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This study examines the effect of employees' perceptions of political connections on performance measurement systems (PMS) design choice and firm performance. In addition, this study explores the moderating effect of social networking, a very common and widely used factor by domestic and foreign multinational firms operating in China, and its joint effect with political connections or PMS design choice on firm performance. We collected survey responses from a sample of 110 managers from manufacturing firms in China. Our results reveal that highly politically connected managers use nonfinancial measures, leading to improved firm performance. Our results suggest that social networking interacts significantly with political connections, and nonfinancial and financial measures on firm performance. The theoretical and practical implications of our findings are discussed.

Purpose – The adoption of performance measurement and evaluation systems comprising nonfinancial measures has rendered the investigation of behavioral consequences of such measures an increasingly important research issue. The purpose of this study is to investigate the process by which the use of nonfinancial measures affects employees’ perceptions of procedural fairness. It proposes that the effects of nonfinancial measures on procedural fairness are indirect through the mediating variables of (1) job relevant information and (2) role clarity.

Methodology – Data collected from a survey of 276 managers in different functional areas are used to test the models. The data are analyzed using structural equation modeling (Partial Least Square).

Findings – Results from structural models indicate that the use of nonfinancial measures has a positive impact on job relevant information, role clarity, and procedural fairness. In addition, the findings suggest that the use of nonfinancial measures is indirectly related to procedural fairness through job relevant information and role clarity. Specifically, the results indicate that the use of nonfinancial measures affects job relevant information. Job relevant information then influences role clarity. Role clarity, in turn, is positively related to procedural fairness.

Value of paper – This study provides systematic empirical evidence on how the use of nonfinancial measures for performance measurement and evaluation can affect employee perceptions of procedural fairness. It helps organizations to understand how this process occurs and provides them with some assurance that the adoption of nonfinancial measures may be beneficial particularly through the higher information content of such measures and the consequential enhancement of employee role clarity and perception of fairness. By studying the effects of nonfinancial measures, in isolation, this study also helps to demonstrate to organizations that some of the beneficial effects on employee outcomes found by prior management accounting studies involving a combination of financial and nonfinancial measures may be achievable from the use of nonfinancial measures alone without the need of financial measures. This may assist organizations in designing simpler performance measurement systems.

Schiff and Hoffman (1996) found evidence that nonfinancial measures explain more of the variance in evaluations that focus on individual retail department managers while financial measures explain more variance in evaluations of the overall department. These findings are consistent with Attribution Theory, which holds that evaluators of performance ascribe cause to individual or environmental factors as they make judgments. This study expands this research by being the first to examine whether financial and nonfinancial measures affect multidivisional balanced scorecard performance evaluations differently when the focus of the evaluation is on the individual division president versus when the focus is on the overall division. The results of this study suggest that when evaluating individual performance, nonfinancial measures clearly affect the performance evaluations more than financial measures. When the focus is on the division, the influence of nonfinancial and financial measures is not differentiated. Additionally, the results suggest that the participants perceived nonfinancial measures to be more controllable than financial measures.

Purpose – The purpose of this study is to investigate the process by which nonfinancial performance measures affect employee perceptions of how fair are their organizations' performance evaluation procedures. With increased interest in performance measurement systems that rely heavily on nonfinancial measures (e.g., balanced scorecard), it is important to understand the ramifications of these measures.

Methodology – Data are drawn from mail survey questionnaire responses of 121 Australian managers and analyzed by structural equation modeling.

Findings – The results provide support for the proposition that employees perceive the use of nonfinancial measures as fair. However, these effects are found to be indirect through (1) the enhancement of employee role clarity, and (2) the enhancement of the trust the employees have in their supervisors.

Research limitations and practical implications – This study does not directly address the issue of whether nonfinancial measures will ultimately lead to improved overall organizational performance. However, the results do suggest that the use of nonfinancial measures for employee performance evaluation is beneficial. Hence, there may scope for increasing their role in the workplace. This may ultimately lead to improved organizational performance.

