Effects of the Interactive Use of Performance Measurement Systems on Job Performance: Mediation Effect of Organizational Learning

Abstract

Interactive controls that focus on communication and continuous learning are very important to achieve a competitive advantage. To better understand the underlying mechanism of how performance measurement systems (PMSs) improve job performance, a mediation model was constructed in the current study to examine organizational learning as a possible mediating variable. Data were collected using a questionnaire in China with a sample size of 191 managers. Structural equation model and Smart-PLS methods were used to test the hypotheses. Results yielded significant direct effects between the interactive use of PMS on organizational learning and job performance. Additionally, organizational learning was found to play a mediating role in the relationship between interactive use of PMS and job performance. These findings highlight the importance of interactive PMS use, as well as the underlying mechanisms among PMS, organizational learning, and job performance, and further help the management clarify how organizational learning affects performance, providing a framework for building a sustainable competitive advantage.

Performance Measurement System, Organizational Learning, and Creativity

“…Firstly, it aggregates new evidence of using the PMS relative to organizational learning. It corroborates previous studies that found a positive relationship between the interactive use of MCSs and learning (Henri, 2006;Srimai et al, 2011;Zhang & Yu, 2020) and, regarding the diagnostic use, it supports the perspective of a positive effect (Oyadomari et al, 2013) in contrast to the negative effect (Henri, 2006). Secondly, beyond the discussion that organizational learning promotes innovation (Huber, 1998), it extends the discussion to different levels of novelty in creativity: improvisational and compositional (Valaei et al, 2017).…”

“…H1a and H1b predict that the diagnostic and interactive use of the PMS positively influences organizational learning, with both being supported statistically and presenting small to medium effect sizes. This finding contrasts with the positive effect of the interactive use of the PMS or other MCSs on organizational learning (Henri, 2006;Srimai et al, 2011;Zhang & Yu, 2020). Moreover, it aggregates new evidence related to the diagnostic use of the PMS and its relationship with organizational learning since the literature indicates negative effects (Henri, 2006) and positive effects (Oyadomari et al, 2013).…”

“…Henri (2006) observed that the diagnostic (interactive) use of the PMS negatively (positively) influenced organizational learning. The positive effect of the interactive use of the PMS or similar MCSs was proven in later studies (Srimai et al, 2011;Zhang & Yu, 2020), reinforcing its occurrence. However, the evidence of the effect of the diagnostic use of the PMS on organizational learning is still inconclusive.…”

“…Firstly, the relationship between MCSs and learning is inconclusive, and new evidence is necessary (Santos et al, 2021). Various studies postulate the positive effect of the interactive use of PMS or another MCS on organizational learning (Henri, 2006;Srimai, Damsaman, & Bangchokdee, 2011;Zhang & Yu, 2020), whereas there is evidence of a negative influence (Henri, 2006) or a positive influence (Oyadomari et al, 2013) on organizational learning of the diagnostic use of the PMS. Moreover, the evidence of the diagnostic and interactive use of MCSs in startups is limited (Eldridge et al, 2014).…”

Prescriptive Learning and Sustainable Employee Engagement in Selected Pharmaceutical Firms in Nigeria

“…Prescriptive learning is experiential learning where information is acquired from employees' knowledge and experience, and is later transformed into a viable idea. In gaining experience, some persons perceive information through concrete, tangible and immersed reality [11]. Other persons acquire new information by conceptualization, i.e., analyzing and thinking through rather than using sensation.…”