An empirical investigation of the relationship between strategic performance measurement systems, role clarity, psychological empowerment and work outcomes

This study examines the effect of strategic performance measurement systems (PMS) on managers’ role clarity, psychological empowerment, job satisfaction and managerial performance. Data were collected using a survey of 83 strategic business unit managers from Australian manufacturing organisations. Consistent with the need to define the underlying theoretical properties of management accounting practices (Luft and Shields 2003), the study identifies comprehensiveness as an information characteristic of strategic PMS. Results show that strategic PMS is not directly associated with managerial performance. Rather, strategic PMS has an indirect positive association with managerial performance through psychological empowerment and role clarity. Results show that strategic PMS is positively associated with all four dimensions of psychological empowerment (meaning, competence, self-determination and impact), with dimensions of psychological empowerment positively associated with job satisfaction and managerial performance. Further results show that strategic PMS is positively associated with two dimensions of role clarity (goal clarity and process clarity), which, in turn, is positively associated with psychological empowerment, job satisfaction and managerial performance. The results indicate that the comprehensiveness of strategic PMS provides performance information that improves managers’ psychological empowerment and clarifies managers’ role expectations, which, in turn, improve managerial performance.