Fad and fashion? The relevance of subjective performance measures

Abstract

Purpose The purpose of this paper is to investigate the effect of the use of subjective (objective) performance measures on relevant organisational outcomes, namely perceived managerial discretion (PMD) and manager’s satisfaction with the performance measurement system (PMS). Furthermore, the paper analyses the indirect link between subjective vs objective measures and managers’ satisfaction through PMD. Design/methodology/approach To test the research hypotheses, a paper-based questionnaire was sent to Italian health care managers in Lombardy. Thus, a PLS-SEM analysis was performed on a data set of 97 Italian health care managers. Findings Empirical findings showed that objective measures are more capable of supporting the managerial perception of discretion when compared to more subjective ones such as “fads” and “fashions”, and that managers are more satisfied with the PMS when it is grounded on objective measures rather than subjective ones. Originality/value The paper operationalizes and empirically tests the measure of PMD, linking this to antecedents and consequences. It also extends the literature on subjectivity in the PMS, since it develops new knowledge on the choice between subjective and objective measures by applying this choice to a variety of PMS, whereas prior literature on objective vs subjective measures has mainly focussed on performance evaluation.

A behavioral theory of patent application rhythm

“…Further research can examine other sources of discretion, such as task environment. Moreover, as perceived managerial discretion captures the psychological aspect of CEO discretion (Demartini and Trucco, 2018), future research can launch surveys to collect data for measuring perceived managerial discretion and examine its effect.…”

“…Managerial discretion is defined as “latitude of managerial action” (Hambrick and Finkelstein, 1987), i.e. the degree to which CEOs are able to exert control over their firms (Demartini and Trucco, 2018; Wangrow et al , 2015). Higher discretion not only provides CEOs with a wider range of options (Campbell et al , 2012) but also enables CEOs to have more power to execute their choices of options (Hambrick and Abrahamson, 1995).…”

Energy-Efficient Products and Competitiveness in the Manufacturing Sector

“…For companies operating in dynamic markets, it is necessary to supplement objective economic and technical indicators with subjective data that reflect the perceptions of key personnel. This study recognizes that subjectivity in performance measurement should be treated with caution, as its use is simultaneously valuable and problematic, and one may note that scholars have investigated the benefits and drawbacks of both objective and subjective measures, with results that remain debatable [29]. If well-defined, subjective indicators tend to reflect related objective information: for example, a recent study confirms a positive correlation between subjective and objective business performance [30].…”

Designing employee performance evaluation model in Isfahan municipality: an interorganizational experience

“…productivity) are instead grounded on more verifiable facts since several scholars have investigated the benefits and hazards of both objective and subjective measures in the private and public sectors. Empirical findings showed that objective criteria are more capable of supporting the managerial perception of discretion when compared to more subjective criteria, and that managers are more satisfied with the PMS when it is grounded on objective criteria rather than subjective ones (Demartini and Trucco, 2018). But results are still open to debate.…”