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THE RELATIONSHIP BETWEEN PERFORMANCE MEASURES AND MANAGERIAL BEHAVIOR
Abstract
Companies are increasingly implementing new performance measurement systems to track non-financial measures such as customer and employee satisfaction, quality, market share, productivity, and innovation. According to the existing theoretical literature, non-financial performance measures provide managers with incentives to improve long-term financial performance and, on the other hand, financial performance measures provide managers with incentives to improve short-term financial performance. This study examines whether the use of financial or non-financial performance measures for incentive purposes increases or decreases short-term orientation of the managers. The analysis is carried out on a sample of Slovak and Hungarian companies.
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