The effectiveness of strategic performance measurement systems

Kevin Baird*

*Corresponding author for this work

Research output: Contribution to journalArticle

10 Citations (Scopus)

Abstract

Purpose: The purpose of this paper is to examine how the characteristics of strategic performance measurement systems (SPMSs) influence the effectiveness of such systems. Specifically, the study examines the association between the following three strategic performance measurement approaches with the effectiveness of SPMSs: the use of multidimensional performance measures, the use of performance measures that are linked to value drivers, and the use of performance measures that are linked to strategy. Design/methodology/approach: Data were collected using a mail questionnaire distributed to a random sample of 800 Australian manufacturing and service business units. Findings: The use of multidimensional performance measures is found to positively influence the effectiveness of SPMSs. Practical implications: Organisations need to strive to design their SPMSs in a manner which considers the achievement of both performance- and staff-related goals, with the findings suggesting that managers need to focus on a broad set of performance measures relating to the four dimensions of the BSC (financial, internal, customer, and learning and growth measures). Originality/value: This study contributes to the literature by examining the important role that SPMSs play in the achievement of organisational process outcomes. The incorporation of a measure of organisational process effectiveness, and the subsequent identification of the performance-related outcome and staff-related outcome dimensions, provides future researchers with an alternative approach to analyse SPMS effectiveness and provides managers with an insight into how to adjust their SPMS to improve their organisational processes.

Original languageEnglish
Pages (from-to)3-21
Number of pages19
JournalInternational Journal of Productivity and Performance Management
Volume66
Issue number1
DOIs
Publication statusPublished - 2017

Keywords

  • Effectiveness
  • Multidimensional performance measures
  • Strategic performance measurement system
  • Strategy
  • Value driver

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