Performance Measure Congruity and the Balanced Scorecard

Budde, Jörg

doi:10.1111/j.1475-679x.2007.00246.x

Cited by 73 publications

(44 citation statements)

References 32 publications

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“…The effect of performance reports on peers and the openness of information policies are only two important aspects that require attention. Other potentially fruitful avenues for future research include the number and types of performance measures (Ittner and Larcker [2002], Budde [2007]), the relation between performance and pay in incentive contracts (Fehr and Fischbacher [2002]), and the level of subjectivity in evaluation decisions (Ittner, Larcker, and Meyer [2003], Rajan and Reichelstein [2006]).…”

Section: Discussionmentioning

confidence: 99%

How Control System Design Influences Performance Misreporting

Maas

Rinsum

2013

J of Accounting Research

107

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This paper investigates reporting honesty when managers have monetary incentives to overstate their performance. We argue that managers who report about their performance will take into account how their report affects their peers (i.e., other managers at the same hierarchical level). This effect depends on the design of the organization's control system, in particular, on the reward structure and the information policy regarding individual performance reports. The reward structure determines if peers’ monetary payoff is increased or decreased when managers claim a higher level of performance. The information policy determines if managers will be able to link individual peers to their reports and affects the nonmonetary costs of breaking social norms. We present the results of a laboratory experiment. As predicted, we find that participants are more likely to overstate their performance if this increases the monetary payoff of others than if their reported performance decreases others’ monetary gains. In addition, overstatements are lower under an open information policy, where each individual's reported performance is made public, compared to a closed information policy, where participants only learn the average performance of the other participants. Our findings have several important implications for management accounting research and practice.

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Section: Discussionmentioning

confidence: 99%

How Control System Design Influences Performance Misreporting

Maas

Rinsum

2013

J of Accounting Research

107

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“…Over time, countless critics to those models appeared, causing the theory to currently give supremacy to performance evaluation models that simultaneously include financial and nonfinancial measures (BANKER; MASHRUWALA, 2007;CORONA, 2009;GEER;TUIJL;RUTTE, 2009). Within this type of models the Balanced Scorecard stands out (BUDDE, 2007;DILLA;STEINBART, 2005;ITTNER;LARCKER;MEYER, 2003;JOHANSON et al, 2006;KAPLAN, 1994;NORTON, 1992NORTON, , 1993NORTON, , 1996aNORTON, , 1996bNORTON, , 1996cNORTON, , 1996dNORTON, , 2001a2001b;NORTON;BJARNE, 2010;SALTERIO, 2000;PANDEY, 2005;HIBBETS, 2004).…”

Section: Literature Reviewmentioning

confidence: 99%

Balanced Scorecard: an empirical study of small and medium size enterprises

Machado¹

2013

RBGN

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“…Budde () argues that nonfinancial measures are often nonverifiable and thus using these measures for contracting purposes might be difficult (see also Ball ). Budde goes on to demonstrate that in such circumstances alignment of interests between the principal and agent might not be achieved.…”

Section: Hypothesis Developmentmentioning

confidence: 99%