Determination of organisational essential needs as the basis for developing amaṣlaḥah-based performance measurement

Abstract

PurposeThe purpose of the study is twofold: first, it is to develop each aspect ofmaṣlaḥah ḍarūriyah(essential needs), i.e.dīn(faith/religion),nafs(soul),ʿaql(intellect),naṣl(descendants) and mal (wealth), into various aspects of organisational essential needs; second, it is to formulatemaṣlaḥah-based performance measurement.Design/methodology/approachThe research is an exploratory study that uses a two-stage design: defining the research question and developing the research design. The research question is how each element ofmaṣlaḥah ḍarūriyahcan become an element of organisational essential needs. The research design developed is to formulatemaṣlaḥah-based performance measurement.FindingsThe study concludes thatmaṣlaḥah ḍarūriyahcould be developed as a basis for identifying organisational essential needs. The five elements ofmaṣlaḥah ḍarūriyahare developed into the following organisational essential needs: worship orientation, internal process orientation, talent orientation, learning orientation, customer orientation and wealth orientation.Maṣlaḥah-based performance measurement uses five variables: strategic objective, measure, formula, target and strategic initiatives and applies the modified plan – do – check – action cycle: performance planning, performance implementation, performance evaluation and performance action.Practical implicationsOrganisational essential needs can be developed by Islamic financial institutions (IFIs) into performance measurement. IFIs have six essential needs that can be developed into performance variables. Key performance indicators that can be developed for each need are worship orientation (social responsibility, regulatory compliance and Sharīʿah compliance); internal process orientation (innovation process, digital adaptation and employee satisfaction); talent orientation (career development, talent pool, compensation and benefits); learning orientation (training programme, training evaluation and return on training investment); customer orientation (customer engagement, customer satisfaction, customer survey and promotion programme); wealth orientation (profitability, cost-cutting, share prices, dividends, cost efficiency and financial sustainability).Originality/valueThis paper contributes to new knowledge. The study attempts to discuss the organisational essential needs based on themaṣlaḥah ḍarūriyahconcept, while previous studies discussed organisational needs based on Maslow’s hierarchy of needs. In developing performance measurement, organisational performance is measured in a balanced manner. According to the concept ofmaṣlaḥah, not only financial factors but also worship, internal processes, talents, learning and customers define organisational needs. Thus, organisational needs are considered not only in terms of material factors but also in terms of spiritual (worship) factors.