| Managers' preoccupation with short-term profits is detrimental for the firm because long-term value creation is ignored. Kaplan and Norton (KN) (1992) introduced the Balanced Scorecard (BSC) as a performance measurement system believed to mitigate this short-term myopia. The BSC shows managers how their individual actions contribute to attaining organizational objectives and encourages managers to engage in firm-desired behaviors (KN 1996a).; Firms adopting the BSC report successful applications. Initial empirical evidence is encouraging, and the volume of BSC academic research is expanding. My project, the first at the manager level, investigates the effects of three BSC characteristics on managers' job satisfaction and performance evaluations. The perspective framework characteristic provides the BSC's “balance” by categorizing financial and nonfinancial performance measures into four perspectives (financial, customer, internal-business-process, and learning and growth). The strategy link characteristic stresses performance measures linked to achieving organizational objectives. The long-term/short-term (LT/ ST) trade-off emphasizes long-term decisions by including future-oriented performance indicators. My prediction for each characteristic is for a positive, direct effect on the managerial outcome. In addition, an indirect relationship mediated by role conflict is predicted between each characteristic and job satisfaction.; A survey collected data from 763 managers. Widely-accepted scales measure job satisfaction and role conflict. This study develops new scales for performance evaluation and the BSC characteristics. Results are strongest for the strategy link, which shows a direct, positive effect on each managerial outcome, and an indirect effect through role conflict on job satisfaction. The LT/ST trade-off makes a positive, direct impact on job satisfaction, with greater long-term emphasis in decision-making being related to job satisfaction. For the perspective framework variables, two have positive, direct effects on job satisfaction; four have weaker positive, direct effects on the managerial outcomes; and three have unexpected negative, direct relationships with job satisfaction. Overall, the direct effects on job satisfaction are stronger than on performance evaluation, possibly reflecting fundamental differences between them. Job satisfaction represents managers' feelings at a specific time, while performance evaluation reports superiors' past judgments about managers' actions. My findings support KN's contentions and the opportunities for future BSC research are promising. |
