Factors influencing the effectiveness of performance measurement systems

Purpose - The purpose of this paper is to examine the association between the use of multidimensional performance measures and four organizational factors with the effectiveness of performance measurement systems (PMSs).Design methodology approach - Data were collected by mail survey questionnaire f...

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Bibliographic Details
Published in:International journal of operations & production management 2011-01, Vol.31 (12), p.1287-1310
Main Authors: Tung, Amy, Baird, Kevin, Schoch, Herbert P.
Format: Article
Language:English
Subjects:
Business
Design engineering
Empirical analysis
Employees
Learning
Literature reviews
Market positioning
Mathematical models
Objectives
Performance evaluation
Performance management
Performance measurement
Strategic planning
Studies
Sustainability
Two dimensional
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Summary:Purpose - The purpose of this paper is to examine the association between the use of multidimensional performance measures and four organizational factors with the effectiveness of performance measurement systems (PMSs).Design methodology approach - Data were collected by mail survey questionnaire from a random sample of 455 senior financial officers in Australian manufacturing organizations.Findings - The results reveal that the use of multidimensional performance measures is associated with two dimensions of the effectiveness of PMSs (performance and staff related outcomes). The results also reveal that organizational factors were associated with the effectiveness of PMSs. Specifically, top management support was found to be associated with the effectiveness of PMSs in respect to the performance related outcomes, and training was associated with the staff related outcomes.Practical implications - The findings provide managers with an insight into the desirable PMS characteristics and the specific organizational factors that they can focus on in order to enhance the effectiveness of their performance measurement system.Originality value - This study contributes to the limited empirical research examining the effectiveness of PMSs regarding the extent to which organizational processes are achieved. In addition, the study provides an empirical analysis of the association between the five perspective (financial, customer, internal business process, learning and growth, and sustainability) BSC model and four organizational factors with the effectiveness of PMSs.
ISSN:0144-3577
1758-6593
DOI:10.1108/01443571111187457