Tools for Business Climate Transformation: Regional Aspect

Nonfinancial and financial performance measures: How do they affect employee role clarity and performance?

An Empirical Investigation of an Incentive Plan Based on Nonfinancial Performance Measures

Incentive Instruments and the Weighting of Performance Measures

This research aims to examine the effect of bonus contracts that use financial and non-financial performance measures and examine the impact of implementing AKHLAK culture on earnings management in state-owned enterprises. In addition, this research aims to evaluate the effectiveness of implementing GCG in mitigating earnings management behaviour. To achieve the objectives of this research, we used a sample of 32 state-owned companies from 2017 to 2022 with a total of 178 data points. The analysis uses path examination to measure the influence between variables. We have found that Chief Executive Officer (CEO) career and culture negatively influence earnings management, whereas bonuses have no effect. We have also found that GCG moderates bonuses on earnings management but does not moderate CEO career and culture on earnings management. These findings have demonstrated that CEO bonus contracts based on financial and non-financial performance measures do not motivate CEOs to manage accrual earnings. The results of this research provide input for the government to increase the implementation of AKHLAK culture and appoint career directors in state-owned companies. The results of this research also provide empirical evidence that giving bonuses does not affect earnings management behaviour of the bonus contract is based on financial and non-financial performance. The results of this research are expected to provide advice to shareholders on how to use financial and non-financial measures in bonus contracts simultaneously.

Firms are increasingly implementing new performance measurement systems to track nonfinancial metrics such as customer and employee satisfaction, quality, market share, productivity, and innovation. This study examines the implications of nonfinancial performance measures included in compensation contracts on current and future performance. Contextual factors, environmental factors, and strategic plans vary across firms and, in turn, adopting appropriate nonfinancial measures determines the performance consequences of such measures. Our findings support the contention that firms that employ a combination of financial and nonfinancial performance measures have significantly higher mean levels of returns on assets and higher levels of market returns. Although we find evidence that the adoption of nonfinancial measures improves firms' current and future stock market performance, we find only partial support for accounting performance improvements. Overall, the results indicate that the association between the use of nonfinancial measures and firm performance is contingent on the firm's operational and competitive characteristics.

System Dynamic Modelling for a Balanced Scorecard: With a Special Emphasis on Skills, Customer Base, and Wip

The prevailing literature and empirical studies on management of organizational performance stress the increasing importance of non-financial performance measures and propose companies to implement some kind of integrated performance measurement system. The purpose of our study is to investigate the characteristics of performance measurement and management in large Slovenian companies, focusing also on the progress made in the 5-year period. The analysis is based on two surveys conducted in the spring 2003 and summer of 2008. We investigate what do companies understand by “successful performance”, what are the most and the least important performance measures for companies, and what performance measurement systems do companies use. By answering these questions we discuss the impact of our results on the future development and growth of firms. The research results show that large Slovenian companies consider “successful performance” mostly in terms of implementing the strategy, followed by pursuing the goals of the owners and achieving the goals of different stakeholders. Most large Slovenian companies perceive financial performance measures as more important than non-financial, although they claim they measure both perspectives of their business. Our research results also suggest that 68% of large Slovenian companies in our sample use balance scorecard or some other integrated performance measurement system. These findings are generally in line with the existing theory and empirical evidence from other countries. Our main conclusion is that the prevailing role of financial key performance indicators in large Slovenian companies is appropriate for monitoring the effects of the current financial crisis but if companies want to succeed in the long-run they have to base their decisions also on non-financial measures that enable monitoring of many important capabilities for achieving long-term strategic goals.

The research relevance is caused through attaching the big importance to foreign economic activity (FEA) stimulation in the Russian economy. FEA institutional factor (stimulating norms, rules, mechanisms) will be developed including on the regional level. The article’s purpose: to estimate this factor’s influence on FEA. Scientific novelty and importance of results consist in implementing such estimation by complex inclusion of variety of displays of institutional support’s factor. Research methods included the quantitative and “qualitative” analysis, including on basis of statistical analysis, content analysis of legal documents, reports and press releases of assistance institutions: the analysis of dynamic series by indicators of international exhibition’s effect (contracts’ number, regional export); the analysis of statistics and branch structure of export and investment contracts, concluded by various support forms; the analysis of indicators of development of FEA’s material infrastructure. Analysis on example of Sverdlovsk region Russia’s has shown: all considered institutional factor’s displays will be actively realized and bring appreciable positive effect – quantitative and qualitative, sometimes remote in time. The fastest effect will be brought by assistance to enterprises’ business communication. Results can be used by both FEA support system and business by planning the increasing the fullness of use of FEA assistance effect.

