The Impact of Performance Metrics on Employee Motivation

In the business context, employees are the most valuable assets and greatly determine the success of any business. Many businesses despite having all the capabilities necessary to enhance performance have failed due to a lack of the essential input towards their employee’s concerns. Indeed, employee satisfaction equals customer satisfaction (Levesque, 2007, p.30). In this respect, I propose that employee motivation is an essential component and topic in business. Any successful manager should embrace initiatives that add up to employee motivation and satisfaction. Human resource is an integral part of business and is directly related to finance and accounting. The successes of the two areas are interdependent and each should influence the other. Therefore, influencing employee motivation through the use of performance measures is an important issue of human resource management as well as finance and accounting.

As a future manager, performance measures such as economic value added (EVA) and balanced scorecard (BSC) are quite relevant. Management is the act of organizing resources in a manner that facilitates goal attainment at the least cost possible. Narrowing this discussion to focus on human resource management, the two performance measures (EVA and BSC) will influence how I will motivate employees. Dierks and Patel (1997) think that EVA is not merely for managers but may also be used for all employees. The proper implementation enables the shareholder value created to permeate the entire organization and the employees are motivated to act in concert with the managers. About balanced scorecard, Kaplan and Norton (2007) suggest that the technique links rewards to performance measures. Essentially, BSC is directly related to employee motivation in that it tracks performance to the input of individual employees. Kaplan and Norton provide several examples of organizations that have used performance measures to motivate their employees. In respect to this discussion, the EVA discussed can be used to enhance performance by developing effective strategies that entice the employees and hence customer satisfaction.

The opinions provided by the authors of the two articles are true. The two performance measures are presented as those which measure the satisfaction of all stakeholders. It is then apparent that the realization of stakeholder satisfaction can enable managers to understand the extent of employee motivation. Kaplan and Norton in particular relate a balanced scorecard to employee satisfaction. It is true that when the employees are rewarded due to the extra effort they put in, they will become motivated to work more (Kaplan & Norton, 2007). Such a strategy will make them consider themselves as part of the ownership and hence work hard with the feeling that it is “our” business rather than “their” business.

The two articles focus on unique techniques that managers can use to enhance their actions, especially in profit-making organizations. They can help one to learn by considering businesses as integrated rather than partial information. The fact that performance measures can influence various departments of an organization including human resource suggests the integrated nature of businesses. For instance, when looking at the balanced scorecard as a strategic management system, a learner can figure out how strategies can be managed through a network that utilizes resources maximally and at the least cost. An individual can also learn from the articles by evaluating the real-life examples provided that link business success with performance metrics. In as much as a learner wishes to learn from the articles, the focus on business entities must shift from profit-oriented to goal-oriented focus.


Dierks, P. A. & Patel, A. (1997). What is EVA and how can it help your company? Management Accounting, 79(5), 52-57.

Kaplan, R. S. & Norton, D. P. (2007). Using the balanced scorecard as a strategic management system. Harvard Business review, 150-161.

Levesque, P. (2007). Motivation: powerful motivators that will turbo-charge your workforce. Irvine, CA: Entrepreneur Press.

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