Value of paper – The current interest in multidimensional performance systems clearly necessitates systematic empirical investigation to ascertain their effectiveness and benefits. This study contributes in this regard by focusing on nonfinancial measures, a key component of multidimensional performance measurement systems. It also adds to our understanding of the process by such systems influence employee reactions and ultimately overall organizational performance.

The widespread adoption of the Balanced Scorecard has led to a need to understand how performance measures affect employees’ attitudes and behaviors. Despite the growing trend in the implementation of the Balanced Scorecard, there is little research evidence available on the behavioral outcomes resulting from the use of nonfinancial performance measures. This study seeks to address this gap by examining several behavioral outcomes, including job satisfaction, organizational commitment and managerial performance, resulting from the use of financial and nonfinancial performance measures.

Data were collected using a mailed questionnaire survey to manufacturing organizations in Singapore. Path analysis technique was employed in this study to investigate the relationships.

The results of the study show that behavioral outcomes are indifferent regardless of the nature and type of performance measures used. However, the relationships between performance measures and behavioral outcomes are indirect through procedural fairness and trust in supervisor.

Survey questionnaire method was used in this study and there are limitations associated with survey questionnaire method. As our sample was selected from large organizations, it is unclear if our results are generalizable to small organizations. Also, as our sample was selected from the manufacturing sector, generalizing our results to the nonmanufacturing sectors should be made with caution.

This study highlights the need for organizations to pay attention to issues pertaining to procedural fairness and interpersonal trust in the design and implementation of performance measurement systems.

In the growing debate about designing new management control systems (MCS) to include stakeholder values, there has been little discussion about information overload. Stakeholder advocates call for including more environmental and related social disclosures but do not consider how information overload might impair the use and interpretation of corporate performance measures. As we know, shareholders and boards of directors are most concerned with market data such as earnings per share, dividend rates, and market value growth. In this chapter, we assert that management control system designers must consider information overload before expanding the MCS to include social and nonfinancial disclosures.

The paradox in expanding MCS is that demand for sustainability performance measures will likely result in overload for both information preparers and information users. Corporate Social Responsibility (CSR) and similar sustainability disclosures are likely to overload MCS and overwhelm the readers and users by performance reports that include multiple dimensions.

CSR affects the design of companies' annual reports because stakeholders are increasingly concerned with how organizations address their social responsibilities and how they disclose their societal responses. Management accountants are accustomed to providing performance measures within an organization and MCS usually have an internal focus. CFOs are often not accustomed to balancing the needs of stakeholders with those of managers and owners. We suggest that companies and CFOs will face an information overload dilemma in making these determinations, and that users will be overloaded in sifting through the multiple dimensions of information that are increasingly being provided. We suggest that the bias toward financial performance measures will distort both the provision of relevant information and the use of sustainability performance measures. We modified the Epstein and Roy sustainability model (2001) to illustrate some of these potential impacts.

We note that the balanced scorecard (BSC) was developed as one such tool to reflect and communicate multiple measures. We summarize a previous study showing how managers ignored multiple performance measures in a performance scorecard study. We then relate our results to some of the information overload literature to support our suggestion that stakeholders will face many of the same information overload issues and constraints when using and processing social disclosures.

Our summary of the information overload literature results in a call for more interdisciplinary information overload research involving real-world contexts and tasks. We note that most of the extant information overload literature is restricted to discipline-based silo-oriented studies and to simplistic evaluations, brand identification, or forecasting tasks. Our study went into some depth to describe the business, its strategies and objectives, and a comparison of actual results to specific goals. As management control systems evolve or are designed to report sustainability data, the issues surrounding increasing complexity and information overload will become exponentially problematic. We suggest that future research also include consideration of information overload conditions facing preparers and disclosers of sustainability measures.

