External Performance Measures Research Articles

The Relationship between External and Internal Performance Measures of the Firm: A Reassessment by the Econometrics of Dynamic Non-Stationary Panels (La Relation Entre Les Mesures De Performance Externes Et Internes De La Firme: Un Réexamen Par L’Économétrie Des Panels Dynamiques Non Stationnaires)

This article uses the recent developments in the econometrics of non-stationary dynamic panels to reassess the relationship between external and internal performance measures of the firm. The test of Im, Pesaran and Shin (2003) and the test of Pedroni (2004) were applied on a sample of 420 U.S. firms over the period (1990-2004) to verify the existence of a long term equilibrium between the market value added (MVA) of the firm and four measures of internal performance.

Water uses and productivity of irrigation systems

Reducing overall water diversions for agriculture, while maintaining or increasing production to keep up with increasing world population, has been and will continue to be a challenge. Yet there is not good agreement regarding the programs needed to improve the productivity of agricultural water use, nor what increases are feasible. It is recognized that field irrigation is inherently nonuniform. So also is the distribution of water to users and water delivery service nonuniform. Here, we suggest that crop-scale irrigation uniformity can be examined at a project scale by understanding how field, farm and project irrigation systems contribute to nonuniformity. We also discuss the interrelation between project scale uniformity and the relative irrigation water supply, and their combined impact on project productivity. We provide an example which relates internal measures of project performance (e.g., water distribution operations) and external measures of project performance (e.g., project-wise water productivity).

Contemporaneous relationship between EVA and shareholder value

This paper investigates the assertions that EVA is more highly associated with shareholder wealth and firm values than are traditional performance measures. Two commonly used value-based performance metrics – namely, Total Shareholder Return (TSR) and Tobin's Q – were also considered to highlight the value-relevance of EVA vis-a-vis these measures in predicting shareholder wealth. Using a panel sample of about 1000 American firms over the period 1990–2002, the study found compelling evidence consistent with the notion that EVA outperforms other traditional performance measures in explaining shareholder wealth. Value-relevance tests reveal EVA to be more highly associated with shareholder wealth than TSR and Tobin's Q. The incremental value-relevance tests have also suggested that EVA possesses the largest explanatory power over TSR and Tobin's Q. These results conclusively support the claims made by EVA proponents and further support the potential usefulness of EVA metric for internal and external performance measurement.

Males and females differ in brain activation during cognitive tasks

To examine the effect of gender on regional brain activity, we utilized functional magnetic resonance imaging (fMRI) during a motor task and three cognitive tasks; a word generation task, a spatial attention task, and a working memory task in healthy male ( n = 23) and female ( n = 10) volunteers. Functional data were examined for group differences both in the number of pixels activated, and the blood–oxygen-level-dependent (BOLD) magnitude during each task. Males had a significantly greater mean activation than females in the working memory task with a greater number of pixels being activated in the right superior parietal gyrus and right inferior occipital gyrus, and a greater BOLD magnitude occurring in the left inferior parietal lobe. However, despite these fMRI changes, there were no significant differences between males and females on cognitive performance of the task. In contrast, in the spatial attention task, men performed better at this task than women, but there were no significant functional differences between the two groups. In the word generation task, there were no external measures of performance, but in the functional measurements, males had a significantly greater mean activation than females, where males had a significantly greater BOLD signal magnitude in the left and right dorsolateral prefrontal cortex, the right inferior parietal lobe, and the cingulate. In neither of the motor tasks (right or left hand) did males and females perform differently. Our fMRI findings during the motor tasks were a greater mean BOLD signal magnitude in males in the right hand motor task, compared to females where males had an increased BOLD signal magnitude in the right inferior parietal gyrus and in the left inferior frontal gyrus. In conclusion, these results demonstrate differential patterns of activation in males and females during a variety of cognitive tasks, even though performance in these tasks may not vary, and also that variability in performance may not be reflected in differences in brain activation. These results suggest that in functional imaging studies in clinical populations it may be sensible to examine each sex independently until this effect is more fully understood.

