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Measuring general managers' performances Market, accounting and combination‐of‐measures systems

Measuring general managers' performances Market, accounting and combination‐of‐measures systems Purpose – This paper discusses how to choose a measure or set of measures for the purposes of evaluating and rewarding general managers' performances. Design/methodology/approach – The paper describes a set of criteria that is useful for evaluating any measure or set of measures. Then it applies the criteria to an evaluation of three measurement alternatives in common use at general management organization levels: market measures, accounting measures, and combinations of measures. Findings – The paper shows that all of the measurement alternatives fail to satisfy one or more of the evaluation criteria and, hence, lead to less than optimal outcomes. But it also shows that some alternatives are better than others in specific situations. Originality/value – While comprehensive sets of evaluation criteria have been applied to financial accounting choice issues, this is the first such approach in management accounting. This approach can lead to improved performance measurement system choices. It can also be used to guide future research because the analysis also reveals major gaps in our knowledge about the qualities of performance measures in common use. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Accounting Auditing & Accountability Journal Emerald Publishing

Measuring general managers' performances Market, accounting and combination‐of‐measures systems

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References (78)

Publisher
Emerald Publishing
Copyright
Copyright © 2006 Emerald Group Publishing Limited. All rights reserved.
ISSN
0951-3574
DOI
10.1108/09513570610709917
Publisher site
See Article on Publisher Site

Abstract

Purpose – This paper discusses how to choose a measure or set of measures for the purposes of evaluating and rewarding general managers' performances. Design/methodology/approach – The paper describes a set of criteria that is useful for evaluating any measure or set of measures. Then it applies the criteria to an evaluation of three measurement alternatives in common use at general management organization levels: market measures, accounting measures, and combinations of measures. Findings – The paper shows that all of the measurement alternatives fail to satisfy one or more of the evaluation criteria and, hence, lead to less than optimal outcomes. But it also shows that some alternatives are better than others in specific situations. Originality/value – While comprehensive sets of evaluation criteria have been applied to financial accounting choice issues, this is the first such approach in management accounting. This approach can lead to improved performance measurement system choices. It can also be used to guide future research because the analysis also reveals major gaps in our knowledge about the qualities of performance measures in common use.

Journal

Accounting Auditing & Accountability Journal – Emerald Publishing

Published: Nov 1, 2006

Keywords: Measurement; Performance; General management; Market yield; Accounting systems; Balanced scorecard

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