Implementation Of Performance Measurement System Research Articles

Understanding the Interrelationships Between Organizational Performance Measurement System Implementation Variables

Performance measurement (PM) systems are increasingly being adopted to manage and improve organizations’ effectiveness. However, a review of the research shows that there are a significant number of unsuccessful PM systems with indications of challenges arising during the implementation phase. A study involving subject-area experts was conducted and the analytic network process (ANP), for evaluating the multi-criteria decision model, was used to quantify the effects of the dynamic interrelationships among the model variables as well as the systemic effect of the factors on PM system implementation success (IS). The results show that Leadership Support and the Implementation Approach are the most important factors for successful implementation of PM systems. Meanwhile, factors related to training, participation, and an effective information technology system help users of PM understand the measures and identify their perceived benefits, thereby contributing to performance goals and objectives. This study provides a comprehensive and rigorous analysis by employing an expert study to evaluate and quantify the effects of model variables and their interrelationships on PM system implementation success using the ANP methodology. Managers and researchers can use the prioritization of the factors and insights regarding key interrelationships to develop more specific strategies and better manage resources of the implementation effort.

Impact Of Interactive Control In Improving Academics' Performance: Mediating Role Of Fairness

This study aims to empirically examine the direct and indirect effects of interactive control on performance by analysing the role of justice as an intervening variable. This research uses a survey approach by distributing questionnaires directly or online. The research sample obtained was 383 academics at universities throughout Indonesia. Data analysis was carried out using structural equation modelling. The results showed that interactive control has no direct effect on performance. However, interactive control indirectly affects academic performance through fairness. This suggests the importance of improving fairness in effective performance measurement to improve academic performance. The novelty of this study lies in equity as an intervening variable in the relationship between interactive control and performance. The findings of this study provide practical insights for higher education management to implement an interactive control approach that can increase the sense of fairness towards implementing performance measurement systems to impact academic performance positively.

PERFORMANCE MEASUREMENT SYSTEMS IN ENGINEERING ORGANISATIONS

Performance measurement systems (PMSs) are vital for quantifying organisational efficiency and effectiveness, empowering decision-makers to manage processes for operational, and strategic realisation. Despite extensive research, difficulties with implementation persist, impeding institutionalisation. While the factors influencing PMS implementation have been studied, research specific to engineering organisations is limited. This paper employs a bibliometric analysis to confirm PMSs’ relevance in modern organisational contexts and explores a metric, a quantitative tool, for equipment performance evaluation. Twenty-one prevalent implementation factors, categorised under the ‘6Ms’ of production, are identified from the literature. These factors are substantiated for the modern engineering domain using detrimental implementation factors unearthed in Company X, a South African dairy product producer. The resolution of these factors, particularly related to data in Company X, is proposed through a Microsoft Excel workbook facilitating overall equipment effectiveness (OEE) calculations. This validated and refined solution enhances PMS effectiveness, converting data into actionable information for management benefits.

The IT Governance Role on Internal Accountability and Performance in Higher Education Institutions: Testing the Intervening Role of Performance Measurement System and IT Capabilities

Purpose: This study examined the role of IT governance practices on internal accountability and performance of higher education institutions (HEIs) through two intervening variables, namely performance measurement system (PMS) and IT capabilities. Also, it examined the IT governance role in PMS implementation and IT capabilities.Method: This study was conducted at HEI on the Island of Java using a survey approach with hypothesis testing by employing a structural equation modelling-partial least square technique (SEM-PLS). 149 HEIs were successfully included in this study.Findings: The results implied that IT governance could directly promote good PMS implementation and IT capabilities. Furthermore, IT governance was found not to be directly related to internal accountability and performance of HEIs, but it had to go through the PMS implementation as intervening. These results indicate that good IT governance did not necessarily provide added value to HEIs if it is not accompanied by a good PMS implementation. Novelty: This study presents empirical evidence that addresses the research gap on the role of IT governance on internal accountability and performance by putting the PMS policy as intervening variable. This study also presents novelty in terms of setting, namely HEIs where competitive advantage is needed to maintain viability, in the midst of increasingly stringent HEIs competition.

The Interactive Effect of Cognitive Frame and Performance Measurement System Scope on Managers’ Choice of Sustainable Suppliers

ABSTRACT Managerial response to stakeholders’ demands for profitability and sustainability can have long-lasting effects on organizations, stakeholders, and society. In an era dominated by business-case thinking, managers’ cognitive processes are particularly important. Yet alternatives to business-case thinking are underexamined. Operationally, to help direct attention toward sustainable goals, organizations implement performance measurement systems (PMS) with varying scope differences in the composition of financial and nonfinancial measures. To date prior research is inconclusive regarding the effectiveness of such actions. This study responds by mobilizing paradoxical thinking, an alternative form of cognition posited to better support complex managerial decisions. Experimentally, I investigate how cognitive frames moderate the effect of a broad versus narrow PMS in sustainable decision making. The results reveal managers who approach sustainable decisions with a paradoxical cognitive frame and are evaluated using broad PMS select more sustainable suppliers. These findings are important given the social and environmental implications of sustainability judgments.

