The Effects of Leadership Styles and Use of Performance Measures on Managerial Work-Related Attitudes

Abstract

In this paper we investigate the effects of superiors’ performance evaluation behaviors on subordinates’ work-related attitudes. In response to critique on the multidimensional nature of the ‘supervisory style’ construct in the RAPM literature, we argue that the two dominant dimensions underlying this construct are leadership style and performance measure use. We develop and test a path model that allows us to disentangle the effects of leadership style (initiating structure and consideration) and performance measure use (objective and subjective measures) on managerial work-related attitudes (goal clarity and evaluation fairness). We test our hypotheses using survey data from 196 middle-level managers in 11 organizations. Results show that an initiating structure leadership style affects subordinates’ work-related attitudes through the use of objective performance measures. Consideration leadership behavior instead only has a direct impact on work-related attitudes. These findings have important implications for management accounting research on superiors’ use of performance measures, and provide an explanation of some of the problematic findings in the literature.