Manager Behavior in a Balanced Scorecard Environment: Effects of Goal Setting, Perception of Fairness, Rewards, and Feedback

There has been a growing body of research that attempts to evaluate the effectiveness of the balanced scorecard (BSC) as a tool for both strategic management and performance evaluation in organizations. However, the results from prior research in this area have been equivocal. This paper reviews the implications on manager behavior of goal setting, perception of fairness, reward systems, and feedback linkages, as attributes of BSC. Taken together, the ways in which these attributes affect managers’ motivation, commitment, and satisfaction provide an explanation for the differences observed in prior research. In addition, we derive a theoretical model of the various hypothesized relationships identified in the extant relevant literature and identify opportunities for future research.