Impact of the interactive and diagnostic uses of performance measurement systems on procedural fairness perception,cooperation and performance in supply alliances

We examine the effects of interactive and diagnostic uses of performance measurement systems (PMSs) on two behavioural factors (procedural fairness perception and cooperation) in inter-firm alliances. We further investigate whether the two behavioural factors mediate the relationship between PMS uses and alliance performance. We find that both interactive and diagnostic uses of PMS are significantly related to procedural fairness perception but only the interactive use is significantly related to cooperation. The relationships between the two uses of PMS and alliance performance are serially mediated by procedural fairness perception and cooperation. These findings contribute to management accounting studies in inter-firm alliances.     

Management controls and their links with fairness and performance in inter‐organisational relationships

This study seeks to contribute to inter‐organisational management control literature by examining the impact of the use of management controls on fairness and performance. Findings from a survey of 232 Australian inter‐organisational relationships reveal that the use of social controls could improve procedural, distributive and interactional fairness. In turn, distributive and interactional fairness could lead to high levels of perceived relational performance. Additional analyses also confirm that formal and social controls are used as complements in managing inter‐organisational relationships.     

Behavioral effects of fairness in performance measurement and evaluation systems: Empirical evidence from France

The measurement and evaluation of employee performance are crucial aspects of the management accounting system because of their effects on employee motivation. It is therefore important for management accountants to understand how such effects occur. Fairness may be a key explanatory factor. This study proposes that the effects of the fairness of employee performance measurement and evaluation procedures on employee job satisfaction and organizational commitment are indirect. The results, based on a sample of 60 French managers, support these expectations. For the relationship between procedural fairness and job satisfaction, the effects are indirect through trust and fairness of outcomes. For the relationship between procedural fairness and organizational commitment, the effects are indirect through fairness of outcome, trust and job satisfaction. The results also indicate that affective effects through trust and satisfaction are substantially stronger than that through fairness of outcome. Fair performance evaluation procedures therefore do more than the mere provision of equitable outcomes among French managers.     

THE INTERVENING EFFECTS OF PARTICIPATION ON THE RELATIONSHIP BETWEEN PROCEDURAL JUSTICE AND MANAGERIAL PERFORMANCE

Prior studies have suggested that the subordinates’ perception of fairness in their organizations’ procedures is related to improvements in the subordinates’ performance. However, the positive relationship between perception of justice and performance may not be a direct one, but is indirect via the intervening variable of participation. It is likely that the importance of maintaining procedural fairness in the organization will lead senior managers (superiors) to select procedures that allow their subordinates more participation privileges in the organization’s affairs because high participative procedures are perceived to be fair. This increase in participation, in turn, is likely to improve the subordinates’ performance. The results, based on a path analytical model and a sample of 83 senior managers, indicate that procedural justice has an indirect effect on performance via participation. On the basis of these results, it is possible to conclude that the importance of procedural fairness in the organization leads to the selection of procedures with high subordinates’ participation, which, in turn, leads to high managerial performance.     

ORGANISATIONAL COMMITMENT IN THE POLICE SERVICE: EXPLORING THE EFFECTS OF PERFORMANCE MEASURES,PROCEDURAL JUSTICE AND INTERPERSONAL TRUST

This study aims to investigate whether, and how, the use of performance measures, procedural justice, and interpersonal trust interact to affect organisational commitment of police officers. Drawing on a survey based on a sample of 57 senior officers within a single police force, we find that the use of performance measures, procedural justice, and interpersonal trust are positively associated with organisational commitment. Further analysis reveals that trust between officer and superior mediates the relationship between the use of non‐financial measures and organisational commitment, but procedural justice does not have a mediating effect on commitment. These findings are further explored through selected interviews with respondents.     

