Title: The use of non-financial performance indicators and organisational performance: an empirical analysis of Italian firms

Authors: Ahmed Abdel-Maksoud; Fabrizio Cerbioni; Mohamed F. Omran; Federica Ricceri

Addresses: College of Business and Economics, United Arab Emirates University, UAE ' Department of Economics and Management, University of Padova, Italy ' College of Business and Economics, Qatar University, Qatar ' Department of Economics and Management, University of Padova, Italy

Abstract: This study investigates the relationships between the use of non-financial performance indicators (NFPIs) and firms' reported financial performance. We question whether using NFPIs has an impact on firms' future financial performance. This study uses a panel of three years of data (t, t + 1, t + 2) collected from different sources. Cross-sectional data were collected from 106 medium-sized to large Italian manufacturing firms. The results indicate that Italian companies are found to distinguish between 'hard' and 'soft' NFPIs of employee morale, where hard measures are those more directly related to the production process, while soft measures are those more focused on the intangible aspects of employees. Our findings, interestingly, report significant positive associations between the use of only one category of NFPIs in year t, namely soft employee morale NFPIs, and firms' reported financial performance measured by return on assets in year t + 2. Practical implications, in particular, for Italian economy are discussed.

Keywords: Italy; manufacturing industry; non-financial performance indicators; NFPIs; organisational performance; performance management; firm performance; employee morale; production process; return on assets; ROA; performance measurement.

DOI: 10.1504/IJBPM.2015.072240

International Journal of Business Performance Management, 2015 Vol.16 No.4, pp.421 - 441

Received: 05 Jun 2014
Accepted: 16 Jan 2015

Published online: 06 Oct 2015 *

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