The Role of Visual Attention on Managerial Judgment in Balanced Scorecard Performance Evaluation: Insights from Using Eye-Tracking Device

Abstract:     
This study investigates the role of visual attention on managerial judgment in Balanced Scorecard performance evaluation. Using the Locarna eye tracker to collect data on the amount of time superiors fixated on cues presented to them, we hypothesize and find that the use of BSC enables superiors to focus their attention more on the strategically linked performance measures than on the strategically non-linked measures in evaluating their subordinates. Furthermore, we predict and find that superiors who spend more time fixating on strategically linked performance measures are more likely to make decisions that are consistent with the achievements of the subordinates’ strategic objectives. Finally, while we predict that superiors who spend more time fixating on strategically non-linked performance measures are more likely to make decisions that are inconsistent with the achievements of the subordinates’ strategic objectives, the results contradict our expectation. This study contributes to the BSC literature by providing important insights into the influence of visual attention on judgment and decision making.

Number of Pages in PDF File: 35

Keywords: Visual attention, balanced scorecard, managerial judgment, eye tracking

JEL Classification: D21, G32, M41

working papers series