中国上市银行薪酬激励与银行绩效

本文以14家股份制商业银行为样本,从公司治理视角分析上市银行CEO报酬及银行内的报酬差异与银行经营绩效间的关系。研究结果表明,中国上市银行员工薪酬激励与银行绩效有显著的正相关关系;缩小银行高管薪酬和员工薪酬差异对银行绩效有显著的正相关影响;股权激励对上市银行绩效的影响并不显著;银行高管内部薪酬差异却存在锦标赛竞争机制,即银行高管间适当的薪酬差异可以提升银行绩效。因此,改变目前中国上市银行报酬—绩效契约是今后的金融业改革中需要解决的重要问题。     

Towards a fair procedure for risk management

The need for fairness in risk management is frequently expressed in the risk literature. In this article, fairness is connected to the procedure for decision‐making. Two models for procedural justice in the management of risks are discussed, one that focuses on a hypothetical thought experiment, and one that focuses on actual dialogue. The hypothetical approach takes John Rawls’ theory of justice as a starting point. The actual inclusion approach employs Iris Marion Young’s theory of inclusive deliberative democracy. With Rawls’ theory, important issues concerning risk distribution are emphasized, and a parallel between social primary goods and risk management is drawn. The hypothetical reasoning should mainly serve as a guide concerning risk issues that affect people who cannot be included in the decision procedure, such as future generations. However, when the affected can be included, an interactive dialogical reasoning is to be preferred. Here, Young’s theory is fruitful. It aims at fair decisions by fulfilling conditions of inclusiveness, equality, reasonableness and publicity.     

The Implementation and Adaptation of the Balanced Scorecard in a Government Agency

Despite considerable progress in understanding the adoption and practice of the Balanced Scorecard (BSC) as a performance management tool in government organisations, how a well‐designed BSC can become a sustainable organisational practice remains under explored and of central importance. Through a qualitative field study carried out within a government agency (Alpha), this paper demonstrates that Alpha's senior management implemented a BSC framework because they believed it would benefit the agency to realise its broader organisational and socio‐economic goals, namely sustainable organisational efficiency and social status. We conclude that an organisation's performance management systems can travel across internal organisational boundaries over time and could be assimilated by organisational actors to become a sustained internal control mechanism in a complex socio‐political setting.     

Performance measurement systems in higher education: How levers of control reveal the ambiguities of reforms

This paper focuses on the introduction of new performance measurement system (PMS) for measuring teaching performance in Universities. The adoption of such PMS should prompt significant changes in existing control processes, but the goals of reform do not automatically translate into the desired organisational responses. Given the impact of PMS on management controls, the nature of such ambiguities may be better investigated using a framework that allows management control systems (MCS) to be taken in account. This paper investigates key actors' perceptions regarding the introduction of PMS through the lens of the levers of control (Simons, 1995, 2000). A qualitative analysis is conducted on interviews held with Italian university teaching managers and heads of programmes to examine the ambiguities arising from the implementation of a PMS.Several ambiguities emerge, both within and between the levers analysed, suggesting some reasons for the (partial) ineffectiveness of PMS reforms. In particular, the belief systems lever is crucial in making reforms acceptable, bureaucratic procedures are important in the diagnostic control systems lever, and performance indicators operate as a boundary system lever. Our findings show that administrative and academic actors perceive the interactive control capacity of PMS differently.     

差异化人才管理对员工创新绩效的“双刃剑”效应

基于调节焦点理论和公平启发理论,运用结构方程模型考量差异化人才管理对员工创新绩效的影响机制。结果显示：促进定向工作重塑在差异化人才管理与员工创新绩效之间起正向中介作用,防御定向工作重塑在二者间起负向中介作用;组织公平感正向调节差异化人才管理与促进定向工作重塑之间的关系,负向调节差异化人才管理与防御定向工作重塑之间的关系;组织公平感增强促进定向工作重塑的正向中介作用,削弱防御定向工作重塑的负向中介作用。     

The influence of organizational justice on accountant whistleblowing

In this research study, we apply the theory of organizational justice to the design of whistleblowing policies and procedures. As a pro-social behavior, we posit that employee whistleblowing is likely to increase when organizational whistleblowing procedures, outcomes, and related exchanges with superiors are perceived as fair. We test our hypotheses with an experiment involving 447 internal auditors and management accountants. Our results indicate that whistleblowing policies and mechanisms incorporating higher levels of procedural justice, distributive justice, and interactional justice were perceived to increase the likelihood that an organizational accountant would internally report financial statement fraud.     

