Firms use performance measures linked to incentives and the evaluation process to motivate and direct employees’ efforts towards goal congruence. In a research setting where the noise in the performance measures hinders such formal linkage, we examine how firms can achieve goal congruence. We first examine the direct relation between employees’ perceptions of the extent to which socialization mechanisms (i.e., perceptions of the extent to which employees perceive that top management communicates core values, supervisors engage in career development mentoring, and employees themselves engage in peer mentoring) are related to goal congruence. Second, we examine the process by which the relationship works. We posit that the relationship works because socialization mechanisms communicate information, which reduces employees’ uncertainty thus increasing their perceptions of career security, and in turn, employees become more attached to the firm and better impound its goals. Using survey data from 354 employees to estimate a structural equation model, our results fail to support a direct association between socialization mechanisms and goal congruence. However, we find an indirect association through employees’ perceptions of career security. We further find that the indirect effect only holds for non-union employees. Interestingly, for union employees, goal congruence is directly facilitated by employees’ perceptions of the extent to which top managers communicate core values.

Introduction

Management control systems (MCS) are mechanisms intended to communicate organizational objectives and motivate employee effort so that the firm can achieve both goal and behavioral congruence. Goal congruence is “agreement by all members of a group on a common set of objectives” while behavioral congruence is “alignment of individual behavior with the best interests of the organization regardless of the individual’s own goals” (Lanen, Anderson, & Maher, 2011, p. 446). Thus, congruence is a two-step process that occurs when employees first understand the importance of goals, and, second, engage in actions to achieve those important goals. The performance measurement system (PMS) is one well-studied control mechanism firms use to achieve congruence. Literature holds that a PMS is a communication tool that translates the firm’s strategy to employees thus clarifying the firm’s objectives and their importance (e.g., Kaplan & Norton, 2001). Furthermore, Feltham and Xie (1994) demonstrate that a first-best solution occurs when a PMS facilitates complete congruence and does not contain noise. Merchant (1982, 43) states that the “focus on measurement and feedback, however, can be seriously misleading. In many circumstances, a control system built around measurement and feedback is not feasible” (see also, e.g., Chenhall, 2007; Platts & Sobotka, 2010). These circumstances include settings where knowledge of the transformation process is unclear and where outcome measures are noisy (Ouchi, 1977; Abernethy & Brownell, 1997).