Subjective Performance Measurement: Multi-Case Study Based on Chinese Corporations

SUBJECTIVE PERFORMANCE MEASUREMENT: MULTI-CASE STUDY BASED ON CHINESE CORPORATIONS Gao Chen and Tang Guliang Business School, Beijing Technology and Business University, China and Business School, University of International Business and Economics, China Abstract
Subjective performance measurement is a new hotspot in recent year western management accounting and motivation theory study. However, until now, there has been little research regarding the application of this theory in China. In order to bridge this research gap, this paper provides five propositions and four in-depth case studies in Chinese corporations. By the comparison of the application of subjective performance measures in China Minsheng Banking Corporation(CMBC), China Minmetals Corporation(Minmetals), China North Industries Group Corporation(CNGC) and UFIDA Software Corporation(UFIDA),this study suggests that the use of subjective performance measures differs as the corporation’s strategy, the corporation’s developing phase, organizational culture and institutional background. This study also suggests that the evaluation bias is the factor affecting the effects of application of subjective performance measures. The organizational culture is identified as the key factor that contributes to this bias. Keywords: performance measurement, incentive contract design, Chinese corporations, multi-case study

Introduction
Performance measurement and incentive contract design have already been one of the frontier issues of western corporate management control theory and motivation theory study. Studies of the issue widely involve and influence corporate governance, strategy implement, compensation system and corporate culture, concerned extensively by academic and business circles (Merchant, 2004). The core of performance measurement system design lies in the choice of performance measurement. In recent years, choice of performance measurement appears comprehensive, with the differences of financial

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