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Article
Publication date: 9 April 2021

Sophia Xia Su, Kevin Baird and Nuraddeen Nuhu

This study aims to examine the mediating role of the fairness of the performance evaluation system on the association between the controllability of financial and…

Abstract

Purpose

This study aims to examine the mediating role of the fairness of the performance evaluation system on the association between the controllability of financial and non-financial measures and managerial performance.

Design/methodology/approach

Data was collected using an online survey questionnaire, with 220 responses received from middle and lower-level managers in Australian manufacturing organisations. Covariance-based structural equation modelling using software AMOS 25 was applied to analyse the data. Specifically, Anderson and Gerbing’s (1988) two-step approach was followed with confirmatory factor analyses first conducted to ensure that the measurement model was valid and reliable before running the structural model.

Findings

The findings reveal that the influence of managers’ controllability of performance measures on managerial performance is enacted through their perceptions of fairness. Specifically, the impact of controllability of financial (non-financial) measures on managerial performance is enacted through managers’ perceptions of distributive (interpersonal) fairness.

Originality/value

The empirical findings contribute to the literature investigating the empirical consequences of managers’ controllability of performance measures on performance evaluation processes, with the results revealing that the controllability of both financial and non-financial performance measures is positively associated with managerial performance via managers’ perceptions of different dimensions of fairness. Such results suggest that organisations, most of which do not prioritise the use of controllable performance measures in the design of their performance evaluation systems, need to reconsider the importance of the controllability of both financial and non-financial measures in the performance evaluation processes.

Details

Meditari Accountancy Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2049-372X

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Book part
Publication date: 19 June 2012

Jennifer Kunz and Stefan Linder

Purpose – The controllability principle has attracted considerable attention in performance management research. Whereas this discussion hinges centrally on a conception…

Abstract

Purpose – The controllability principle has attracted considerable attention in performance management research. Whereas this discussion hinges centrally on a conception of human motivation, findings from psychological motivation research on intrinsic motivation have not received attention yet. Addressing this research gap, this chapter analyzes the effect of perceived controllability on extrinsic and intrinsic motivation and thereby on work effort.

Methodology/approach – We conducted a vignette study with undergraduate students of an accounting course in a German University in early 2009. Each participant was confronted with a written description of a hypothetical business situation (a vignette) on which the participants should base their further answers. These vignettes also contained a description of a remuneration system. Among other things, the degree of this remuneration system's controllability was varied from vignette to vignette. After reading the vignette each participant was instructed to answer some questions regarding his/her willingness to exert additional effort in the described situational context and the motivational reasons behind this willingness.

Findings – The study exhibits that a lack of perceived controllability has a negative impact on extrinsic, but also on intrinsic, motivation and thereby on work effort.

Originality – The findings put the current discussion into a broader perspective, as they suggests that adherence to the principle of controllability is not only warranted given the impact on extrinsic motivation as discussed in large parts of the literature but also for intrinsic motivation.

Details

Performance Measurement and Management Control: Global Issues
Type: Book
ISBN: 978-1-78052-910-3

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Article
Publication date: 28 October 2014

Morten Jakobsen and Rainer Lueg

This paper aims to analyse how the inherent design of the Balanced Scorecard (BSC) violates the controllability principle. The management control literature provides…

Abstract

Purpose

This paper aims to analyse how the inherent design of the Balanced Scorecard (BSC) violates the controllability principle. The management control literature provides convincing examples of actors who breach controllability without intention. This discussion was extended by the example of the BSC. This paper focusses on the breaches that occur when actors lack the awareness or the skills to re-enforce controllability.

Design/methodology/approach

Taking a pragmatic-constructivist position, analytical and empirical evidence was included on controllability to analyse the normative literature on the BSC.

Findings

It was found that the BSC causes several unintended breaches of the controllability principle at the level of middle managers, both ex ante (control rationale) and ex post (fairness rationale). These breaches are not only situational or induced by how managers in the field design a BSC. They appear to be inherent in the BSC due to the way Kaplan and Norton have conceptualised it.

