Four Design Choices and Their Interdependencies in Performance Measurement Systems: On the Contours of a Meta-Structure

This study explores the interdependencies between four design choices in performance measurement systems (PMSs): diversity, collectivity, subjectivity, and relativity. Although the accounting literature has extensively examined these design choices and their consequences, they are typically studied in isolation. This study shifts the focus to their interplay. Drawing on existing research on the consequences of these choices in incentive provision, the study reveals both complementary and substitution effects among them. The study makes two key contributions. First, it advances the performance measurement literature by conceptualising the four design choices in combination, representing a new meta-structure in PMS design. This perspective, which has received limited attention in prior research, offers the potential to generate new insights into how and why the effectiveness of PMS design is shaped by the configuration of design choices. Second, it contributes to the management control literature by demonstrating how systems thinking and systems-theoretical concepts—originally developed to understand interdependencies between different management control systems—can be applied at a more granular level. This approach yields deeper insights into the inner workings of a single control system, such as a PMS, and explains how and why the effects of design choices are interdependent.