An examination of alignment of performance measurement and reward of managers in organisations undertaking strategic change

Roberts, Alexander (1997) An examination of alignment of performance measurement and reward of managers in organisations undertaking strategic change. Doctoral thesis, University of London: London Business School.

Abstract

Managers play a role in the translation of strategic objectives into the day-to-day activities by which objectives are operationalized, and in monitoring progress towards achievement of objectives. A better understanding of the effects of performance measurement and reward of managers on the translation and monitoring process within organizations is needed. The thesis is an empirical examination of the performance measurement and reward of managers in organizations undertaking strategic change. The principal research questions of the thesis are: do organizations undertaking strategic change seek to align their performance measurement and reward of managers with the business objectives, and does lack of alignment give rise to unintended effects? A review of the literature discloses a general lack of understanding of the role of control and reward systems, and middle managers in implementing strategic objectives. In a departure from earlier studies, which focus almost exclusively on senior managers or the shop floor, this research examines multiple levels in the managerial hierarchy of large strategic business units. The study, which consists of four short case studies and two in-depth field studies, uses in-depth interviews and archival records for data collection. The analysis suggests that within these six organizations there was generally an absence of the understanding of the alignment issues, lack of alignment created unintended changes in strategy, and misalignment effects were frequently mis-diagnosed. A face-to-face survey of 20 additional companies provided support for these findings.