Practical implications

Practitioners are alerted that the intuitive appeal of popular management fashions such as the BSC covers their conceptual flaws. It was also proposed that failed implementations and dysfunctional applications can be due to the inherent characteristics of the concepts themselves.

Originality/value

This paper contributes by uncovering the unintended violations of the controllability principle by the inherent characteristics. The authors suggest using our conceptual contribution to conduct empirical research on the issues of controllability and management control systems in general. Thereby, the theory-based discussion on the BSC is advanced (Nørreklit, 2000, 2003; Nørreklit et al., 2012a).

Details

Journal of Accounting & Organizational Change, vol. 10 no. 4
Type: Research Article
ISSN: 1832-5912

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Article
Publication date: 1 August 2008

Ronald L. Hess

This study seeks to investigate the impact of firm reputation for service quality on customers' responses to service failures. Firm reputation is defined as customers'…

Abstract

Purpose

This study seeks to investigate the impact of firm reputation for service quality on customers' responses to service failures. Firm reputation is defined as customers' perceptions of how well a firm takes care of customers and is genuinely concerned about their welfare.

Design/methodology/approach

An experiment design methodology was utilized to test the conceptual model. The respondents were adult passengers waiting for flights at a major airport.

Findings

Overall, the findings revealed that excellent reputations provide firms with a “buffering effect”, insulating them from some of the negative consequences of failures. Firm reputation moderated the relationship between failure severity and satisfaction, lowered attributions of controllability and stability, and led to higher repurchase intentions following service failures. Attributions of controllability and stability were related only to repurchase intentions; satisfaction did not fully mediate these relationships.

Research limitations/implications

A limitation is the use of an experimental methodology. Other methods would enhance the external validity of the findings.

Practical implications

The findings of this study provide compelling evidence that a firm's reputation can be one of its most important assets. Carefully building and maintaining this reputation is paramount for continued success in any industry, but especially important for service firms where failures are inevitable.

Originality/value

Very little research has examined the effects of firm reputation. This study contributes by testing the impact of firm reputation on customers' responses within a service failure context.

Details

Journal of Services Marketing, vol. 22 no. 5
Type: Research Article
ISSN: 0887-6045

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Article
Publication date: 22 November 2019

Sinikka Moilanen and Seppo Ikäheimo

This paper aims to interpret and compare managerial intentions for and employee perceptions of group-based incentive systems.

Abstract

Purpose

This paper aims to interpret and compare managerial intentions for and employee perceptions of group-based incentive systems.

Design/methodology/approach

The data comprise interviews with managers and employees in four Finnish firms with experience of company-wide incentive systems involving profit-sharing and team-based rewards. Benefitting from social exchange theory, managers’ intentions and employees’ perceptions are examined.

Findings

Managers’ and employees’ views resemble each other concerning profit-sharing as reflecting reciprocity rooted in perceived distributive fairness, whereas examination of the team-based rewards revealed impediments in reciprocity. While managerial intentions for team-based rewards refer to social exchange with economic intensity via selection of controllable performance measurements aimed at making individual-level effort count, the employees’ perceptions deem such metrics non-controllable, reflecting perceived distributive and procedural unfairness.

Practical implications

Profit-sharing seems to create fair social obligation and goal congruence between managers and employees, whereas team-based incentives easily suffer from unfairness, reducing their effectiveness.

Originality/value

Distinguishing between managerial intentions and employee perceptions pertaining to incentive systems facilitated in-depth exploration of the social exchange inherent in them, conceptualized in terms of economic intensity, fairness and controllability. With this lens, qualitative analysis revealed differences in interpretations of controllability and fairness between the managerial intentions and employee perceptions. The central contribution to scholarship takes the form of interpretations reflecting upon these key findings.

