Abstract
The aim of this study is to investigate how organizations perceive the use of the Balanced Scorecard (BSC) as a performance management system (PMS), particularly through the perspective of employees. It seeks to understand the impact of adopting the Balanced Scorecard as a PMS on Organizational Effectiveness (OE) and whether employees' views on PMS effectiveness influence the relationship between BSC adoption and organizational effectiveness. Data was collected through a cross-sectional survey of 639 employees from selected Indian businesses. The conceptual model was validated and tested using Structural Equation Modeling (SEM), a multivariate statistical analysis technique. The results confirm the hypothesized conceptual model, indicating that the adoption of the Balanced Scorecard as a PMS is positively associated with Organizational Effectiveness. This study provides valuable insights into how employees' perceptions serve as a critical factor in assessing the effectiveness of a PMS and its actual impact on organizational effectiveness. One limitation is that the study relies solely on quantitative data, suggesting the potential for future qualitative exploration.This research is pioneering in its establishment of strong evidence regarding the importance of employees' perceptions of PMS effectiveness in enhancing organizational effectiveness. It underscores the significant contribution that adopting the Balanced Scorecard and a PMS can make to organizational success.