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Environmental Uncertainty, Comprehensive Performance Measurement Systems, Performance-Based Compensation, and Organizational Performance

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  • Axel K-D. Schulz
  • Anne Wu
  • Chee W. Chow

Abstract

This study explores firms' use of comprehensive performance measures and performance-based compensation in response to the increasingly uncertain competitive environment. Data from a sample of 84 Taiwanese high-tech manufacturing firms revealed an increased use of such systems among firms facing higher perceived environmental uncertainty. We also found performance-based pay to fully mediate the relationship between comprehensive performance measures and employee effort. Finally, employee effort is significantly and positively associated with organizational performance and fully explains the effect of performance-based compensation in increasing organizational performance.

Suggested Citation

  • Axel K-D. Schulz & Anne Wu & Chee W. Chow, 2010. "Environmental Uncertainty, Comprehensive Performance Measurement Systems, Performance-Based Compensation, and Organizational Performance," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 17(1), pages 17-39.
    • Handle: RePEc:taf:raaexx:v:17:y:2010:i:1:p:17-39
    DOI: 10.1080/16081625.2010.9720850
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    Cited by:

    1. Hunjra, Ahmed Imran & Boubaker, Sabri & Arunachalam, Murugesh & Mehmood, Asad, 2021. "How does CSR mediate the relationship between culture, religiosity and firm performance?," Finance Research Letters, Elsevier, vol. 39(C).
    2. Fang, F., 2019. "When performance shortfall arises, contract or trust? A multi-method study of the impact of contractual and relational governances on performance in public – private partnerships," Other publications TiSEM 473840ee-6945-4a93-9326-5, Tilburg University, School of Economics and Management.
    3. Nguyen, Thi Thu & Mia, Lokman & Winata, Lanita & Chong, Vincent K., 2017. "Effect of transformational-leadership style and management control system on managerial performance," Journal of Business Research, Elsevier, vol. 70(C), pages 202-213.
    4. Ahmed Imran Hunjra & Peter Verhoeven & Qasim Zureigat, 2020. "Capital Structure as a Mediating Factor in the Relationship between Uncertainty, CSR, Stakeholder Interest and Financial Performance," JRFM, MDPI, vol. 13(6), pages 1-18, June.
    5. Shadi Alkhasawneh & Wan Anisah Binti Endut & Nik Mohd Norfadzilah Bin Nik Mohd Rashid, 2023. "The Influence of External Factors and Modern Management Accounting Techniques Adoption on Organizational Performance," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 145-168.
    6. David Han-Min Wang & Quang Linh Huynh, 2014. "Linkages Among Corporate Governance,Management Accounting Practice And Organizational Performance: Evidence From A Southeast Asian Country," Romanian Economic Business Review, Romanian-American University, vol. 9(1), pages 63-81, March.

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