Role Of Performance Measurement Systems Research Articles

Insights on the role of performance measurement systems in the digital servitization landscape: a longitudinal case study

Insights on the role of performance measurement systems in the digital servitization landscape: a longitudinal case study

Top Management Characteristics, Performance Measurement Systems Design and Strategic Change of Reformed Public Hospitals in Indonesia

This study examined the impact of top management characteristics on strategic change in public hospitals in Indonesia, focusing on the mediating role of performance measurement system (PMS) design. Questionnaires were distributed to 157 top managers from Indonesian regional public hospitals undergoing reform. The findings indicate that younger, short-tenured top managers with business administration backgrounds are likelier to lead the strategic change, specifically the shift from a defender to a prospector strategy. Additionally, PMS design partially mediates the relationship between top managers' age, educational background, and strategic change. However, no significant mediation effect of PMS design was observed in the relationship between top managers' tenure and strategic change. These results suggest that healthcare organizations should consider their top managers' characteristics when planning and implementing strategic change. The role of PMS design in facilitating strategic change should also be carefully evaluated, especially when considering younger and less-tenured top managers as change leaders.

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 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.

The Influence of Intellectual Capital on the Performance of Higher Education Institutions: The Mediation Role of Performance Measurement Systems

Higher education institutions (HEIs) have a key role in developing a country by improving the quality of human resources. Thus, this study aims to empirically examine the determinants of HEI performance, i.e., intellectual capital and performance measurement systems. This study also investigates the mediating effect of the performance measurement system itself. This quantitative study used a questionnaire survey distributed to private higher education institutions (PHEIs) located in several provinces on Java Island, Indonesia. This study employed a purposive sampling technique with respondents' criteria of structural officials in the financial sector at private higher education institutions (PHEIs) on Java Island. The questionnaire responses obtained were 186 samples, and Partial Least Square was utilized to test the hypothesis. The results exhibited that the performance measurement systems mediated the relationship between intellectual capital and HEI performance. Further, this research contributes theoretically and practically, especially in implementing intellectual capital mobilized in the performance measurement system to improve the performance of HEIs.

Assessing and managing the impact of COVID-19: a study of six European cities participating in a circular economy project

PurposeThis paper aims to explore the role of performance measurement systems as technologies of government for the assessment and management of the effects of COVID-19 in the context of six cities involved in a large European project.Design/methodology/approachBased on the field study of a large European project, this paper relies on a comparative case study research approach (Yin, 2003). This research design allows insights into the role of central and local key performance indicators (KPIs) in managing the ongoing pandemic.FindingsThis paper explores the role of accounting in the assessment of the COVID-19 pandemic. Its findings illustrate how the “adjudicating” and “territorialising” roles (Miller and Power, 2013) of local and central accounting technologies rendered the COVID-19 pandemic calculable.Originality/valueThis paper connects central and local performance management systems in the context of the COVID-19 pandemic. It relies on a governmentality approach to discuss how different programmes and the relative KPIs were impacted by the ongoing global crisis.

Governmentality and performance for the smart city

PurposeThe purpose of this paper is to explore the role of performance measurement systems as technologies of government in the operationalisation of smart city programmes. It answers the research question: how do the development and use of performance measurement systems support smart cities in the achievement of their goals?Design/methodology/approachThis paper presents a longitudinal case study that uses an interventionist approach to investigate the possibilities and limitations of the use of performance measurement systems as technologies of government in a smart city. Interpretations are theoretically informed by the Foucauldian governmentality framework (Foucault, 2009) and by public sector performance measurement literature.FindingsThe findings address the benefits and criticalities confronting a smart city that introduces new performance measurement systems as a technology of government. Such technologies become problematic tools when the city network is characterised by a fragmentation of inter-departmental processes, and when forms of resistance emerge due to a lack of process owners, horizontal accountability and cooperation among involved parties.Research limitations/implicationsThis paper is based on a case study of a single smart city, and outlines the need for both comparative and multidisciplinary analyses in order to analyse the causes and effects of smart city challenges.Originality/valueThis paper offers a critical understanding of the role of accounting in the smart city. The ineffectiveness of performance measurement systems is related to the multiple roles of such technologies of government, which may lead to a temporary paralysis in the achievement of smart city goals and programmes.