The Mediating Role of Performance Measurement System in the Relationship between Information Technology Capabilities and University Performance

To improve performance, higher education institutions (HEIs) have attempted to formulate performance measurement system (PMS) policy and information technology (IT) development. The purpose of this study is to examine the role of IT capability on financial performance and operational performance of private HEIs in Indonesia through PMS implementation as mediating variable. Using purposive sampling method, 149 questionnaire responses obtained from private HEIs located on Java Island, Indonesia. The respondents are head of human resource and finance department and person in charge of technology and information systems in the sample universities. The data were analysed using the Structural Equation Modelling (SEM) method. This study found that IT capabilities were only associated with both financial and operational performance indirectly through PMS implementation. Thus, this study confirmed that PMS played a role as mediating variable. This study contributes to the develop the body of knowledge, especially related to the role of IT capabilities and PMS role in enhancing both the financial and operational performance of HEIs. Practically, this research provides beneficial suggestions for HEI management to improve HEI performance.

Implementation of performance measurement system with performance prism approach - a case study of a medium enterprise

Measuring performance is crucial, yet occasionally taken for granted by small and medium enterprise (SME). Building a good performance management system is therefore essential for SMEs. The research is a case study in a medium size enterprise in greater Jakarta area. The research assisted the studied company to develop performance indicators using performance prism approach. Afterwards, key performance indicators (KPIs) were finalised using analytical hierarchy process (AHP) and Pareto principle. Final KPIs were then measured and visualised using the traffic light system (TLS) and objective matrix (OMAX) calculation. The results show that the combination of approaches can give a systematic and simpler mechanism for the studied company and can become the bases for monitoring and action plan identification.

Designing and implementing performance measurement systems based on enterprise engineering guidelines

PurposeThis conceptual paper presents a proposal for improving a performance measurement (PM) system implementation process based on enterprise engineering (EE) guidelines, which gives the process a sense of completeness.Design/methodology/approachThis paper analyzes a well-known process for PM systems implementation organized in two phases: identifying, designing and implementing the top-level performance measures; and cascading the top-level measures and identify appropriate lower-level performance measures. The proposed improvements to the studied process derive from the EE guidelines, which establish a basis for the structure of an organizational management system, the formalization and synchronization of processes, performance expectations, exception handling and change management.FindingsThe study reveals that not all EE guidelines are covered by the analyzed process, with four of them having no evidence of being adopted: involvement of people in process design and implementation; ensuring interoperability between different systems in the information structure; addressing of all possible exceptions; coherence and consistency of semantics across all processes.Originality/valueBy the lens of EE guidelines, this paper advances a how-to-guide. This paper can support managers and researchers on PM system design and implementation, given the importance and relevance of EE recommendations having a consistent and well-structured procedure.

Performance Measurement System: Implementation Process in SMEs

There is still a considerable interest in the topic of business performance, both in scientific community as well as in managerial praxis. Especially, the area of performance measurement system (PMS) and its implementation is forming a considerable scope for improvement. However, the research of PMS implementation in small and medium-sized enterprises (SMEs) have been underestimated. Despite the significant contribution of SMEs to economic growth, employment share or predominance of SMEs over large companies, a very small amount of theoretical and empirical researches has been carried out focusing on implementation of PMS in SMEs. This paper is addressing the readiness and successfulness of SMEs in PMS implementation. The aim of our research was to analyze the process of PMS implementation in SMEs and to identify factors that influence the success and satisfaction with implemented PMS and to identify problematic factors that cause failure, dissatisfaction and create limits to PMS application. Sample of our research consisted of 336 SMEs operating in Slovakia of various ages, sizes, and different approach to performance measurement. Based on results of our research, we created suggestions and a set of the key success factors to each phase of PMS implementation process that respect the specifics and nature of SMEs. Within each phase, we found evidence that several factors significantly raise the potential of successfulness of PMS implementation, and others, in contrary, are contributing to the unsuccessfulness.

