The Relationship between a concern for the maintenance of workplace fairness and managerial performance

Prior studies suggest that performance measures can significantly influence employee behaviours and performance. However, the issue of how performance measures are chosen in the first instance is often overlooked. What factors influence how performance measures are chosen? This is an important unanswered research question. This study proposes that an organisation’s concern for workplace fairness can influence its choice of performance measures. Organisations are concerned with workplace fairness because they cannot function effectively if their employees perceive unfairness in the workplace. The use of financial measures alone may have limitations and may be perceived as unfair. In contrast, a comprehensive set of performance measures comprising both financial and nonfinancial measures may be perceived as fair because such systems are likely to capture a broader, more complete and hence a more accurate evaluation of employee performance. Hence, organisations that are concerned with workplace fairness are likely to choose performance measurement systems that are comprehensive comprising both financial and nonfinancial measures. Based on a sample from 276 managers, the results indicate that organisational concern for maintaining workplace fairness is positively associated with comprehensive performance measures and ultimately employee job satisfaction and performance. These results underscore the importance of workplace fairness in influencing the choice of management control systems.