Factors influencing the effectiveness of performance measurement systems

Abstract

Purpose -The purpose of this paper is to examine the association between the use of multidimensional performance measures and four organizational factors with the effectiveness of performance measurement systems (PMSs). Design/methodology/approach -Data were collected by mail survey questionnaire from a random sample of 455 senior financial officers in Australian manufacturing organizations. Findings -The results reveal that the use of multidimensional performance measures is associated with two dimensions of the effectiveness of PMSs (performance and staff related outcomes). The results also reveal that organizational factors were associated with the effectiveness of PMSs. Specifically, top management support was found to be associated with the effectiveness of PMSs in respect to the performance related outcomes, and training was associated with the staff related outcomes. Practical implications -The findings provide managers with an insight into the desirable PMS characteristics and the specific organizational factors that they can focus on in order to enhance the effectiveness of their performance measurement system. Originality/value -This study contributes to the limited empirical research examining the effectiveness of PMSs regarding the extent to which organizational processes are achieved. In addition, the study provides an empirical analysis of the association between the five perspective (financial, customer, internal business process, learning and growth, and sustainability) BSC model and four organizational factors with the effectiveness of PMSs.

Utilization of Balanced Scorecard and the Effect of its on the Financial Performace of Companies in the Czech Republic

“…v˘konnostní pyramidou [33], Balanced Scorecardem (BSC) [25] a v˘konnostním prizmatem [38], existuje zde stále nedostatek kvalitních studií zab˘vajících se vlivem vyuÏití tûchto konceptÛ na samotnou v˘konnost [47].…”

Defining Organizational Context for Corporate Sustainability Assessment: Cross-Disciplinary Approach

“…It is not enough to develop an efficient PMS; it is also important to study the context in which this system will be used. Thus, a participation of employees in the development of PMS directly contributes to its effectiveness through the improved communication, knowledge utilization, increased job understanding, less resistance to change and commitment to the PMS [41].…”

“…Nowadays, PMS includes multi-dimensional measurements, where "sustainability" is seen as one of the dimensions. With sustainability becoming one of the main concerns for stakeholders-e.g., customers, investors and governments-sustainability balanced scorecards were advocated [41]. PM can be used for different domains such as product, process, function (e.g., product development), organization, supply chain and individuals.…”

“…Desired Outcomes of the PMS Use Phase Include [41] Desired Outcomes of the CSA Use Phase Include • PMS motivates performance;…”

“…The desired outcomes of the implementation and use phases have been identified in the literature before adjusting them to the CSA (Table 4). Moreover, factors that influence the effectiveness of the PMS' implementation and use phases have been identified through the extensive search of the review papers, see [29,41,[44][45][46][47]63,64]. Table 4.…”