Integrated Performance Measurement System Research Articles

Utilizing the balanced scorecard for R&D performance measurement

R&D programs are critical for many firms to achieve and sustain competitive advantage. Yet, measuring R&D performance over time can be quite complex due to inherent uncertainty. The paper responds to calls in the R&D literature to explore integrated performance measurement systems that capture financial and nonfinancial performance. We integrate the Stage‐Gate approach to R&D management with the Balanced Scorecard to present a framework to show how firms can link resource commitments to these activities and the firm's strategic objectives. In this paper, we provide specific examples of how firms can apply this integrated performance measurement system to the R&D function.

Integrated corporate performance measurement systems

Corporate performance measurement is a key prerequisite for successful management, a process of guiding the enterprise from the existing to the particular, desired performance. Traditional performance measurement systems, based on the use of financial indicators, do not satisfy the needs of modern enterprises. They provide the measurement of the past results, but they do not provide enough quality information for improvement of performance in the future. Nowadays, a great number of different performance measurement systems have been developed. They have a more complex approach to performance analysis, using both financial and non financial indicators grouped in a certain number of performance perspectives. The disadvantages of this modern performance measurement systems can be diminished through their integration, which leads to creating new, integrated performance measurement systems.

Comparison of Quality of Care for Patients in the Veterans Health Administration and Patients in a National Sample

The Veterans Health Administration (VHA) has introduced an integrated electronic medical record, performance measurement, and other system changes directed at improving care. Recent comparisons with other delivery systems have been limited to a small set of indicators. To compare the quality of VHA care with that of care in a national sample by using a comprehensive quality-of-care measure. Cross-sectional comparison. 12 VHA health care systems and 12 communities. 596 VHA patients and 992 patients identified through random-digit dialing. All were men older than 35 years of age. Between 1997 and 2000, quality was measured by using a chart-based quality instrument consisting of 348 indicators targeting 26 conditions. Results were adjusted for clustering, age, number of visits, and medical conditions. Patients from the VHA scored significantly higher for adjusted overall quality (67% vs. 51%; difference, 16 percentage points [95% CI, 14 to 18 percentage points]), chronic disease care (72% vs. 59%; difference, 13 percentage points [CI, 10 to 17 percentage points]), and preventive care (64% vs. 44%; difference, 20 percentage points [CI, 12 to 28 percentage points]), but not for acute care. The VHA advantage was most prominent in processes targeted by VHA performance measurement (66% vs. 43%; difference, 23 percentage points [CI, 21 to 26 percentage points]) and least prominent in areas unrelated to VHA performance measurement (55% vs. 50%; difference, 5 percentage points [CI, 0 to 10 percentage points]). Unmeasured residual differences in patient characteristics, a lower response rate in the national sample, and differences in documentation practices could have contributed to some of the observed differences. Patients from the VHA received higher-quality care according to a broad measure. Differences were greatest in areas where the VHA has established performance measures and actively monitors performance.

Fuzzy non-radial data envelopment analysis (DEA)measures of technical efficiency in support of an integrated performance measurement system

Most of the empirical literature in data envelopment analysis (DEA) has focused on the computation primarily of radial technical efficiency measures whereas, for the most part, non-radial measures have not been as popular. Even though the radial measures of technical efficiency are commonly used, they fail to satisfy Koopmans' definition of technical efficiency that equates technical efficiency with membership in the efficient subset. Additionally, for most production studies, the traditional assumption of crisp production plans can be substituted with the assumption of fuzzy production plans as proposed by fuzzy set theory. This study proposes a fuzzy DEA approach that computes fuzzy non-radial technical efficiency measures and implements the approach for a newspaper preprint insertion manufacturing process. As a consequence of this implementation, manufacturing process improvement interventions are ecommended. The computation of non-radial efficiency measures in conjunction with the radial measures allows for a more comprehensive integrated performance measurement system.

Driving continuous improvement

The quality of improvement depends on the quality of leading and lagging performance indicators. For this reason, several tools, such as process mapping, cause and effect analysis and FMEA, need to be used in an integrated way with performance measurement models, such as balanced scorecard, integrated performance measurement system, performance prism and so on. However, in our experience, this alone is not quite enough due to the amount of effort required to monitor performance indicators at operational levels. The authors find that IT support is key to the successful implementation of performance measurement-driven continuous improvement schemes.