Managing Multiple Logics: The Role of Performance Measurement Systems in Social Enterprises

This systematic literature review explores the role of performance measurement systems (PMSs) in managing multiple logics in social enterprises. Social enterprises are hybrid organizations that simultaneously pursue a social mission (social logic) and financial sustainability (commercial logic). Satisfying multiple logics often leads to tensions, which are addressed and managed through PMSs. For this, we conduct a systematic literature review to derive our conclusions. PMSs in social enterprises may assume the roles of mediator, disrupter and symbolizer. The PMS works as a mediator in combination with sincere stakeholder involvement when both logics are represented in the PMS. If a PMS represents only one logic, it increases tensions and the PMS becomes a disrupter. When the PMS is used to enhance legitimacy, the PMS assumes the role of a symbolizer. In particular, we find that PMSs are most useful for monitoring performance and enhancing legitimacy. The role of PMSs in decision-making is limited due to difficulties of integrating social and commercial logics into a single PMS. Several factors—such as decision-makers’ influence—further shape the role of PMSs.

A Study on the Role of Performance Measurement System between Team Autonomy and Organizational Performance

A Study on the Role of Performance Measurement System between Team Autonomy and Organizational Performance

Total Quality Management and Organizational Performance: the Role of Performance Measurement System

Escalation in globalization, information and advancement in manufacturing technologies have constantly contribute to the increase in demand and in the competitive manufacturing business environment. Align with the challenges facing the companies, there is a need for companies to devise relevant strategies to help them cope with the changes and sustain their competitiveness. Total Quality Management (TQM) is a management philosophy and strategy that can help improve the quality of product and production processes. Prior research highlights the importance of implementing performance measurement system (PMS) in assisting the implementation of TQM practices. Incorporating contingency theory and socio-technical system theory, this study aims to examine the relationship between TQM practices and organisational performance and to determine the influence of PMS use in the relationship. Data were collected using self-administered questionnaire survey on a sample of Malaysian manufacturing companies. Our results support the view that more extensive PMS benefits performance as we find that, firms implementing TQM with more advanced PMS especially those that include financial and nonfinancial measures have higher performance. The results revealed that the relationship is more significant for companies using more advanced PMS compared to companies that used traditional PMS.

Evidence for the Feedback Role of Performance Measurement Systems

Performance measurement systems (PMSs) are used to diagnose and remediate problems, termed the “decision-facilitating” or feedback role of management control. We examine whether use of PMSs by individual decision makers is associated with better performance. Experimental studies have isolated individual-level effects of feedback on decision quality; however, it is difficult to extend these findings to natural settings. Archival and survey studies offer evidence on the association between the presence of PMSs and performance but have had limited success in measuring decision makers’ actual use of PMSs and addressing endogeneity of the decision to use PMSs. We use unobtrusively collected data on actual PMS use in 30 K–12 charter schools over three years to test whether teachers who make greater use of two PMSs are associated with greater growth in student learning. We find that teachers’ use of PMSs is associated with increased student learning, consistent with the premise that PMSs facilitate teacher interventions and improve student outcomes. The results are both statistically and materially significant, and they are better explained by PMS use than by selection effects of better teachers using PMSs. Consistent with the organization’s focus on “at-risk” students, the strongest effects of teachers’ use of one PMS are concentrated among the lowest-performing students. In sum, we find broad support for the thesis that the feedback role of PMSs is associated with meaningful performance improvement. This paper was accepted by Suraj Srinivasan, accounting.

Performance measurement systems as generators of cognitive conflict in ambidextrous firms

This study explores the decision-facilitating role of performance measurement systems (PMSs) in firms attempting to translate competence ambidexterity (i.e., the simultaneous pursuit of exploration and exploitation) into innovation ambidexterity outcomes (i.e., the achievement of both radical and incremental innovations). Drawing on paradox and organisational conflict literature, this study emphasises the role of cognitive conflict, generated by PMSs, in shaping the relationships between competence ambidexterity and innovation ambidexterity. Based on survey data from a sample of 90 Irish firms, our findings indicate that competence ambidexterity is associated with (a) the choice to have a balanced set of performance measures, and (b) the use of PMSs for frequent and intensive debate between top managers. Furthermore, the study reveals that these choices are interdependent, as they function as complements in generating cognitive conflict, which in turn drives the realisation of innovation ambidexterity outcomes. The results also show that cognitive conflict is not directly associated with the development of competence ambidexterity, but is instead generated through the conjoint action of a balanced PMS design and the use of PMSs for intensive debate. Overall, this study demonstrates the interdependent nature of choices concerning the design and use of PMSs, and the significant role of PMSs as generators of cognitive conflict in firms attempting to achieve ambidexterity.

