1 Do Sustainability Measures Matter in Managerial Appraisal and Rewards?

Abstract

This experimental study examined whether sustainability performance measures matter in managerial appraisal and bonus decisions. Participants received financial and non-financial information about four branch managers of a commercial bank, with different combinations of sustainability and financial performance. Participants perceived sustainability measures as being less important than financial ones; still, the experiment revealed that sustainability performance had some impact on appraisal and bonus decisions (albeit it mattered less than financial performance). Evaluators seemed to penalize inferior sustainability performance less than they penalized inferior financial performance. They also seemed to reward sustainability success less than financial success. These findings have practical implications for the implementation of sustainability measures in managerial evaluation systems. The experimental results indicated that incorporating these measures in evaluations does not necessarily mean they will have a sizable effect in decision-making. Results from a companion experiment suggested that organizations using a sustainability balanced scorecard for appraisal and bonus purposes might benefit from an increased emphasis on communication and evaluator training, with a focus on how sustainability performance impacts the attainment of strategic objectives.

Multi-objective multi-product sustainable newsvendor management in an emerging economy: Evidence and applications

“…Beyond its theoretical and practical discussions, the main idea is that while some organizational participants believe that sustainability is less important than financial performance (Bento et al, 2019), some other drivers have reinforced organizations to concern it in their decisions (Lozano and von Haartman, 2018). Inventory management and newsvendor problem have gained a lot of consideration due to their effective role towards sustainability and play an important role in the adoption and implementation of sustainability based on the triple bottom line (TBL) model (Agrawal & Singh, 2019).…”