The Impact of Administrative and Professional Background of the Higher Management Team on Bias when Using Balanced Scorecard to Evaluate Performance of Branch Managers

Abstract

This research focuses on bias when using Balanced Scorecard to evaluate performance. Bias comes from personal judgments of top management teams. Personal Judgments depend on administrative and professional background of management of team members. Therefore, this research aims to demonstrate the effect of administrative and professional background of the higher management team on bias when using Balanced Scorecard to evaluate performance of branchmanagers. To achievethis purpose, four hypotheses are formulated and tested by data collected from banks and insurance companies in Egypt trougha questionnaire designed for this purpose. Findings provided evidences on the existence ofcommon measure bias, centrality bias, and leniency bias in the Egyptian financial sector. Statistical analysis has found a positive relationship between the administrative backgroundof the higher management team and the common measure bias, whereas it has found a negative relationship between the professional background of the higher management team and the common measure bias. Analysis also demonstrated thatthere was no relationship between administrative orprofessional background ofthe higher management team, on one side, and centrality bias and leniency bias, on the other.