A Research Agenda for Studying the Effect of Emergency Department Crowding on Clinical Education

A Research Agenda for Studying the Effect of Emergency Department Crowding on Clinical Education

Gender differences in the self-assessment of surgical residents

Background Despite equivalent performance as assessed by objective external measures, women tend to underestimate their abilities compared with their male counterparts. Methods The difference in ordinal values from faculty and resident self-evaluations was calculated for each general and plastic surgery resident. Objective external performance measures were compared for female and male residents. Results Male and female residents performed equivalently. All residents underestimated their abilities compared with faculty assessment; however, general surgery residents did so to a greater degree ( P < .05). Female residents demonstrated a greater degree of underestimation than did their male colleagues; however, this was not statistically significant. Conclusions Although female resident surgeons are generally confident in their abilities, this may be in contrast to the self-perception of many female medical students. Consideration of gender differences in self-perception may be important when providing feedback to female students and residents.

Adaptive versus Proactive Behavior in Service Recovery: The Role of Self‐Managing Teams

ABSTRACTIn this article, we develop a conceptual model of adaptive versus proactive recovery behavior by self‐managing teams (SMTs) in service recovery operations. To empirically test the conceptual model a combination of bank employee, customer, and archival data is collected. The results demonstrate support for independent group‐level effects of intrateam support on adaptive and proactive recovery behavior, indicating that perceptual consensus within service teams has incremental value in explaining service recovery performance. In addition, we provide evidence that adaptive and proactive recovery behavior have differential effects on external performance measures. More specifically, higher levels of adaptive performance positively influence customer‐based parameters (i.e., service recovery satisfaction and loyalty intentions), while employee proactive recovery behavior contributes to higher share of customer rates.

Service recovery at a financial institution

Empirical research on quality improvement in service organisations has been growing in recent years but it still lags behind the developments observed in manufacturing. It has been generally recognised that more research is needed in the field, especially with regard to the application of quantitative methods that can help managers in the decision‐making process. Results of research carried out in a bank are presented, focusing the main aspects of the service recovery process after a complaint has occurred. A specific methodology is proposed to analyse the failures and corresponding complaints in service delivery, with the ultimate goal of articulating internal and external measures of performance. The methodology provides a better knowledge of the impact caused by operational factors (internal measures) on customer perceptions (external measures), so that management actions can then be taken accordingly.

Measuring performance in operational management and customer service quality: A survey of financial and non-financial metrics from the Australian golf industry

There are over 1,500 golf courses in Australia, of which almost 400 are publicly owned. These courses are the focus of a large and vibrant industry, with an estimated turnover of A$365m per year. Furthermore, Australian Bureau of Statistics (ABS) surveys regularly place golf in the top three sports and physical activities participated in by Australian adults. The major form of external performance measurement of golf courses is a subjective list of experts' perceptions of the ‘top 100 golf courses’. Internally, the financial bottom line of profit and loss statements is usually the only other item on the course ‘scorecard’. Little has been done in terms of developing performance indicators that are applicable for widespread external use in golf course management. The research reported in this paper has addressed this lack of external performance measures with the development of performance indicators that are applicable for use in the operational management of golf courses. The first phase of the study concluded in 1999, and was funded by the CERM Performance Indicators (CERM PI®) project based at the University of South Australia and a number of Australian local government councils and industry partners. A total of 41 performance indicators were developed to represent financial and non-financial areas of operational management, plus 21 attributes of customer service quality. This paper also reports on limitations identified during the trialing of the instruments and protocols, and makes recommendations for ongoing research.

Economic Value‐Added: A Review of the Theoretical and Empirical Literature

With increasing pressure on firms to deliver shareholder value, there has been a renewed emphasis on devising measures of corporate financial performance and incentive compensation plans that encourage managers to increase shareholder wealth. One professedly recent innovation in the field of internal and external performance measurement is a trade‐marked variant of residual income known as economic value‐added (EVA). This paper attempts to provide a synoptic survey of EVA's conceptual underpinnings and the comparatively few empirical analyses of value‐added performance measures. Special attention is given to the GAAP‐related accounting adjustments involved in EVA‐type calculations.

Determinants and performance impacts of external technology acquisition

An important issue technology managers face today, and a vital component of any coherent technology strategy, concerns the decision to chose between developing technical capabilities internally or acquiring them through external means. While there is a clear indication in the literature of a greater reliance on external sources of technology, the factors driving this phenomenon and the potential benefit to firm performance have received limited empirical attention. This study addresses these issues by testing the relationships between several potential determinants of external technology sourcing, and the differential impacts of external vs. internal sourcing on firm performance.