The link between formality and procedural fairness: The influences of precision,sensitivity and role clarity

This study investigates the complex and not straight-forward association between formality and procedural fairness. It examines the mediating roles of precision of performance measures, sensitivity of performance measures and role clarity. Using survey responses of functional managers of Australian manufacturing firms, the study finds that the link between formality and procedural fairness is mediated by sensitivity of performance measures and role clarity. Role clarity also mediates the link between sensitivity of performance measures and procedural fairness. Our study contributes to the literature by identifying two important factors through which formal performance evaluation can enhance procedural fairness, which is a source of performance motivation.     

Accounting for Research: Academic Responses to Research Performance Demands in an Australian University

This study examines the perceptions of individual academics about performance management systems (PMS) developed by an Australian university to meet government research assessment requirements. Using a case study method, the research examines the period 2006–2010 within a university, relying on academics’ responses to a survey on the effect of research PMS, contextualised with publicly available organisational documents. The case study university performed well in the Australian Government's first research assessment exercise, Excellence in Research for Australia (ERA) 2010. However, academics reported increasing levels of stress and decreasing job satisfaction, consistent with research that identifies the commodification of academic research. This process of commodification has occurred as a result of the implementation of PMS designed to assess academics’ research‐focused performance and thereby strengthen the university's performance under ERA. In investigating in detail the responses of individual academics to Australia's research assessment initiative, the paper reveals a disconnect between the macro‐institutional demands placed on the higher education sector, university changes made to accommodate these demands, and the ability of academics to meet these demands in a sustainable way.     

The association between performance appraisal systems,work‐related attitudes and academic performance

This study examines the association between Brown et al.’s (2010) four dimensions of the quality of the performance appraisal system (the clarity, communication, fairness and trust) with the work‐related attitudes [job‐related stress, employee organisational commitment (EOC) and propensity to remain] of Australian accounting academics. Furthermore, the study examines the influence of such work‐related attitudes on academic performance in respect to research, teaching and community service. Data were collected from a mail survey distributed to accounting academics within Australian universities. The results indicate that all four dimensions of the quality of the performance appraisal system were associated with work‐related attitudes. Specifically, communication, fairness and clarity were positively associated with the level of EOC, trust was negatively associated with job‐related stress and fairness was positively associated with the propensity to remain. With respect to the effect on academic performance, job‐related stress was found to be negatively associated with research performance, while the level of EOC was positively associated with both teaching and community service. The findings highlight the importance of improving the quality of performance appraisal systems within the Australian higher education sector.     

Globalization discourses and performance measurement systems in a multinational firm

This paper examines the role of management control systems, in particular performance measurement systems (PMSs) such as the Balanced Scorecard and key performance indicators, in a multinational context. We begin by exploring how globalization discourses are engaged with, consumed, appropriated, re-produced, disseminated and promoted in a major multinational company. We link the adaptation and dissemination of global discourses of senior managers with Said’s (1975/1997) concepts of authority and molestation. We then examine how PMS are translated and customized within local manufacturing plants and sales units in the UK and China, the significance of benchmarking and the extent to which PMS render managerial discourses of globalization practical. We comment on the importance of discourse in understanding control systems in general and the way in which external discourses impact the internal practices of the organization. We also explore some of the sources that give rise to molestation (deviation of practice from global aspirations of senior managers). We conclude by stressing the potential for the globalizing effects of PMS through the interaction of the discourses of HQ and subunits, even in the absence of explicit statements about globalization.     

Goal-setting participation and goal commitment: Examining the mediating roles of procedural fairness and interpersonal trust in a UK financial services organisation

This study investigates whether participation in goal-setting within performance measurement and evaluation processes affects goal commitment and if so, whether the effect is mediated by procedural fairness and interpersonal trust. Using a sample of 54 managers within a UK financial services organisation, this study finds that participation in goal-setting is positively associated with goal commitment. Further analysis arising from introducing procedural fairness and interpersonal trust as mediating variables reveals that the association is significantly mediated by procedural fairness. Overall, these findings offer empirical evidence on the importance of procedural fairness on the relationship between participation and goal commitment.     

