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Of the many decisions a company must face to achieve success is how to measure employees' performance and how to reward them (Kleiner and Gautreau 2001).For the avant-garde management accounting information system,

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Introduction

Emulation of strategies incorporated amongst organizations is a tell-tale whereby the former company is performing admirably efficient and effective through well formulated resources allocation on its strategy. Of the many decisions a company must face to achieve success is how to measure employees' performance and how to reward them (Kleiner and Gautreau 2001). For the avant-garde management accounting information system, it cannot live on financial measure alone because management can manipulate such data by cutting cost, investing less and hence forth. The accounting system requires a mix of non-financial and financial data to give a more balanced view of firm's overall performance (Bushman et al. 1996). Research by Cumby and Conrod, 2001 indicates that non-financial information is highly value-relevant for knowledge-based industries and shown as an effective tool to evaluate an academic organization and demonstrate accountability to government and the public (Dorweiler and Yakhou 2005). Current non-financials could also predict organization's future financial performance (Smith 2005; Amaratunga et al. 2001). Unlike usual performance measurements system decades ago, more importantly now, is to measure performances relative to organizations' goals and strategies. Amongst other key issues in the development of performance measurement tools in past decades have been quandaries pertaining customer loyalty. ...read more.

Middle

2005). There also appears to have no cause and effect dysfunctional organizational behavior as claimed, the only causal is the improved performance in one perspective leads to an increase in another (Lord et al. 2005). BSC is maturing and approached because of its flexibility (Lord and Shanahan 2006; Bible et al. 2006). It has been argued that BSC does consider employee satisfaction through the learning and growth perspective (Hoque 2003). Numbers of performance measures used were satisfactory and information overload was overcome through BSC (Yeniyurt 2003; McWhorter 2003; Arora 2002). However, BSC experiences difficulty in linking performance measures to strategy (Lord et al. 2005). Other issues include it does not tackle human resource and uncertainties issues usually done in PESTEL analysis (Smith 2005). In recent years, the Porter's model had made its debut to help managers develop and implement long-term strategy (Sims 2001). The model is used to gain competitive advantage over another but does not define for the strategic unit or as a corporation (Sims 2001). It also does not take into account the dynamics of markets which is rapidly changing. Another development adopted by large number of companies is the Economic Value Added [EVA], which includes the cost of capital, hence creating value but was heavily criticized for not being different from traditional methods (Yeniyurt 2003). ...read more.

Conclusion

49-77 Marr B and Adams C (2004) 'The Balanced Scorecard and Intangible Assets: Similar Ideas, Unaligned Concepts', Measuring Business Excellence, 8: 3, p. 18-27 McWhorter L (2003) 'Does the Balanced Scorecard Reduce Information Overload?', Management Accounting Quarterly, 4: 4, p. 23-27 Mouritsen J, Larsen H and Bukh P (2005) 'Dealing with the Knowledge Economy: Intellectual Capital versus Balanced Scorecard', Journal of Intellectual Capital, 6: 1, p. 8-27 Rohm H (nd) 'A Balancing Act', Perform Magazine, 2: 2, p. 1-8 Rohm H and Halbach L (2006) 'A Balancing Act: Sustaining New Directions', Perform Magazine, 3: 2, p. 1-8 Roslender R and Fincham R (2001) 'Thinking Critically about Intellectual Capital Accounting', Accounting, Auditing and Accountability Journal, 14: 4, p. 383-398 Scholey C (2006) 'Risk and the Balanced Scorecard', CMA Management, 6/7, p. 32-35 Shaikh J (2004) 'Measuring and Reporting of Intellectual Capital Performance Analysis', Journal of American Academy of Business Cambridge, 3, p. 439-448 Scarbrough H and Carter C (2001) 'Towards a Second Generation of KM?-The People Management Challenge', Education and Training, 43: 4/5, p. 215-224 Sims A (2001) 'Generating Strategic Options', CIMA Insider, September Issue, p. 24-26 Smith M (2005) 'The Balanced Scorecard', Financial Management, February Issue, p. 27-28 Yeniyurt S (2003) 'A Literature Review and Integrative Performance Measurement Framework for Multinational Companies', Marketing Intelligence and Planning, 21: 3, p. 134-142 ...read more.

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