A SURVEY OF 128 FIRMS LOOKS AT HOW COMPANIES USE FINANCIAL, NONFINANCIAL,
AND SUBJECTIVE PERFORMANCE MEASURES IN ORDER TO BETTER
UNDERSTAND HOW DIFFERENT PERFORMANCE MEASURE TYPES CONTRIBUTE TO AND
AFFECT MANAGEMENT STRATEGIES.
EXECUTIVE SUMMARY Using survey data from manufacturing managers of 128 firms, this study empirically examines
the extent to which firms combine financial, quantitative nonfinancial, and subjective performance measures. Both
the relative use of measure types and specific measures within each type are found to vary with the companies’ manufacturing
strategies. This supports claims that the three types of measures play different roles in supporting a firm’s
operations. A related finding is that the measure types have different impacts on important employee actions, such as
risk taking, efforts at innovation, relative emphases on the short vs. long term, and the propensity to game the performance
evaluation system