Performance Driven Culture in the Public Sector: The Case of Nordic Countries

Public sector organizations face a lack of efficiency and ineffectiveness in providing their mandates due to fear of change among the public service workers. Public sector managers can instill a high performance-driven culture in employees of the public sector. For this reason, the study aims to define a set of key characteristics of organizational culture that contribute to effective performance measurement and management of public sector organizations. The qualitative research method is employed in this paper using case study comparative analysis. To get the objectives of the study, selected local governments from three different Nordic countries are analyzed. As discovered from the case study analysis, these local governments have successfully constructed and implemented performance measurement and management systems. Concurrently, they practice performance-driven culture key characteristics to achieve their organizational targets without any significant difficulties. Three key characteristics (strong performance-driven leadership, report and communicate performance, review and discuss performance) are used in all selected local governments, and one (the reward system) is missing. All four key characteristics are employed only in Helsinki, which is a benchmark for other local governments. This study’s results can thus serve as an example of best practice for other public sector organizations within Europe.

Indicators and criteria for efficiency and quality in public hospitals: a performance evaluation model

In many countries, the public sector is currently characterised by the need to improve its performance. The implementation of performance measurement systems is essential to generate better results...

Isomorphism, Human Resource Capability and Its Role in Performance Measurement and Accountability

This research tests the effects of institutional pressures, the use of performance measurement systems and accountability, and moderation effects of human resource capability between institutional pressures and the use of performance measurement systems in the Local Government institutions in Indonesia. The research aims to provide empirical evidence both quantitatively and qualitatively that isomorphism institutional pressures occurred in the scope of implementation of the performance measurement system and accountability in the public sector organizations and to show the importance of human resource capability enhancement in reducing external pressure impact. In addition, it tries to develop the correlation model of institutional pressures, human resource capability, implementation of the performance measurement system, and accountability of public sector organizations. The research used mixed methods with sequential explanatory design. The data collection used surveys and interviews in 209 regency/Special Region of Yogyakarta and Central Java local governments as samples. The research result indicated that the institutionalization process of the performance measurement is influenced by institutional pressures, especially coercive and mimetic pressures. Human resource capability was unable to weaken institutional pressures effects in the performance measurement system implementation. The research also proved that the use of a performance measurement system was able to improve local government institution accountability.

Challenges for successful implementation of Performance measurement system – case study food industry in the Republic of Macedonia

There are numbers of different performance measurement systems, all designed in order to enhance the organizational performance. Many companies show interest and attempt to implement a system for measuring organizational perfor-mance, but not many of them are successful in it. One of the key problems that companies face after creation of the system for measuring organization performance is its implementation. During the implementation, companies face with different problems and barriers. The main goal of this paper is to research the main challenges that companies face in the phase of the implementation of a system for measuring organizational performance in the food industry in the Republic of Macedonia. The paper first reviews the challenges for successful implementation of performance measurement systems that are emphasized in the literature, and after that proceeds with analysis of the main challenges regarding the implementation that companies from the food industry in the Republic of Macedonia are facing based on a perception of the employee. The overall survey findings show that the greatest challen-ge when implement a performance measurement model is the proper selection of the right KPI and providing real data.

Implementation of Performance Measurement Systems at PT. Pos Indonesian

This paper aims to carry out performance measurement at PT. Pos Indonesia, which consists of measurements of financial and non-financial performance. The preparation of this paper uses the study method of various literature from various international article sources. Public sector organizations or institutions in implementing their financial and non-financial performance measurements use a variety of steps. Therefore, the managers of PT. Pos Indonesia must adjust the appropriate performance measurement system, such as what will be used by PT. Pos Indonesia, according to the conditions of each PT. Pos Indonesian.

Proposta de sistema de medição de desempenho gerencial para uma empresa de projetos de arquitetura

Ao longo dos anos, diversas mudanças criaram um contexto favorável para a implementação de sistemas de medição de desempenho (SMD) nas organizações, o que conduziu a uma diversidade de pesquisas relacionadas ao assunto. Na esfera da construção civil, uma vasta literatura sobre SMD é encontrada, entretanto, pouco se investiga no âmbito das empresas de arquitetura. Diante do exposto, foi desenvolvida uma pesquisa qualitativa, de caráter exploratório, cujo principal objetivo é a proposição de um SMD para uma empresa de projetos de arquitetura. Para o levantamento de dados, foram aplicados um questionário e uma entrevista semiestruturada. Posteriormente, foram propostos o SMD inicial e o final após a validação da empresa. As categorias adotadas para os indicadores foram: stakeholders, eficiência, qualidade, inovação e sustentabilidade, e resultado, que proporcionaram uma estrutura aplicável tanto para o aprimoramento da gestão da empresa estudada, quanto para a implementação em outras empresas.