The competitive analysis model

The economic contribution that small firms make is being increasingly recognised. Consequently robust strategic benchmarks for small firms must be extremely valuable not just for the firms themselves but also for the wider economic community. The Competitive Analysis Model (CAM) is a new approach to the strategic benchmarking of small firms. Currently this model comprises 893 firms on which are held 320 separate data items. These data items are used to provide individual firm reports so that participating firms can benchmark their performance in terms of measures such as: growth rates, internal performance measures, external performance measures and strategic priorities. The benchmarks are provided in two major manners: sectoral comparisons so that a firm can benchmark its performance with others of a similar size in the same industry sub‐sector and cross‐sectional comparisons so that a firm can benchmark its performance with others of similar size irrespective of the industry in which they operate. This article describes the operation of CAM and illustrates its operations through a typical CAM report.

An Evaluation of the Impact of External Quality Monitoring on a Higher Education College (1993–98)

ABSTRACT With the establishment, in August 1997, of a new UK‐wide Quality Assurance Agency for Higher Education (QAA), it is timely to reflect on the impact of the two principal forms of external quality monitoring which the QAA has replaced. First, the quality assessment by the funding councils, whose five‐year cycle of teaching quality assessment in universities and colleges in Scotland and Wales, which commenced in 1993, is now complete. Second, institutional quality audits of universities and colleges, conducted by the Higher Education Quality Council (HEQC) between 1993 and 1997. This paper reports the results of a five‐year action research study conducted at a college of higher education. The particular focus of the study was on issues arising from the development and implementation of a quality assurance system at the study institution, and attempts to reconcile requirements for accountability and efforts to encourage quality improvement. The paper reviews and evaluates the impact of each of the forms of external monitoring, teaching quality assessment and institutional audit, on the study institution. Results are presented using qualitative and quantitative data drawn from external performance measures, such as the Scottish Higher Education Funding Council (SHEFC) and HEQC quality assessment and audit reports, and internal measures of staff experience and perceptions. Lessons are drawn in relation to perceived benefits, or otherwise, of external quality assessment and quality audit, and consideration is given to the implications which the findings have beyond the study institution and the Scottish higher education sector, and in particular for the newly established Quality Assurance Agency.

Limitations of student evaluations of curriculum

Medical student surveys are used extensively in the development and modification of curriculum. The purpose of this study was to look at medical student surveys of a radiology lecture series, evaluating the accuracy of student perceptions of learning and factors affecting them. After a "Case of the Week" lecture series, 156 3rd-year medical students returned a survey evaluating the experience with 10 questions on a four-point scale (1 = disagree, 4 = agree very much) and took a clinical competency assessment (CCA) examination with a radiology substation. Survey responses were compared with actual examination performance, analyzed for how overall learning was characterized in specific educational objectives, and evaluated for factors affecting perceived learning. The mean response for perceived CCA examination preparedness was 1.83. The mean radiology station test score was 90.43%. Correlations between student perception of learning and the scoring of focused learning objectives ranged from 0.33 to 0.48 (P < .01). Students responding 1 to items assessing perceived lecture organization, stimulation to read, and interest in the field of radiology had mean scores for perception of overall learning of 2.09-2.44 and mean scores for recommendation of course continuation of 1.68-2.46. Students responding 4 had means of 3.25-3.81 and 3.06-4.0, respectively. Student perceptions of the value of curriculum were inaccurate compared with external measures of performance, and students poorly related their general impressions to specific learning objectives. Perceived lecture organization, stimulation to read, and interest in radiology as a specialty affected perceived overall learning and perceived value of the lecture series.

The standardized family: an innovation in primary care education at the University of Massachusetts.

In 1995 as part of The Robert Wood Johnson Foundation's Generalist Physician Initiative, the University of Massachusetts (UMass) Medical School developed the "standardized family" as a new model for teaching the essential elements of primary care in a core curriculum format outside of the clinical setting. Using this model, a hypothetical family unit (the "McQ Family") serves as the focus for case-based clinical problem solving. This paper describes the standardized family model and provides two years of evaluation outcomes such as curriculum assessments, student performance outcomes, and correlation with external measures of clinical performance to support the effectiveness of this educational model. It discusses the transferability of the standardized family model from UMass Medical School to Pennsylvania State University College of Medicine and uses Pennsylvania State's adaptation (the "Hershey-Penn Family") to illustrate how the standardized family can be customized to integrate a core curriculum into a three-year longitudinal primary care program. The authors suggest that the standardized family model has the potential to meet a broad range of primary care teaching needs at other institutions.