In this paper, I examine the incentive effects of both performance measures and performance targets and the linkages between these two components of the incentive system. Furthermore, I examine the theoretical claim that non-financial performance measures provide subordinate managers with incentives to be long-term oriented. Finally, I examine the role of risk aversion in setting performance targets. The empirical results show that the short-term orientation of subordinate managers increases (decreases) with the difficulty of financial (non-financial) performance targets but is not related to the use of either financial or non-financial performance measures for incentive purposes. Further, the difficulty of financial (non-financial) performance targets increases with the use of financial (non-financial) performance measures for incentive purposes, which suggests that performance measures have an indirect effect on managerial behavior. Finally, the relationship between the use of performance measures and performance target difficulty is moderated by the risk aversion of the manager. That is, the relationship is less positive the higher the manager’s risk aversion, which implies that superiors take the risk imposed on the manager into account when setting targets.

SUMMARY Prior research finds that companies committing fraud exhibit large inconsistencies between reported revenue growth and growth in revenue-related nonfinancial measures (e.g., number of stores, employees, patents). Prior research also suggests that auditors, on average, are not adept at identifying and constraining these differences. This article summarizes a recent study by Brazel and Schmidt (2018) that examines whether certain auditors and audit committees are able to lower fraud risk by constraining inconsistencies between financial and related nonfinancial measures (NFMs). This practitioner summary first summarizes the motivation for the study, then discusses the methods used, explains the results, and concludes with a discussion of the study's implications. Brazel and Schmidt (2018) find that auditors with greater industry expertise and tenure, and audit committee chairs with greater tenure are less likely to be associated with companies that exhibit large inconsistencies between their reported revenue growth and related NFMs (higher fraud risk). Surprisingly, they observe that audit committees with industry expert chairs are more likely to be associated with large inconsistencies than audit committees without industry expert chairs. Overall, Brazel and Schmidt (2018) conclude that the audit process can constrain fraud risk, but not all forms of audit committee expertise may be beneficial.

This study examines the effect of the use of multiple performance measures (a combination of financial and non-financial measures) in performance evaluations on subordinates’ job-related tension. Specifically, this study investigates whether the effect of such measures is indirect through interpersonal trust. This study hypothesizes that the relationship between multiple measures-based performance evaluation and subordinates’ job-related tension is indirect through subordinates’ interpersonal trust towards their superiors. The results, based on a sample of 70 managers, support the expectation that the use of a mix of financial and non-financial measures in performance evaluations has no direct effect on subordinates’ job-related tension. Instead, the effect of such a mix of performance measures on subordinates’ job-related tension is indirect through interpersonal trust.

Tech start-ups have various needs, both financial and non-financial. Like financial support, non-financial support needs contribute to the success of tech startups. It is crucial to understand the tech start-ups’ non-financial needs. A qualitative study was conducted with eight digital entrepreneurs (DEs) of tech start-ups in South Africa. The study aimed at investigating the different non-financial support needs tech start-ups have and the non-financial support they have received. Virtual semi-structured interviews were conducted with the DEs to understand the non-financial support they received and wish to receive. Non-financial support needs were identified, including branding, legal, access to market, mentoring, coaching, advisory support, and access to incubators and technology hubs. The legal support was identified as beneficial as it provided tech start-ups with the regulations needed to be followed for their tech start-up. The study also made recommendations.

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.

The objective of this study is to examine the effect of performance measurement system design on market orientation behavior.The data were collected using mail survey to top management of Malaysian listed companies.The results show that non-financial measures have a positive and significant relationship with market orientation.An implication of these findings is that the managers should include both financial and non-financial measures in designing their PMS.Theoretically, this study contributes to the resource-based theory by identifying PMS as an antecedent to build market orientation and thus contribute to develop an organizational competitive advantage.

The article is devoted to the analysis of modern problems and prospects of the organization and implementa-tion of public control over foreign economic activity in the agro-industrial complex in the Russian Federation. The work substantiates the importance of this institution of civil society in ensuring food security in our country, increasing the efficiency of foreign economic activity in the agro-industrial complex, and implementing the pol-icy of import substitution of agricultural products. At the same time, the aim of this scientific research is not only the formalization and analysis of the above-mentioned problems of formation and functioning of public control over foreign economic activity in the agro-industrial complex of the Russian Federation, but also the develop-ment and justification of a system of measures to resolve them, which will optimize the work of this institution of civil society, providing it with new development prospects.