| Summary: |
Criticisms directed at the use of financial measures alone for performance evaluation have led to much interst in the use of nonfinancial performance measures to balance the financial measures. Hence, much recent researh has beend dircted to investigate the effectiveness and behavior consequences of a mix of financial and nonfinancial measures (e.eg. the Balanced Scorecard approach) in contemporary setting. Howevr, there is evidence from prior studies to suggest that the manner or how performance measures are used may affect the subordinates' behavior and work-related attitudes idirectly through the subordinates' perception of the justness of these measures and the interpersonal trust these measures promote. There is also evidance to indicate that it is the extent of the subordinates' agreement with the performance measures used in the evaluation, rather than the measures per se, which affects their behavior and work-related attitudes. Subordinates are more likely to agree with performance measures which they regard as fair and which enhance their trust in their superiors. This study therefore investigates if the effects of a mix financial and nonfinancial measures (such as those used in the Balanced Scorecard approach) on subordinates' job satisfaction are indirect through the subordinates' perception of the greater extent of fairness (justness) in the evalution process and the grather extent of trust such a mix of measures promotes. The results, based on a sample of 70 managers, support the expectation that a mix of financial and nonfinancial has no direct effect on subordinates' job satisfaction. Instead, the effects of such a mix of performance measures o subordinates' job satisfaction are indirect through the enhancement of the subordinates' favorable perception of procedural fairness and inverpersonal trust.
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