Evaluating Conflicting Performance on Driver and Outcome Measures: The Effect of Strategy Maps
47 Pages Posted: 16 Aug 2010 Last revised: 4 Jun 2012
Date Written: March 9, 2012
Abstract
This study examines how strategy maps affect balanced scorecard (BSC) evaluators’ assessments of managerial performance when there is inconsistent performance on the driver and outcome measures. We find that, when managers achieve target levels of performance on driver but not outcome measures, strategy maps do not influence the average level of evaluators’ bonuses, evaluations, or beliefs about the reasons for the inconsistent performance pattern. However, strategy maps influence how evaluators weight their beliefs when making bonus and evaluation decisions. Specifically, evaluators with strategy maps placed less weight on their beliefs about uncontrollable factors, and more weight on their beliefs about whether the poor outcomes were due to flawed strategies and misestimated time lags. Thus, strategy maps affect how evaluators implement control over the BSC strategy. These findings are significant, because the associations between beliefs and decisions will likely be communicated during performance evaluation, and these communications will likely affect future actions taken by the manager.
Keywords: Balanced scorecard, strategy map, performance measurement
JEL Classification: M41
Suggested Citation: Suggested Citation