An Empirical Study of Non-Financial Measures' Emphasis for the Compensation Schemes on Different Categories of Strategic Orientation in Malaysia

Anbalagan Krishnan; Ravindran Ramasamy; Prem Lal Joshi

doi:10.17010/ijf/2014/v8i12/71688

An Empirical Study of Non-Financial Measures' Emphasis for the Compensation Schemes on Different Categories of Strategic Orientation in Malaysia

Authors

Anbalagan Krishnan Associate Dean (R & D) and Senior Lecturer (Accounting), School of Business, Curtin University, Sarawak Campus, CDT 250, 98009, Miri, Sarawak
Ravindran Ramasamy Faculty, University Tun Abdul Razak, RAZAK Campus, Capital Square No.8, JalanMunshi, Abdullah-50100, Kuala Lumpur
Prem Lal Joshi Faculty of Management, Multimedia University, Cyberjaya Campus, Jalan Multimedia, 63100, Selangor

DOI:

https://doi.org/10.17010/ijf/2014/v8i12/71688

Keywords:

Non-Financial Measures

, Financial Measures, Reward System, Miles and Snow Strategy Orientation

, M4, L6

Paper Submission Date

, May 5, 2014, Paper sent back for Revision, August 2, Paper Acceptance Date, September 10, 2014.

Abstract

Performance management has been a contemporary topic for research. Extensive studies have concentrated on this area and claimed that non financial measures besides financial measures are the essence for today's business environment. The literature review also asserted that the business performance measurement is highly concentrated on the non-financial indicators and is worthless if not linked to a reward system. Moreover, the measures linked to a reward system, but not as per the strategic direction of the firms, will also flunk the performance measurement system. Thus, this empirical research explored the emphasis of performance measures in relation to the reward system among different categories of Malaysian firms' strategic orientation. The study was conducted during 2011, and the findings revealed that the emphasis differed among the three categories of Miles and Snow strategic orientations. The firms which adopted a prospector strategy orientation placed a greater emphasis on non-financial performance measures tied to the compensation schemes, and differed from the other two Miles and Snow strategy orientations - analyzers and defenders. On the whole, the findings concluded that when Malaysian firms adopted different categories of strategic orientations, it did have an impact on measures in relation to the compensation schemes.

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Published

2014-12-01

How to Cite

Krishnan, A., Ramasamy, R., & Joshi, P. L. (2014). An Empirical Study of Non-Financial Measures’ Emphasis for the Compensation Schemes on Different Categories of Strategic Orientation in Malaysia. Indian Journal of Finance, 8(12), 7–20. https://doi.org/10.17010/ijf/2014/v8i12/71688

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Issue

Volume 8, Issue 12, December 2014

Section

Articles

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