PERFORMANCE MEASUREMENT SYSTEM AND FAIRNESS EVIDENCE FROM MANUFACTURING COMPANIES IN INDONESIA

Resumo

The purpose of this study is to examine how important are the non-financial and relative performance measures when being used to evaluate managers' performance, and to examine the effect of performance measures (non-financial and relative) on the sense of fairness. There were a total of 159 questionnaires that can be analyzed. Multiple linear regression with SPSS software was used for data analysis. The findings showed that non-financial performance measures are more important to be considered by superiors than relative performance measures when evaluating managers' performance; performance measurement system in accordance with the principle of fairness; the use of non-financial performance measures is proven to increase the perception of fairness and the use of relative performance measures is not proven to reduce the sense of fairness. Relative performance measures are a solution to the difficulty of determining the level of performance targets caused by uncertainty.