Performance measurement and lean maturity: congruence for improvement

The presence of a performance measurement system (PMS) along with measurement practices has the potential to foster the planning and adoption of Lean practices in a production system. Literature also agrees that a higher Lean maturity status could be correlated to a higher level of operational performance. Thus, novel approaches are needed to identify improvement opportunities for organisational initiatives, such as Lean and PMS implementation practices. However, no studies were found that addressed possible links between Lean and PMS practices in an integrated model. Thus, this paper aims to develop a framework for assessing Lean and PMS maturity in organisations to leverage combined improvement efforts. Firstly, a literature review was conducted to map existent maturity models and parameters for performance management congruence. Then, a framework was structured to connect the findings and correlate Lean and PMS maturity levels. Finally, a pilot application in a company from the chemical sector was conducted to test the framework and gather practical implications and insights. Results illustrate how Lean and PMS can evolve based on congruent improvement efforts.

Performance management practices in humanitarian organisations

PurposeWe examine how design and implementation practices for supply chain performance management that have proven successful in commercial organisations apply to humanitarian organisations (HOs) to guide the process of designing and implementing performance management in humanitarian organisations.Design/methodology/approachWe identify from the literature ten successful practices regarding the design and implementation of supply chain performance management in commercial businesses. We apply these, using action research over a four-year period, at Médecins sans Frontières (MSF) Belgium and draw conclusions from this.FindingsWe find that tools and techniques, such as workshops and technical sheets, are essential in designing and implementing supply chain performance measurement projects at HOs. Furthermore, making a link to an IT project is crucial when implementing performance measurement systems at HOs. Overall, our case study shows that performance management practices used in business can be applied and are relevant for humanitarian supply chains.Originality/valuePrevious research has argued that there are few empirical studies in the domain of performance management at humanitarian organisations. To the best of our knowledge, this paper is the first to provide a longitudinal understanding of the design and implementation of supply chain performance measurement at HOs.

Knowledge Management and Performance Measurement Systems for SMEs’ Economic Sustainability

This paper aims to explore the relationships between knowledge management (KM), performance measurement systems (PMSs), and small and medium enterprises’ (SMEs) economic sustainability in knowledge-intensive sectors. The literature demonstrates that SMEs are often characterized by unstructured KM approaches and limited PMS implementation, being at the same time affected by scarce profitability and financial issues. Adopting the knowledge-based view of the firm and the contingency theory of PMSs, we tested the impact of two alternative KM approaches (exploitation and exploration) on SMEs’ economic sustainability, measuring the moderating effect of PMS use (diagnostic and interactive). Through an ordinary least squares (OLS) regression of data collected for 219 Italian medium firms operating in knowledge-intensive sectors, this study provides evidence on how a specific KM approach supports the SME economic sustainability and how a consistent implementation and use of PMS amplify the relationship between KM and economic sustainability. Data analysis confirms the relevance of some key concepts of the knowledge-based view of the firm, especially the positive impact of the KM exploration approach on economic sustainability. Additionally, the paper extends empirical evidence for the PMS moderating effect on the KM–performance relationship. To the best of our knowledge, this is the first time that a study provides evidence for the relationships among KM, PMSs, and economic sustainability in the SME setting. Moreover, our findings lead to some managerial implications, especially they encourage SME entrepreneurs and managers to design a coherent KM approach and to implement an adequate PMS in order to support economic sustainability.

Implementation of Performance Measurement System with Performance Prism Approach

Measuring performance is crucial, yet occasionally taken for granted by small and medium enterprise (SME). Building a good performance management system is therefore essential for SMEs. The research is a case study in a medium size enterprise in greater Jakarta area. The research assisted the studied company to develop performance indicators using performance prism approach. Afterwards, key performance indicators (KPIs) were finalised using analytical hierarchy process (AHP) and Pareto principle. Final KPIs were then measured and visualised using the traffic light system (TLS) and objective matrix (OMAX) calculation. The results show that the combination of approaches can give a systematic and simpler mechanism for the studied company and can become the bases for monitoring and action plan identification.

Implementing Performance Measurement Systems in Local Governments: Moving from the “How” to the “Why”

This paper examines how Performance Measurement Systems (PMSs) are implemented in local governments where the initial context is defined by equivalent external pressures and professional expertise, in order to address the question of “why” PMS implementation patterns differ from one setting to another. The study explored the reasons behind these different patterns in a context where local governments responsible for providing a local service implemented a PMS with the direct support of professional experts, and thereby it contributes to the extant literature in the field of PMS implementation. In order to achieve this purpose, the investigation analyzed three local governments (municipalities) that were required to implement a PMS because of external legislation requirements rather than by choice and is based upon a participatory case study approach involving interviews, observations and secondary data sources. Research was conducted through the theoretical lens of Old Institutional Economics to identify three PMS implementation patterns, here called formal compliance, shared vision and technical oligarchy. The role played by three factors, power, communication and an inclination to learn, is discussed in the results, as these three factors in particular may help to explain the heterogeneity in the implementation patterns observed.