Fairness in performance evaluation and its behavioural consequences

A recent paper in Accounting and Business Research by Lau et al. (2008) offers systematic evidence to explain whether managers’ perceptions on fairness of performance evaluation procedures affect attitudes such as job satisfaction; and if it does, the different behavioural processes involved. Our paper re‐examines Lau et al.’s model and hypotheses to assess the external validity of their findings, based on a very different sample of managers. Drawing on recent organisational justice literature, it further develops the model and examines the potential interaction effects of fairness of performance evaluation procedures and other variables on job satisfaction. Finally, it extends the outcome variable to include manager performance. Using survey responses from 165 managers, supported by 24 interviews, drawn from three major organisations in the manufacturing and financial services sectors, we find that Lau et al.’s results on the indirect effects of fairness of performance evaluation procedures on job satisfaction are generalisable to other organisational settings and managerial levels. However, using their model we do not find support for the outcome‐based effects through distributive fairness. Developing a revised model we observe that the effects of distributive fairness on job satisfaction are indirect via organisational commitment. When the model is further developed to incorporate performance as the outcome variable, we observe similar findings.     

The perceived fairness of performance evaluation: The role of uncertainty

This paper investigates the relationship between performance evaluation procedures and managerial perceptions of procedural justice. We examine two metric and two process characteristics. Metric characteristics are the diversity of metrics used by superiors and their reliance on outcome vs. effort metrics. Regarding process characteristics, we analyse the amount of subordinate's voice in the performance evaluation process, and the extent of formalization of the process. Using uncertainty management theory, we argue that justice effects of performance evaluation procedures may not be direct but are instead conditional on the amount of task uncertainty managers face in the their job context as well as on managers’ tolerance for ambiguity. Using a sample of 178 managers from the banking industry, we find that all four performance evaluation characteristics are related to justice perceptions, yet their effect depends on the level of task uncertainty and tolerance for ambiguity. These findings explain some inconsistencies in extant studies on fairness of performance evaluation procedures.     

A path analysis investigation of the relationships between CEO pay ratios and firm performance mediated by employee satisfaction

We posit that information about CEO pay ratios is important to investors because employees' perceived fairness of their firm’s CEO pay ratio has consequences for firm performance. We use path analysis to examine the association between firm performance and (1) the predicted CEO pay ratio as determined by economic factors (the fair component of CEO pay ratio) and (2) the predicted CEO pay ratio as determined by non-economic factors (the unfair component of CEO pay ratio). We test for the existence and relative importance of direct and indirect paths using two measures of employee satisfaction and two measures of firm performance. We find that pay equity, a larger CEO pay ratio driven by economic factors, is associated with employee contributions to better firm performance. Conversely, we show that pay inequity, a larger CEO pay ratio driven by non-economic factors, is associated with employees' contributions to poorer firm performance. Consistent with the view that managerial entrenchment may amplify the negative effects of the CEO pay ratio, we find that the negative indirect path between pay inequity and firm performance, mediated by employee satisfaction, is more pronounced in firms with entrenched CEOs. Our findings contribute to the accounting compensation literature because they are consistent with CEO pay ratio information having economic consequences.     

Organizational commitment and performance in a professional accounting firm

In recent years, the concept of employee commitment to the organization has received increased attention as a determinant of employee performance. Research on the relationship between these two variables, however, has produced conflicting results. The study reported herein examines the relationship between a group of antecedent variables and organizational commitment, and the relationship between commitment and employee performance. The study was carried out using a sample of 123 junior-level staff accountants and a validation sample of 46 senior-level accountants. It was found that for both samples, work-related antecedent variables influenced commitment whereas personal variables did not. With respect to the commitment-performance relationship, the results differed between the two samples. At the junior-level, performance was found to be influenced by a willingness to exert effort on behalf of the organization, whereas at the senior-level, performance was found to be influenced by a desire to maintain membership in the organization.