How Employees Use Performance Measurement

Nowadays, the user group for business performance measurement has expanded from managers to employees. However, there has been hardly any research regarding how employees are actually using performance measurement. This paper explores the topic by seeking answers to three research questions. First, for what purpose do employees actually use performance measurement? Second, what kind of problems do they have? Third, how has the use of performance measurement changed recently? In addition, the effect of using the Balanced Scorecard regarding the three research questions is examined. These research questions are answered by analyzing the results of a survey conducted in Finland during spring 2001. Based on the survey results, it can be stated that employees use performance measurement actively to improve the performance of their own work. The main contribution of this study is that the actual problems in and the purposes for using performance measurement at the employee level can now be more precisely described and thus further researched. Introduction Traditionally, business performance measurement has been the management’s tool in controlling their business operations and employees. Managers have chosen the measures and employees have helped in gathering the data from operations. Nowadays performance measurement is also a tool for teams and individual workers. Performance measurement frameworks, such as the Balanced Scorecard, are used to implement companies’ strategies. The measures for which an individual employee is responsible determine what he or she should do in order to participate in the strategy implementation of the whole company (Kaplan and Norton 1996, p. 77). The measurement system can also be used to educate employees regarding the important characteristics of the business (Kaplan and Norton 1996, p. 77). These changes along with many others are changing the role of employees in performance measurement. There has been a lot of research regarding the relatively new ways of using performance measurement described earlier (See e.g. Kaplan and Norton 1996, Neely 1999 or Ghalayini 1996). However, there has not been very much attention regarding how employees have experienced the changes in the use of measurement. The objectives of this article are to discover 1) for what purpose employees actually use performance measurement, 2) what kind of problems they have, and 3) how the use of performance measurement has changed in recent years from the employee’s point of view. In addition, the effect of using the Balanced Scorecard is examined on the basis of three research questions because, at the moment, this seems to be the dominant approach to performance measurement used (Kald and Nilsson 2000, p. 124 or Järvenpää 2000, p. 61). The research for this article was carried out using the nomothetical research approach. According to Olkkonen (1994, p. 67-70), the nomothetical research approach is based on the positivistic paradigm. The nomothetical research approach can be characterized as both empirical and descriptive. In this study, research questions are answered by analyzing a survey which was sent to about 1350 Finnish companies in the spring 2001. Recent developments in performance measurement – implications on employee use In this chapter, recent developments in performance measurement are discussed. These developments are viewed especially from the point of view of the employee. The questions are, how do various things affect the way