Factors influencing the effectiveness of performance measurement systems

Amy Tung*, Kevin Baird, Herbert P. Schoch

*Corresponding author for this work

Research output: Contribution to journalArticle

72 Citations (Scopus)

Abstract

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.

Original languageEnglish
Pages (from-to)1287-1310
Number of pages24
JournalInternational Journal of Operations and Production Management
Volume31
Issue number12
DOIs
Publication statusPublished - Nov 2011

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