Measuring Primary Care Practice Performance Within an Integrated Delivery System: A Case Study

This article examines the use of an integrated performance measurement system to plan and control primary care service delivery within an integrated delivery system. We review a growing body of literature that focuses on the development and implementation of management reporting systems among healthcare providers. Our study extends the existing literature by examining the use of performance information generated by an integrated performance measurement system within a healthcare organization. We conduct our examination through a case study of the WMG Primary Care Medicine Group, the primary care medical group practice of WellSpan Health System. WellSpan Health System is an integrated delivery system that serves south central Pennsylvania and northern Maryland. Our study examines the linkage between WellSpan Health's strategic objectives and its primary care medicine group's integrated performance measurement system. The conceptual design of this integrated performance measurement system combines financial metrics with practice management and clinical operating metrics to provide a more complete picture of medical group performance. Our findings demonstrate that WellSpan Health was able to achieve superior financial results despite a weak linkage between its integrated performance measurement system and its strategic objectives. WellSpan Health achieved this objective for its primary care medicine group by linking clinical performance information to physician compensation and reporting practice management performance through the use of statistical process charts. They found that the combined mechanisms of integrated performance measurement and statistical process control charts improved organizational learning and communications between organizational stakeholders.

Integrated performance measurement design: insights from an application in aircraft maintenance

This paper describes the development and application over a 4-year period of a performance monitoring system based upon mathematical programming methods. The setting is the engineering services division of an international airline. An integrated performance measurement system is developed that extends the balanced scorecard into an holistic appraisal system incorporating multiple perspectives and supporting measures. Data envelopment analysis (DEA) is used to quantify changes over time in productivity and continuous improvement. Fine-tuning of the DEA model to reflect the airline’s strategy provides a balanced view of organizational performance. Further refinement and depth of analysis is obtained through the use of Malmquist techniques to trace the sources of performance change to efficiency and organizational learning. A noteworthy feature of the project was the very positive response from within the enterprise to the introduction and use of an application that provides appropriate and incisive performance feedback.

A dynamic performance measurement system: evidence from small Finnish technology companies

The purpose of this paper is (1) to present a new dynamic integrated performance measurement system (IPMS) based on a managerial view, and (2) to present preliminary empirical evidence on the importance of performance measures in small Finnish technology companies using the IMPS as the framework for the survey. The aim is to develop a useful managerial tool for measuring and improving performance in business firms. The system is intended to include a comprehensive set of relevant factors and dimensions, which together form an integrated managerial system of performance measurement. The proposed IPMS is linked to the idea of activity-based costing (ABC). It consists of seven main factors and the causal chain connecting these factors. The factors are classified as two external factors (financial performance and competitiveness) and five internal factors (costs, production factors, activities, products, and revenues). The main idea of the IPMS is to follow the use (transformation) of resources from the point of the very first (elementary) resource allocation to the point when the results of the allocation are realized as revenues. In the causal chain, the factor at any point along the chain is regarded as a determinant of the factor that succeeds it. Moreover, the next resource allocation decision is dynamically affected by the results of the former decisions, thus allowing for learning-by-doing. The IPMS is also used as a framework for a postal questionnaire completed by 93 small Finnish technology firms. These companies put great emphasis on the importance of the employee motivation (production factors dimension), customer satisfaction (products), product profitability (revenues), company profitability, liquidity, and capital structure (financial performance) in the measurement of performance. Factor analysis is used to classify the companies into three groups on the basis of performance measurement.

Performance measurement: flying in the face of fashion

This exploratory paper suggests that the current fashion for balanced, integrated performance measurement systems has led to managers focusing on improving the accuracy of the measures used rather than managing the business. Using a grounded theory approach, based on one of six "successful" service organisations identified in an earlier study, this empirical study shows one organisation that has resisted this trend. To ensure that time is not wasted on unnecessary accuracy the organisation uses "good enough" and relevant measures focused on action and improvement. The measures used not only evaluate initiatives but encourage them and the sharing of information and ideas. For this organisation performance measurement was clearly a facilitator not the raison d'etre.