WHICH MODEL OF PROGRAMMING AND CONTROL FOR PRIMARY CARE ORGANIZATIONS? THE CASE STUDY OF THE ITALIAN HEALTHCARE HOMES (�CASE DELLA SALUTE�)

ABSTRACT As known, the “New Public Economy” paradigm is based on the fact that the best way to rebuild credibility and trustworthiness in the Public Administration is to invest in the audit process. Most of the modern theories on Systemic Analysis affirms that the audit process starts from evaluating outcomes. This revolutionary approach, called “Performance Cicle”, has been introduced in the Italian Public Sector in 2010; its direct effect has been an increasing attention at the final results instead of at the admin procedures themselves. The present work is a case study focused on the central role of performance measurement systems whitin the Public Administration, in particular whitin the Sanitary Sector, where a cost-effectiveness economy has expected, due to new patients’ needs. Among the most popular Quality Improvement’s validated tools, the Balance Scorecard (BSC) will be taken under special consideration for its capability to explore many different perspectives in a complex organisation. A lack in the literature has been found in the implementation of performance systems in the Primary Health Care assistance, in particular in the new organisational model called “Case della Salute” Center. Therefore, the present project’s purpose is to fill in this gap, highlighting outcomes produced by the application of the BSC in a new health care context. The study explains threats and opportunities from the case of a Casa della Salute in Parma, where a new framework has been adopted recently. Keywords Management, Balancescore Card, Control, Performance, Control system, Primary Care

Strategic Resources, Use of Performance Measurement System and Hospital Performance in West of Indonesia

The resource-based theory describes, explains and predicts how firms can achieve sustainable competitive advantages through acquisition and control over resources. This study examines the role of Performance Measurement Systems (PMS) usage either diagnostically or interactively in further enhancing hospitals’ performance in managing their strategic resources. PMS act as tools for measuring firms’ performance through monitoring, controlling and legitimizing company resources, and is viewed as learning devices to enhance firms’ performance. Using diagnostic PMS, the managers can control and monitor the resources based on pre-set standard performance, while interactive PMS provides feedback through frequent communication and observes new strategies that enhance the strategic resources’ performance which leads to firms’ performance. Data were collected from 160 hospitals in Sumatra Island and Jakarta using structured questionnaire. The result of path analysis using AMOS 18 reveals that alternative model is a fit model than a based model. The findings show that strategic resources of Indonesian hospitals (human resource, structural resource, and physical resource) should be managed independently. PMS is used diagnostically or dynamically (combination of diagnostic and interactive ways) in managing each of the resources to enhance the quality of healthcare services and subsequently lead to financial performance of the hospital.

Intellectual capital and performance measurement systems in Iran

PurposeThe purpose of this paper is to empirically explore how the effect of intellectual capital (IC) on organizational performance is indirect and mediated through performance measurement (PM) systems.Design/methodology/approachData were collected from a survey of 128 chief financial officers of Iranian publicly listed companies. Hypotheses were tested using partial least squares regression, a structural modeling technique which is appropriate for highly complex predictive models.FindingsResults from the structural model indicate that, in general, companies with a higher level of IC place a premium on the balanced use of PM systems in a diagnostic and interactive style. Furthermore, the results provide some evidence that IC is indirectly associated with organizational performance through the intervening variable of the balanced use of interactive and diagnostic PM systems.Practical implicationsThis study sheds light on the issue of how senior management should use PM systems to take full advantage of intellectual assets which could lead to improved organizational performance.Originality/valueThis is the first study of its kind to synthesize a model which examines IC, PM systems, and organizational performance. Although the effect of different types of intangible assets on performance has been substantially examined in the literature, less effort has been devoted to understanding the role of PM systems in leveraging an organization’s IC.

Evidence for the Feedback Role of Performance Measurement Systems

Performance measurement systems (PMSs) are used to diagnose and remediate problems, termed the ‘decision-facilitating’ or feedback role of management control. We examine whether use of PMSs by individual decision makers is associated with better performance. Experimental studies have isolated individual-level effects of feedback on decision quality; however, it is difficult to extend these findings to natural settings. Archival and survey studies offer evidence on the association between the presence of PMSs and performance, but have had limited success in measuring decision makers’ actual use of PMSs and in addressing endogeneity of the decision to use PMSs. We use unobtrusively collected data on actual PMS use in 30 K-12 charter schools over three years to test whether teachers who make greater use of two PMSs are associated with greater growth in student learning. We find that teachers’ use of PMSs is associated with increased student learning, consistent with the premise that PMSs facilitate teacher interventions and improve student outcomes. The results are both statistically and materially significant and are better explained by PMS use than by selection effects of better teachers using PMSs. Consistent with the organization’s focus on “at risk” students, the strongest effects of teachers’ use of one PMS are concentrated among the lowest-performing students. In sum, we find broad support for the thesis that the feedback role of PMSs is associated with meaningful performance improvement.