The Utility of External Performance Measurement Tools in Program Evaluation

Many rehabilitation hospitals use formal measurement tools to evaluate program performance. A potential advantage to using the Functional Independence Measure instrument through the Uniform Data System for Medical Rehabilitation (UDSMR) is that it provides information that allows an institution to compare its level of performance to those of other facilities. To assess whether joining UDSMR, along with an institution's continuous quality improvement efforts, could be associated with improved program performance, the records of a rehabilitation hospital's internal inpatient Program Evaluation System (PES) were reviewed for 6 fiscal years (1990-1995). Quality improvement efforts during 1995 (during which a 51% improvement in length of stay efficiency was noted) included education for staff, feedback on team performance, and efforts to formulate clinical pathways. Although external measures of performance do not have a direct effect on quality improvement, they could help identify areas of potential improvement that might not be appreciated when internal assessment systems are used alone.

Performance on the radiology component of a critical clinical skills examination.

Clinical competence certification is now required in some specialties in medicine. A Comprehensive Clinical Assessment (CCA) was created to test mastery of critical skills by students at the end of the 3rd year of medical school. The CCA is a series of stations that test skills the faculty consider important for all medical students (eg, breast examination, electrocardiogram reading, chest pain assessment, ophthalmology photographs). The radiology station was designed to evaluate imaging skills believed to be taught and learned in the core 3rd-year rotations. External measures (National Board Examinations, grade point average, and overall score) of clinical performance of the 608 medical students who completed the CCA examination between 1991 and 1993 were found to be correlated with the radiology station scores. The radiology station in the CCA examination is a reproducible measure of clinical performance.

Managerial implications of flexible manufacturing for small/mediumm-sized enterprises

Small/medium-sized enterprises (SMEs) constantly face challenges as they react to changing environmental factors such as the emergence of worldwide markets and standards for better product quality, demands for faster delivery times and closer business partnerships. These companies must bring together people, resources and facilities to develop, manufacture and market products with an ongoing commitment to accept and react to changing market conditions. Recently, flexibility has been widely recognized as a distinctive competence leading to competitive advantage, and thus flexible manufacturing (FM) technologies serve as a strategic asset to accomplish operations strategy. The SMEs must develop a framework to protect and enhance this asset. Only with the proper organizational structure, culture and external alliances can an SME achieve the full potential of FM technologies. In this paper, we provide an overview of strategic, organizational and personnel implications of flexible manufacturing for SMEs. We also discuss the significance of alliances with external partners and performance measures for implementation of flexible and automated manufacturing technologies.

Beliefs about Children: A Comparative Study of Mothers, Teachers, Peers, and Self

This study was designed to clarify findings from the parents' beliefs literature concerning the nature and the effects of parental accuracy. Subjects were 60 second- and fifth-grade children (mean ages = 8–5 and 11–5, respectively), their mothers, and teachers. Each child responded to 4 cognitive tasks, predicted how he or she would perform on each task, made self-assessments of preferences and personality traits, and predicted the response of 2 peers to all of the measures. Both the child's mother and the child's teacher were shown the tasks and made similar predictions of the child's probable response. As in previous studies, mothers were above chance but far from perfect in predicting their children's cognitive performance and preferences and traits. Teachers were as accurate as mothers in judging cognitive abilities; they were less successful, however, on the preference and personality items. The children's predictions, whether for self or peers, were less accurate than those of the adults on all tasks. The accuracy of the mothers' predictions correlated positively with external measures of the child's cognitive performance. This finding is compatible with the Hunt “match hypothesis,” although other bases for the correlations also exist.

Managerial Pay and Company Performance: UK Electrical and Office Equipment Goods Industry

It appears that the role of money as a motivator in work tasks has increased substantially during the past decade. This applies particularly to managerial and executive grades. First, why this might be the case is discussed. Second, the literature on the early research into the pay of the chief executive is reviewed, since a major point of consideration was the relationship between CEOs′ pay and firms′ performance. Third, the evidence on profit sharing and company performance is examined, as it appears that this form of linkage has increased in the last decade, particularly for managerial and executive grades. Fourth, a model for testing the relationship between managerial remuneration and the performance of the firm is presented. This model is then applied to internal and external measures of performance for a sample of 147 firms in the UK electrical and office equipment industry for the year 1987, and conclusions are drawn.