The Effect of Balanced Scorecard Understanding on Employee Performance with Career System and Compensation System as Moderating Variable

Abstract

This study aims to explain the moderating role of the compensation and career system on the effect of employees’ understanding of balanced scorecard (BSC) on the performance of PT BRI (Persero) employees in the Surabaya work area. Employee performance appraisal, which has now been developed in most companies/organizations, is the balanced scorecard (BSC). The sample of employees studied were 200 people. The research model was analyzed using the Structural Equation Modelling (SEM) with moderation interaction. The research findings show that: (1) the BSC understanding has a significant positive effect on employee performance; (2) the career system has a significant positive effect on employee performance; (3) the compensation system has a significant positive effect on employee performance; (4) the career system significantly strengthens the influence of the BSC understanding on employee performance, and (5) the compensation system significantly strengthens the influence of the BSC understanding on employee performance. These findings imply that the leadership of PT BRI (Persero) should carry out a synergistic strategy by emphasizing the internal perspective to improve understanding of BSC so that it is more in line with the applied career system, so it is hoped that this career system will also have a positive impact on strengthening the influence of BSC understanding on employee performance.