Sistem Pengukuran Kinerja dan Kinerja Pembiayaan bagi Hasil Perbankan Syariah di Indonesia

This study aims to examine the role of Management Control System (MCS),attitude to risk and organizational learning to improve the performance ofprofit and loss of sharing defrayal. MCS concept used in this study is diagnostic, interactive and dynamic performance measurement system (PMS). Performance of defrayal of profit and revenue sharing is operationalized into the quantity and quality of defrayal. This study uses a survey by branches of Islamic banks in Indonesia. A total of 99 questionnaires were returned. It is proven that interactive use of PMS has a positive effect on the attitude towards risk and learning organization. This study shows that the resource-based view further elucidate the role of the PMS improves performance compared with agency theory. Practically, this study demonstrates the role of PMS as a system to control the behavior of managers in improving the performance of Islamic banks profit and loss of sharing defrayal

Performance measurement systems and the enactment of different institutional logics: Insights from a football organization

This paper examines the role of performance measurement systems (PMS) in managing the co-existence of different institutional logics in a football organization. We show that while the sports and business logics at times compete with each other, in other situations they are in harmony. We explain this with reference to an ambiguous cause-effect relationship between these logics which allows for different ways of enacting the logics. Our study thus demonstrates that compatibility of logics may vary not just between fields and organizations, as the literature has emphasized, but also between situations within an organization. Furthermore, our paper highlights how varying outcomes of the performance measures affect the way in which compromises between the two logics are made. While the literature has mostly focused on examining how compromises can be designed into the PMS, we draw attention to how situation-specific compromises are made on the basis of such PMS. The meaning attributed to different levels of sports performance was key for understanding the differences in compromising behaviour.

The expressive role of performance measurement systems: A field study of a mental health development project

The management control systems (MCS) literature has long recognized the importance of values and beliefs (e.g., Ouchi, 1979; Simons, 1995). However, in this literature, values and beliefs are typically presented in the context of mission statements or company slogans that can play little substantive role in shaping actions and behaviors. In this paper we focus on how MCS can play a more active role in values expression, and examine the potential for performance measurement systems (PMS) to be used within organizations to express the values and beliefs of organizational members. This use of PMS, which we term its expressive role, is important as pluralistic and expressive forms of organizing are becoming more prevalent. Furthermore, prior research indicates that enabling the expression of values and beliefs by organizational members can generate energy and commitment that are important to the achievement of organizational objectives. In a field study of a mental health development project in a non-government organization, we examine the design and operational characteristics that are important for the expressive role of PMS. We also examine the interplay between the expressive role and the instrumental role of PMS and identify circumstances in which these roles can clash and/or be complementary.

Association between performance measurement systems and organisational effectiveness

Purpose– The purpose of this paper is to investigate the role of performance measurement systems in organisational effectiveness in the context of the financial services sector within a developing country.Design/methodology/approach– Using the mail survey method data were collected from 69 financial institutions operating in Nepal. Multivariate analysis, in particular multiple regression analysis was employed to test the hypotheses.Findings– The results suggest that non-financial measures and feedback are tightly intertwined with organisational effectiveness. While institutions are focused on using the performance measures concerning internal business process perspective, less emphasis is placed on using customer and employee-related performance measures because they are considered less significant to organisational effectiveness. The findings also reveal that strategy-related feedback is considered more critical by management, as opposed to performance and staff. The study also provides evidence that 40.58 per cent of the financial institutions in Nepal had implemented the Balanced Scorecard, which is considered to be high when compared with other developing countries.Practical implications– The findings provide managers with valuable insights pertaining to the role of non-financial performance measures and the importance of feedback in improving organisational effectiveness, which could assist them in (re) aligning their performance measurement practices.Originality/value– The findings of this study contributes to the limited management accounting literature on performance measurement and the impact on organisational effectiveness by providing evidence from the financial services sector within the context of a developing country.