The purpose of the research is to analyse the ability of nonfinancial factors to predict value creation in Finnish technology firms. Nonfinancial factors are defined in terms of a large set of variables on organizational characteristics, strategy, competitive stance, consistency of performance measurement, management control systems (MCSs), and quality of MCSs. Financial ratios are used as a benchmark. The hypotheses are that, firstly, nonfinancial factors include important information for prediction and, secondly, that they provide incremental information over financial ratios. The nonfinancial variables are drawn from a postal survey carried out in 1999. Financial variables for 1998–2001 are obtained for 40 private firms of the 110 firms responding to the survey. Shareholder value is estimated on the basis of the four‐year financial data for 2001. This value divided by the shareholder book value (estimated‐to‐book value ratio, EBV) as well as its drivers are predicted by past non‐financial and financial data. Partial Least Squares (PLS) method is used to analyse the importance of information in prediction. The results give support to the hypotheses. Moreover, the results show that nonfinancial factors yield important incremental information over financial ratios when predicting value drivers, that is, growth, profitability, and risk. Especially, financial ratios are weak in predicting growth.

The purpose of this study is to examine the role of financial and nonfinancial information in determining individual investor's investment decisions by analyzing the mediating effect of corporate reputation.

The approach of this study is deductive; therefore, the quantitative strategy is used for data collection. Primary data are collected from individual investors actively involved in stock trading at Pakistan Stock Exchange (PSX). Structural equation modeling is used to assess structural relationships.

The key findings of this study posit that financial and nonfinancial information positively influence an individual investor's investment decision. This study also provides empirical evidence confirming the mediating role of corporate reputation. Categorically, the findings indicate that financial and nonfinancial information remain significant to build perceived corporate reputation and influence investor's investment decisions.

he proposed model presents novel insight into the individual investor's investment decision in the context of Pakistan. The findings of this study remain robust for firms listed on the stock exchange and individual investors involved in stock trading. The results of this study are substantial to individual investor's and broker for making informed financial choices. Moreover, the firms listed on the PSX can use the findings to establish improved corporate reputation through reporting detailed financial and nonfinancial information.

Studies based on subjective measures in finance are lacking. This study contributes to the existing literature of behavioral finance by analyzing variations in investor's investment decisions explained by informational factors. The proposed model testifies the mediating role of corporate reputation in guiding investor's investment decisions, which has been overlooked by past studies. Therefore, this study seeks to fill this gap in the context of the PSX.

The Agenda 2030 have drawn a lot of interest in academic studies. This necessitates accounting research on nonfinancial reporting and sustainable development goals (SDG) disclosure in an under-investigated context. The purpose of this study is to examine the contribution of nonfinancial reporting practices to SDG disclosure by 120 companies from 12 African nations for the years 2016 to 2020.

The study uses a content analysis to gauge how much information are disclosed on SDG by the selected firms. The authors carried out content analysis using the global reporting initiative frameworks to determine the level of SDG disclosure across the companies by examining the selected nonfinancial reports.

Sustainability reports account for 50% of such SDG disclosure making it the highest. This is followed by corporate social responsibility report which accounts for 23%, while environmental reports account for 20% and Chairman’s statement accounts for 7%. The result is expected since corporate sustainability report has been the major channel for disclosing activities relating to social and governance issues in recent times.

The results of this study demand that corporate entities in Africa take responsibility for their actions and exert significant effort to achieve the SDG. While the government has the main responsibility, corporate entities must support the SDG to be realized.

To the best of the authors’ knowledge, this study is one of the few studies that examines nonfinancial reporting practices with a focus on SDG disclosure. In addition, this study offers novel insight into how accounting research contributes to nonfinancial reporting practices and SDG disclosure.

This paper examines potential cognitive difficulties inherent in the use of performance measurement systems. We examine the potential for emphasizing financial measures as compared to nonfinancial measures in the evaluation of an organization's overall performance. The results suggest that users of performance measurement data will emphasize historical financial measures. Two separate experiments provide additional evidence that users of performance measurement data suffer a halo bias, in that an organization's performance on financial measures appears to influence their perception of the organization's performance on nonfinancial measures.