Association between performance measurement systems and organisational effectiveness

Abstract

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 was 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.

Determinants of Sustainability and Organisational Effectiveness in Non-Profit Organisations

“…In fact, quite recently, Upadhaya, Munir and Bount [6] reiterated the dichotomy of views among scholars on the measurement and determination of organisational effectiveness. The first view posits that organisational effectiveness is determined in financial terms, while the second view advocates for both financial and non-financial measures.…”

“…Reference to the use of non-financial measures is also found in Kaplan and Norton's [12] balanced scorecard, in which three categories (customer, learning and growth, and internal business process) are identified. While Upadhaya et al [6] acknowledge these criteria they suggest that non-financial measures include customer satisfaction, employee motivation, quality, productivity, and market share. Tracing the emergence of organisational effectiveness as a field of practice, Lecy et al [1] point towards organisational sociology, industrial psychology, and other administrative sciences with a scholarly base in business schools and further splitting into three different schools with distinct approaches to effectiveness; namely goal attainment, resource-control (a system resource perspective), and social constructivism/reputational perspectives.…”

Assessing the effect of indoor environmental quality on productivity at office work

“…Subjective air quality perception was significantly related to indoor environmental conditions such as temperature and CO 2 levels, higher concentrations of particulates (PM 10 ) and exposure to high volatile organic compounds levels. Results show, that indoor air temperature and indoor air quality were rated similarly, as slight discomfort (25%) and discomfort (75%).…”

“…259/2008 [14]. The limit value for PM 10 indoor concentration (50 μg.m -3 ) was exceeded in two rooms. Courses of total particulate mass concentrations are illustrated in Figure 4.…”

“…Energy consumption of buildings depends significantly on the criteria used for the indoor environment (temperature, ventilation and lighting) and building design and operation [9]. Measurement of performance is the process of collecting, analyzing and/or reporting information regarding the performance of an individual, group, organization, system or component [10]. Productivity is one of the key factors that define a company's ability to thrive in competition [11].…”