Applying a Balanced Scorecard to Health Care Organizations

This article looks at the design and implementation of an integrated performance measurement system at a nonprofit community hospital–Community Memorial Hospital of Menomonee Falls, Wisconsin. In particular, the article discusses how the hospital developed and applied a balanced scorecard. Over the past decade, Community Memorial Hospital faced both market deregulation and strong competition. It responded to these environmental pressures by joining an integrated health service delivery network with other hospitals, physicians, and institutional purchasers of health care services. Ultimately, the hospital's management implemented a balanced scorecard. Its goals were to help translate the vision for the hospital and to gain consensus; to communicate the hospital's objectives, set goals, and link strategies; to allocate the hospital's resources and establish milestones; and to provide feedback and ensure learning. The hospital's balanced scorecard consists of one composite financial performance measure and 12 nonfinancial performance measures. Each performance indicator reflects a quantitative measure of a particular strategic objective. These performance measures are expressed in terms of actual performance as a percentage of expected performance and are integrated into a single, overall performance score through a subjective weighting scheme. The balanced scorecard approach to performance measurement at Community Memorial Hospital has provided an efficient and effective way to link day-to-day operating activities to the hospital's strategic objectives. © 2000 John Wiley & Sons, Inc.

Applying a Balanced Scorecard to Health Care Organizations

This article looks at the design and implementation of an integrated performance measurement system at a nonprofit community hospital–Community Memorial Hospital of Menomonee Falls, Wisconsin. In particular, the article discusses how the hospital developed and applied a balanced scorecard. Over the past decade, Community Memorial Hospital faced both market deregulation and strong competition. It responded to these environmental pressures by joining an integrated health service delivery network with other hospitals, physicians, and institutional purchasers of health care services. Ultimately, the hospital's management implemented a balanced scorecard. Its goals were to help translate the vision for the hospital and to gain consensus; to communicate the hospital's objectives, set goals, and link strategies; to allocate the hospital's resources and establish milestones; and to provide feedback and ensure learning. The hospital's balanced scorecard consists of one composite financial performance measure and 12 nonfinancial performance measures. Each performance indicator reflects a quantitative measure of a particular strategic objective. These performance measures are expressed in terms of actual performance as a percentage of expected performance and are integrated into a single, overall performance score through a subjective weighting scheme. The balanced scorecard approach to performance measurement at Community Memorial Hospital has provided an efficient and effective way to link day-to-day operating activities to the hospital's strategic objectives. © 2000 John Wiley & Sons, Inc.

Integrated performance measurement systems: a development guide

The performance management process is seen as a closed loop control system which deploys policy and strategy, and obtains feedback from various levels in order to manage the performance of the business. The performance measurement system is the information system which is at the heart of the performance management process and it is of critical importance to the effective and efficient functioning of the performance management system. Research identifies two critical elements with respect to the content and structure of the performance measurement system. These are: integrity and deployment. The viable systems model (VSM) provides a framework for assessing the integrity of the performance measurement system. The reference model developed for integrated performance measurement systems provides a framework against which performance measurement systems can be designed and audited.

Integrated performance measurement systems: an audit and development guide

The performance management process is seen as a closed loop control system which deploys policy and strategy, and obtains feedback from various levels in order to manage the performance of the business. The performance measurement system is the information system which is at the heart of the performance management process and it is of critical importance to the effective and efficient functioning of the performance management system. Research identifies two critical elements with respect to the content and structure of the performance measurement system: integrity and deployment. The viable systems model (VSM) provides a framework for assessing the integrity of the performance measurement system, while the reference model developed for integrated performance measurement systems provides a framework against which performance measurement systems can be designed and audited.

An empirical study of division and plant performance measurement systems in selected world class manufacturing firms: linkages for competitive advantage

Abstract Organisational coordination on the firm's strategic objectives is essential to compete effectively in the global economy. A systematic approach is needed to synchronize the firm's activities in relation to its objectives. Integrated performance measurement systems provide a vehicle for improved organisational coordination. The purpose of this exploratory research was to examine the integrated performance measurement systems of six manufacturing firms identified as world class by academic and practitioner experts. A case study methodology was used to collect detailed information on division and plant strategic objectives, performance measurement systems, and performance measurement system linkages. The result of this research was the development of principles on strategic objectives, performance measurement systems and performance measurement system linkages for improved organisational coordination.