The interaction effect of quantity and characteristics of accounting measures on performance evaluation

Purpose: This study aims to investigates the appropriate number and kinds of accounting measures managers should use in their decision-making. Design/methodology/approach: The authors apply an experimental method with 54 participants who work for a utility company in Japan. Findings: This study suggests that under information overload, in which many measures are handled simultaneously, managers who have a high Need for Cognition (NFC) can no longer use either financial or customer perspective measures effectively, while when there is no information overload, they can use those measures. Managers with low NFC do not use customer perspective measures even when information overload does not occur. Practical implications: This study concludes that we need to pay careful attention to differences in managers’ NFC as well as how many and what kind of measures should be provided to managers when designing multi-measures for performance evaluation. Originality/value: This paper sheds light on the relationships among the number of measures, the characteristics of measures, and managers’ cognitive style when designing a management accounting system.