Behavioural effects of reliance on financial performance measures

a study of the financial services sector

Chong M. Lau, Shima M. Mahalingam

Research output: Contribution to journalArticle

Abstract

This study proposes that managers who participate in the development of their performance measures are likely to experience high job satisfaction if these measures are used to evaluate their performance. It also proposes that the motivation effects in the use of financial performance measures may be influenced by industry. Specifically, it proposes that managers from the financial services sector are likely to react more favourably to financial measures than nonfinancial measures. This is because these managers are routinely involved in finance and financial matters during the course of their work and therefore are likely to be relatively familiar with financial measures and evaluative styles that are financially oriented. Hence, it is likely that they may experience high job satisfaction if their performance evaluations are based on financial measures rather than on nonfinancial measures. The results of this study, which is based on a sample of 112 financial service sector managers, support these expectations.
Original languageEnglish
Pages (from-to)58-81
Number of pages24
JournalAccounting, accountability & performance
Volume12
Issue number2
Publication statusPublished - 2006
Externally publishedYes

Keywords

  • financial measures
  • financial services sector
  • performance evaluation
  • job satisfaction

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