The balanced scorecard’s missing link to compensation: a literature review and an agenda for future research
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In: Journal of Accounting and Organizational Change, Vol. 10, No. 4, 2014, p. 431-465.
Research output: Journal contributions › Journal articles › Research › peer-review
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TY - JOUR
T1 - The balanced scorecard’s missing link to compensation
T2 - a literature review and an agenda for future research
AU - Albertsen, Oana Alexandra
AU - Lueg, Rainer
PY - 2014
Y1 - 2014
N2 - Purpose– This paper aims to review the literature on the balanced scorecard (BSC) system. The BSC may well be one of the most popular performance measurement systems, but this is not synonymous with successful. The inventors of the BSC, Kaplan and Norton, actually emphasize that a BSC can only really impact the organizational performance if it is linked to the actors’ intrinsic and extrinsic incentives. As BSC has existed for more than 20 years, the authors find it relevant to survey the extant literature which elaborates on the BSC-incentives link within organizations.Design/methodology/approach– This paper identifies 117 empirical studies from leading academic journals published between 1992 and 2012 and then assesses 30 of these studies, which present the BSC-compensation link within the BSC literature. The authors analyze both research design (authors’ perspective) and the actual findings in the field (organizations’ perspective).Findings– First, it was found that only 30 of 117 empirical studies have a research design that is comprehensive enough to capture a full BSC as suggested by Kaplan and Norton, and only six of these studies elaborate on the link between the BSC and compensation. Second, extant research lacks valid constructs for the BSC and focuses too much on planning (ex-ante) with the BSC and not sufficiently on evaluation and control (ex-post). Third, the authors demonstrate that empirical BSC literature relies very strongly on field research in small and medium enterprises compared to similar research. Overall, the authors claim that the “relevance” of the BSC remains unproven.Originality/value– The authors synthesize the empirical BSC literature and derive a future research agenda.
AB - Purpose– This paper aims to review the literature on the balanced scorecard (BSC) system. The BSC may well be one of the most popular performance measurement systems, but this is not synonymous with successful. The inventors of the BSC, Kaplan and Norton, actually emphasize that a BSC can only really impact the organizational performance if it is linked to the actors’ intrinsic and extrinsic incentives. As BSC has existed for more than 20 years, the authors find it relevant to survey the extant literature which elaborates on the BSC-incentives link within organizations.Design/methodology/approach– This paper identifies 117 empirical studies from leading academic journals published between 1992 and 2012 and then assesses 30 of these studies, which present the BSC-compensation link within the BSC literature. The authors analyze both research design (authors’ perspective) and the actual findings in the field (organizations’ perspective).Findings– First, it was found that only 30 of 117 empirical studies have a research design that is comprehensive enough to capture a full BSC as suggested by Kaplan and Norton, and only six of these studies elaborate on the link between the BSC and compensation. Second, extant research lacks valid constructs for the BSC and focuses too much on planning (ex-ante) with the BSC and not sufficiently on evaluation and control (ex-post). Third, the authors demonstrate that empirical BSC literature relies very strongly on field research in small and medium enterprises compared to similar research. Overall, the authors claim that the “relevance” of the BSC remains unproven.Originality/value– The authors synthesize the empirical BSC literature and derive a future research agenda.
KW - Management studies
KW - Literature review
KW - Adoption
KW - Balanced scorecard
KW - Implementation
KW - Reward
KW - Compensation
KW - Remuneration
KW - Motivation
KW - Performance measurement system
KW - Construct validity
KW - Incentive
KW - Bonus
KW - M10
KW - M4
U2 - 10.1108/JAOC-03-2013-0024
DO - 10.1108/JAOC-03-2013-0024
M3 - Journal articles
VL - 10
SP - 431
EP - 465
JO - Journal of Accounting and Organizational Change
JF - Journal of Accounting and Organizational Change
SN - 1832-5912
IS - 4
ER -