ORGANIZATIONAL CHARACTERISTICS AND USE OF BALANCED SCORECARD MEASURES IN EXECUTIVE COMPENSATION

Raili M. Pollanen Kenneth Kangwu Xi Carleton University 

ABSTRACT

This study investigates the use of balanced scorecard (BSC) measures in executive compensation plans, particularly the relationships between organizational characteristics and BSC use. Using data from 330 companies, collected from multiple public sources, the study reveals strong associations between BSC use and several organizational characteristics. The results reveal that strategy, industry, quality focus, organizational structure, culture, and ownership structure play significant roles as determinants of BSC use, supporting the hypotheses of the study. The findings underscore the importance of organizational characteristics in the effective design and use of performance measurement and incentive systems