Accountability and Role Effects in Balanced Scorecard Performance Evaluations When Strategy Timeline Is Specified

Abstract

This study experimentally examines if fixation on lagging financial measures (relative to leading non-financial measures) as reported in prior balanced scorecard literature is mitigated when evaluators are provided with a strategy implementation timeline (a non-manipulated variable). The experiment manipulates whether or not evaluators are subject to process accountability as well as the role to which evaluators are assigned (i.e. supervisor or subordinate). We predict and find that, in general, the provision of an implementation timeline results in evaluators placing more weight on strategically linked, leading non-financial measures within a subordinate's time span of control compared to strategically linked, lagged financial measures beyond the subordinate's controllable time horizon. However, we also find that evaluators in the role of a supervisor differentiate less between strategically linked non-financial measures that fall within the subordinate's control and strategically linked financial measures beyond the subordinate's control when held accountable compared to supervisors not held accountable. On the other hand, participants in the role of a subordinate were able to differentiate appropriately between these measures when held accountable. Our results extend prior research by considering how linking a timeline to strategy implementation may assist evaluators when assessing performance in the presence of both leading and lagging strategic measures. Further, reference to an implementation timeline may influence role and accountability effects. Implications for future research in multidimensional strategic performance evaluation are discussed.