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Common-Measures Bias in the Balanced Scorecard: Cognitive Effort and General Problem-Solving Ability
Aleecia R. Hibbets,
University of Louisiana Monroe
Michael L. Roberts, University of Colorado at Denver
Thomas L. Albright, The University of Alabama
ABSTRACT. Lipe and Salterio (2000) found decision-makers relied almost exclusively on common information when evaluating performance using the Balanced Scorecard (BSC). Because theory underlying the BSC assumes all measures included are relevant for achieving organizational objectives, subsequent studies have attempted to understand or alleviate this common-measures bias (e.g., Banker et al. 2004; Libby et al. 2004; Roberts et al. 2004). This study is the first to directly test the effort-based explanation of the common-measures bias (Slovic and MacPhillamy 1974, Lipe and Salterio 2000). Additionally, the role of participants’ problem-solving ability on mitigating this bias is investigated. Strong support is shown for the effect of problem-solving ability, but not for the effort-based explanation. Superiors who relied more on common measures were less convinced subordinates should be evaluated with different measures or that subordinates’ target markets were unique.
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