Details

Journal of Accounting & Organizational Change, vol. 15 no. 4
Type: Research Article
ISSN: 1832-5912

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Article
Publication date: 1 November 2002

Jungki Lee and Arthur Allaway

A new literature is emerging around the role of self‐service technologies (SSTs) such as airline ticketing machines, automatic teller machines, and computer‐based shopping…

Abstract

A new literature is emerging around the role of self‐service technologies (SSTs) such as airline ticketing machines, automatic teller machines, and computer‐based shopping services in the strategic offering of service providers. SSTs allow (or force) consumers to help produce their own service encounters via machine interaction rather than by interacting with a firm’s service personnel. Firms which introduce SSTs wish to gain rapid acceptance and usage of these technologies by potential consumers. This study investigates whether the provision of more personal control to consumers can reduce their perceived risk, enhance the perceived value of the SST, and induce greater adoption intention associated with the innovation. Propositions are tested using an experiment. Multiple analysis of covariance and follow‐up tests either fully or partially supported 11 out of 12 hypotheses. A set of managerial implications and recommendations is provided.

Details

Journal of Services Marketing, vol. 16 no. 6
Type: Research Article
ISSN: 0887-6045

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Article
Publication date: 10 July 2017

Willemijn van Dolen and Charles B. Weinberg

The authors investigate how employee social support impacts children’s perceptions of service quality of a child helpline chat service and the chatters’ immediate…

Abstract

Purpose

The authors investigate how employee social support impacts children’s perceptions of service quality of a child helpline chat service and the chatters’ immediate well-being. Specifically, the purpose of this study is to examine how action-facilitating support, nurturant support and emotional reflections influence the children and to test whether this impact varies depending upon the controllability of the issues discussed.

Design/methodology/approach

The authors develop hypotheses about the influence of social support and controllability on children’s perceived service quality and well-being. Chat conversations are coded on the social support given by the employee and the controllability of the issue. Questionnaires are collected to measure children’s service quality and well-being. Using structural equation modeling, hypotheses are tested with a sample of 662 children and chat conversations of a child helpline.

Findings

The study reveals that for children chatting about controllable issues, nurturant support and negative emotional reflections negatively influence the immediate well-being of these children. Positive emotional reflections positively influence immediate well-being. For children chatting about uncontrollable issues, nurturant support and negative emotional responses positively influence the perceived service quality.

Originality/value

This study contributes to the services marketing literature by broadening the current understanding of the impact of social support on children’s service quality perceptions and well-being, and by showing how this impact is moderated by the level of controllability of the issue discussed.

Details

Journal of Services Marketing, vol. 31 no. 4/5
Type: Research Article
ISSN: 0887-6045

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Article
Publication date: 9 November 2015

Víctor Iglesias, Concepción Varela-Neira and Rodolfo Vázquez-Casielles

– The purpose of this paper is to analyze the effects of attributions on the efficacy of service recovery strategies in preventing customer defection following a service failure.

Abstract

Purpose

The purpose of this paper is to analyze the effects of attributions on the efficacy of service recovery strategies in preventing customer defection following a service failure.

Design/methodology/approach

The empirical investigation is carried out on the retail banking industry with a final sample of 448 real cases of customer retention or defection after a service failure.

Findings

The results of the study not only highlight the relevance of intentionality as an additional factor in explaining customer defection, but also show the effects of some attributional dimensions (intentionality and controllability) on the efficacy of some recovery strategies (redress, apology and explanation) applied by companies to prevent post-complaint customer defection.

Practical implications

The efficacy of the recovery strategies depends on the causal attributions that the customer makes about the service failure.

Originality/value

This study analyzes not only the effects of traditional dimensions of attribution (stability and controllability), but also the additional effect that intentionality attributions may have on actual customer defection (not intentions). Moreover, it analyzes their effects on the effectiveness of recovery strategies in preventing customer defection. Most of these effects have never been empirically analyzed in the literature.

