The effect of non-financial performance measures on role clarity ad procedural fairness: The role of knowledge of performance appraisal systems Utami Puji Lestari (1*), Lanita Winata (2), Yusep Friya Purwa Setya (1)
(1) State Polytechnic of Jakarta
Jalan Prof. Dr. G.A. Siwabessy Kampus Baru UI Depok
utami.lestari[at]akuntansi.pnj.ac.id
(2) Griffith University
Gold Coast Campus, Parkland Dr, Southport, Queensland, Australia
Abstract
Due to the lack of efficiencies of traditional performance measures that focus on financial performance, organizations emphasize non-financial performance measures. While there is increased use of these measures, there is a growing discussion on their advantages and consequences, such as to employees^ behavior. To be accepted by employees, the performance measurement systems need to be perceived as clear and fair. This study aims to investigate the effect of non-financial performance measures on role clarity and procedural fairness. In addition, this study also examines if the knowledge of performance appraisal systems mediates the relationships. The data were collected through survey questionnaires from 79 employees at the managerial level of service organizations, namely public accounting firms and a state-owned administrative service located in Jakarta, Bogor, Depok, Bekasi, and Banten. PLS-SEM with SmartPLS Software Version 3.3.3 was used to analyze the data. The results indicate that non-financial performance measures are significantly associated with role clarity and knowledge of performance appraisal systems. While there are no relationships between (1) non-financial performance measures and procedural fairness and (2) knowledge of performance appraisal system and procedural fairness, there are significant associations between (1) knowledge of performance appraisal systems and role clarity and (2) role clarity and procedural fairness. These results suggest that non-financial performance measures improve employees^ perceptions of role clarity and procedural fairness through a better knowledge of performance appraisal systems.
Keywords: non-financial performance measures- knowledge of performance appraisal systems- role clarity- procedural fairness
