The effect of enabling versus coercive performance measurement systems on procedural fairness and red tape

Abstract

In this study, we investigate the effects of an enabling versus a coercive performance measurement system on how employees perceive the procedural quality of such systems. In particular, we examine the design characteristics and the development process of performance measurement systems. We hypothesize that an enabling design and an enabling development process, as compared to a coercive design and a coercive development process, lead to perceptions of greater procedural fairness and less red tape. To test our hypotheses, we conduct an experiment with two different samples (a student laboratory sample and an online sample). In general, our results indicate that an enabling performance measurement system design and an enabling system development process both independently increase procedural fairness and decrease red tape. These findings imply that organizations interested in improving the procedural quality of their performance measurement system should focus on designing and developing a system that is enabling rather than coercive.