Details

Journal of Service Theory and Practice, vol. 25 no. 6
Type: Research Article
ISSN: 2055-6225

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Article
Publication date: 8 October 2018

Charles Amoatey and Doreen Danquah

The purpose of this paper is to analyse project risks in Ghana’s real estate construction industry in terms of likelihood of occurrence, severity of impact and controllability.

Abstract

Purpose

The purpose of this paper is to analyse project risks in Ghana’s real estate construction industry in terms of likelihood of occurrence, severity of impact and controllability.

Design/methodology/approach

A quantitative research approach was used in this study to address the research objective. The study population consisted project managers, architects, surveyors and contractors from 17 members of the Ghana Real Estate Developers Association (GREDA) in Ghana. Random stratified sampling technique was used to select 97 participants from these firms. A structured questionnaire was used to collect primary data, whereas descriptive statistics were used to present findings.

Findings

All risks identified have some level of likelihood of occurrence, extent of severity of impact and controllability. Market risks, technical risks and environmental risks are more likely to occur. Market risks, technical risks and environmental risks had the highest severity of impact. Financial risks, market risks, managerial risks and technical risks are the most controllable. Among all risks, environmental risks are the direst because they have high likelihood of occurrence and severity of impact but very low controllability. Real estate construction firms (developers) are therefore expected to prioritize remedy of environmental risks.

Research limitations/implications

The study is based on self-reported perception of project parties on the likelihood, severity of impact and controllability of real estate project risk factors. Firms outside of GREDA were not included in the survey. Therefore, generalisation of these risk factors for the entire construction industry should be done with caution.

Practical implications

The research results show that Ghanaian real estate developers are aware of the existence of the risks which impact on the performance of the industry. To effectively and efficiently manage these risk factors, project parties must understand the likelihood of occurrence, severity of impact and controllability of the risk factors, as well as individual firm’s responsibilities and capabilities to manage them. Such knowledge helps project managers to prioritise risks in managing them in the face of scarce resources. From an academic research perspective, the paper contributes to a conceptual risk assessment framework for the real estate industry.

Originality/value

The paper’s main contributions relate to the introduction of real estate construction sector-specific factors to project risk management modelling.

Details

Journal of Facilities Management, vol. 16 no. 4
Type: Research Article
ISSN: 1472-5967

Keywords

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Book part
Publication date: 19 June 2012

Daniela Ruggeri

Purpose – Accounting research has long shown the effect of subjectivity in performance evaluation. This study investigates one form of subjectivity in performance…

Abstract

Purpose – Accounting research has long shown the effect of subjectivity in performance evaluation. This study investigates one form of subjectivity in performance evaluation: flexibility in weighting performance measures examining decisions made by supervisors about weighting. Empirical studies show that the performance-measure weights are only partially consistent with the predictions of the agency theory and they are a still outstanding issue.

Methodology/approach – We develop an experiment to analyse supervisor decision-making, manipulating two factors: internal organisational interdependence and the level of managerial performance. We derive hypotheses along with both economic and behavioural approaches. The economic approach is based on agency theory predictions and the controllability principle while the behavioural approach is drawn on the organisational justice theory. We argue that in low interdependence contexts the supervisor's decision confirms the agency theory predictions, while in high interdependence conditions weighting decisions could be driven by behavioural considerations of fairness perceptions of the evaluation process and the level of managerial performance.

Findings – We find that in low interdependence contexts the supervisor's decision confirms the agency theory predictions, while in high interdependence contexts it does not. The results indicate that the supervisor's decision stems from the integration of economic and behavioural perspectives.

Research and social implications – The theoretical framework can be useful for interpreting the supervisor decision-making and the weighting process.

Originality – The economic and behavioural approaches allow us to understand flexibility in weighting performance measures suggesting that, in addition to economic considerations, a behavioural perspective may also be relevant in explaining subjective weighting.

Details

Performance Measurement and Management Control: Global Issues
Type: Book
ISBN: 978-1-78052-910-3

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