Performance Measurement System in the Governance of Waqf Institution: A Concept Note.

Aliza Ramli,Zarinah Abdul Rasit,Faizah Darus,Fadzlina Fahmi

doi:10.32861/jssr.spi5.1026.1034

Abstract

Although reports revealed substantial improvements have been reported in the accounting and reporting of waqf properties, the lack of a sound internal control mechanism is of concern. The existing practice of performance measurement among waqf institutions is less standardised and did not consider their overall performance as a religious and voluntary institution. Organisations engagement in waqf affairs has also caused various issues relating to the ineffectiveness of management and administration of waqf assets. Thus, a systematic and comprehensive performance measurement system is required to adequately assess the performance and ensure proper governance of waqf institutions. Drawing from the Balance Scorecard (BSC) framework and Islamic concept, the paper aims to study and analyse relevant literature on the performance measurements for waqf institution and to develop a holistic performance measurement model suitable to assess the performance of waqf institutions. In this concept paper, the inductive and deductive methods besides analysis of relevant literature were utilised to arrive at the findings. A fifth perspective has been added to the traditional BSC framework. The fifth dimension focuses on the assessment of all activities of waqf institutions in accordance with the Shariah principles. The paper concludes that the governance of waqf entity can be achieved through a sound internal control system, which suggests the implementation of a shariah-based performance measurement system that incorporates both qualitative and quantitative dimensions to examine its current stance better. This type of performance measurement system can also ensure accountability and transparency of waqf institutions, as well as for them to strategize their initiatives better to contribute to long-term wealth creation of the society. The framework developed in this study can be utilised to provide one possible way for management of waqf institutions to address the issues arise from the inefficiency in managing waqf resources.

Highlights

The measurement for this study was adopted from the study conducted by Zulkefli et al (2016b) that consist of training and development (11 items), recruitment and selection (10 items), internal control policy (8 items)
The measurement for corruption risk adapted from OECD and U4 Anti-Corruption Resource Centre (2015) that consists of 10 items
The results show that all the four constructs, which are training and development, recruitment and selection, internal control policies, and corruption risk are all valid measures of their respective constructs based on their parameter estimates and statistical significance (Chow and Chan, 2008)

Summary

Introduction

Development of country leads to large infrastructure construction projects along with complexities and uncertainties (Guo et al, 2014). As such the risks of corruptions and misconducts are more prevalent. According to the president of International Transparency (TI) Malaysia, training and development, recruitment and selection, and internal control policies are the factors that will lead and improve the corruption risks in Malaysia (Akhbar, 2015). The success of the organization and human management, depends on the effectiveness of human resource practices such as the effectiveness of training and development programs, good recruitment and selection structures and processes and the effectiveness of internal controls

Objectives

Methods

Findings

Discussion

Conclusion