Subjectivity in performance measurement practice: field study evidence of a role for relational contracting

Anne M. Lillis

Chapter 9 in Research Handbook on Performance Measurement for Management Control, 2024, pp 167-185 from Edward Elgar Publishing

Abstract: This chapter discusses a field study by Lillis et al. of subjectivity in performance measurement that documents performance measurement practices that engage with objective performance measures but impose a subjective overlay designed to enhance incentive and behavioral alignment. The study also documents the organizational arrangements that reduce the risk of errors and bias in subjective performance measurement. I draw on the findings of this study to discuss the way we understand the role of objective performance measures, the role of subjectivity and the way subjectivity is informed in common hierarchical organization settings. I suggest that the field observations are more consistent with the use of relational contracts to underpin performance measurement practice than with the use of explicit incentive contracts tied to objective performance measures.

Keywords: Business and Management; Economics and Finance (search for similar items in EconPapers)
Date: 2024
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