Senior Executives' Attitudes Towards Their Own Performance Measurement Systerms

Abstract

This research explores the attitudes of top-level executives to the way their performance is currently measured. Early in Breckler‘s (1984) work, it is suggested individuals‘ attitudes are composed of three components: cognitive perception, affective reaction and behavioural intention. As cognitive perception and affective reaction are tightly connected, prior research in attitudes mainly mixed them up or focused on just one component, without exploring how these three components are related. In fact, some studies have provided evidence that the three components have an implicit causal relationship under some conditions, but did not specify any particular group of individuals or a specific aspect of attitudes, such as perceived fairness. To fill this gap, the research involves senior executives as a particular group, to explore their attitudes in terms of the three components, and the implicit correlations between them. This is an exploratory study, using quantitative methods to test the hypotheses. To collect primary data, a questionnaire was distributed to senior executives, including Chief Executive Officers. The questionnaire was conducted anonymously online, asking general information about participants‘ backgrounds, current performance measurement systems and their attitudes towards the systems. Considering differences in national culture may have an impact on attitudes, the survey was translated into a Chinese version and distributed to the participants in New Zealand and China. In total, 117 responses were received, of which 64 were from New Zealand and 53 from China. The theoretical basis for this research is retrieved from both managerial and psychological disciplines. Firstly, based on information processing theory, process control theory and social exchange theory, the relationship between senior executives‘ perceived fairness/accuracy and their satisfaction are investigated. Secondly, in terms of behavioural intentions, equity theory and reinforcement theory are applied to explain the association between senior executives‘ satisfaction as a form of affective reaction and behavioural intention. Lastly, with regards to the differences of national culture, Hofstede‘s (1984; 1991) national culture theories were reviewed, providing possible impacts on the above correlations. Based on prior studies, this thesis generated hypotheses on the correlations between the performance measurement systems and senior executives‘ perceived fairness/accuracy, senior executives‘ perceived fairness/accuracy and satisfaction with the performance measurement systems, and senior executives‘ satisfaction with the performance measurement systems and their behavioural intentions. By using an independent sample t-test and Spearman correlation test, each of the hypotheses was tested. The results suggest that the hypotheses were partially supported. Specifically, the relationships of perceived fairness/accuracy with the performance measurement system, the raters and the measures, as well as the relationship between their perceived fairness and their satisfaction, are tested respectively. Given the non-correlation between the system and the perceptions, it is suggested that senior executives‘ perceptions are not directly affected by the performance measurement system, specifically by the different types of measures or raters involved. Furthermore, the results show that cultural values have an impact on the relationship between the senior executives‘ own performance measurement and their perceived fairness, to some extent. Moreover, for the relationship between cognitive perceptions and satisfaction, the results show significant correlations, which suggests that senior executives‘ satisfaction with the performance measurement system can also be affected by their perceived fairness of the system. Additionally, the correlation between senior executives‘ satisfaction and their behavioural intentions is tested from different aspects, such as willingness to improve. Among the listed behavioural intentions, willingness to improve future performance is suggested to have no association with senior executives‘ satisfaction with the system; but other intentions, such as the intention to behave politically, are suggested to be associated with their satisfaction. Such associations are not affected by cultural values, as the results show the same relationships in the two countries. Lastly, conclusions were drawn from the results. Key words: senior executive, performance measurement, attitudes