Emerging evidence suggests that performance measurement systems may generate positive
psychological effects, leading to higher levels of managerial performance. We extend
this literature by examining the extent to which diagnostic vis-à-vis interactive utilisation
of performance measures may be associated with decreasing role ambiguity and increasing
psychological empowerment with positive consequences for performance. We find that the
interactive utilisation of non-financial performance measures can be particularly important
for generating a positive psychological experience and (indirectly) increasing performance.
Our study contributes further evidence of the psychologically beneficial role played by
management control systems.