satisfaction: The Mediator Role of Career Commitment. Social Indicators Research, 116(3), 809–822. https://doi.org/10.1007/s11205-013-0328-5
Refbacks
- There are currently no refbacks.
Fakultas Ekonomi dan Bisnis | Universitas Pelita Harapan | Kampus Universitas Pelita Harapan | Gedung F Lt. 12 | Lippo Karawaci, Tangerang - 15811 | Telp 021-5460901 | Fax 54210992