Performance measure noise can be a critical barrier to employees' learning. Using an experiment, we examine whether the effects of performance measure noise on employees' learning depends on the type of learning in which employees engage: experiential versus vicarious. We predict and find performance measure noise has a more deleterious effect on learning when such learning occurs experientially rather than vicariously. Specifically, we find experiential learners demonstrate less learning as performance measure noise increases, but vicarious learners show no such effect of performance measure noise. Collectively, our findings suggest performance measure noise and learning type play important roles in the extent to which firms realize the decision-facilitating benefits of performance measurement systems. In particular, since much of the learning in modern organizations occurs vicariously, our findings suggest performance measure noise may not be as detrimental to employees' learning as previously thought.

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