Therefore, it demotivates managers to invest
on innovative products and technologies. It is because all the investment costs
will be recognised in the current accounting period but the benefits or
revenues gained by the investments can only be recognised in the future. This
will cause the EVA of the current period low which the manager may be
questioned by the shareholders and lead to layoff. However, non-financial KPIs are long-term
orientated, Ittner and Larcker (2000) point out non-financial KPIs can provide
a closer link to long-term organisational strategies. Improving education
level, innovations and customer satisfactions can bring economic benefit in the
future. So they also prevent managers to focus on the short-term
financial measures that it provides a balanced view about the organisational