Goal Congruence -The Experience of a Performance Management System -A Case Study of AstraZeneca

Abstract

Background and discussion: It can be stated that organizations use management control systems in order to influence employees’ behavior in the right direction, with the aim of achieving organizational goals. Nevertheless employee’s behaviors can be difficult to direct in a desired way, especially if individual goals are not aligned with the organizational goals. Thus, designers of performance measurement systems (PMS) should seek to create goal congruence, which means that individual goals are aligned with organizational goals. Organizations today report difficulties in creating goal congruence when implementing PMS. Despite how well designed or executed the PMS are, the employees’ perception about the PMS is fundamental for its impact. Research questions: How do employees within an organization experience the use of Performance Measurement Systems, based on aspects relevant for the contribution to goal congruence? To what extent does their Performance Measurement System seems to contribute to goal congruence? Purpose: The purpose of the study is to describe how the use of PMS is experienced among employees at different levels. Based on knowledge about how the PMS is intended to create goal congruence, we seek to identify how this phenomenon is experienced and perceived among the employees. With reference to the study we seek to find out to what extent the PMS contributes to the alignment between individual goals and organizational goals. Delimitations: The study is based on the experiences of five employees within the R&D department at AstraZeneca in Mölndal, Sweden. The results cannot be subject to any generalized conclusion applicable for the entire organization, since it is based on a small amount of respondents. The focus throughout the study will be on aspects and implications relevant for goal congruence. Method: The thesis is based on a qualitative approach in the form of a case study. Data was collected from five respondents by conducting qualitative semi-structured interviews. The empirical findings have then been analyzed by means of the reference of literature. Results: In brief the result indicates that AstraZeneca has managed to create a system that contributes to goal congruence based on the experiences among the employees. The experience of the employees indicates that the aspects relevant for the achievement of goal congruence, for instance communication and alignment between individual goals and organizational goals seem to be taken into account in the PMS. The empirical data also indicates that the employees experience a direct or indirect connection between their own individual goals and the overall goals. Our own interpretation and observation lead to the conclusion that the company has managed to design a PMS including a Global Scorecard that can lead to goal congruence, as it serves as the overall base for all individual goals. By decomposing the GSC into adjusted scorecards relevant for each business unit, it is possible to create individual goals that are aligned with the overall goals. Suggestions for further research: A thought that arose during the study is to what extent a well-developed PMS actually has a positive effect on the profitability and growth of the company. Furthermore, a comparative study between two companies with distinguished different corporate cultures would be interesting to conduct, in order to investigate whether the achievement of goal congruence is affected by the corporate culture.