The Effects of Nonfinancial Performance Measures on Employee Job Satisfaction

Abstract

The main purpose of this paper is to investigate how the use of nonfinancial measures as performance evaluation criteria influences employees' job satisfaction. Since employees may perceive nonfinancial measures use as fair, the effects of such measures may be attributable to improvement in employee perceptions of procedural fairness. Alternatively, since nonfinancial measures use may reduce employee role ambiguity, the effects of nonfinancial measures use may be attributable to clearer employee roles (reduced role ambiguity). It is also possible that both effects may occur simultaneously. Based on a sample of 60 French managers, our results indicate that the use of nonfinancial measures is positively related to employee job satisfaction. These effects are mainly indirect through the enhancement of procedural fairness rather than through a reduction in role ambiguity.