Comprehensive performance measurement systems design and organizational effectiveness

Abstract

Purpose -The paper aims to provide empirical evidence regarding the relationship between the level of comprehensiveness of a Performance Measurement System (PMS) and its respective organizational effectiveness. The extant literature has highlighted that a PMS may successfully contribute to the implementation of the organizational strategy, with the Balanced Scorecard (BSC) serving as an exemplar of a strategy performance management tool and playing a primary role to this end. However, the reasons for the overall high rate of failure in the implementation of the BSC remain unexplained and, to date, little empirical research exists regarding the design of PMSs such as the BSC and its constituent elements.Design/methodology/approach -Using a survey of 103 Italian managers, the paper advances a model describing a comprehensive BSC design, after identifying the key attributes from the performance management literature. Data were analyzed using cluster analysis and multiple regression analysis.Findings -Results suggest that organizations are implementing the BSC following two different approaches, which vary from a less comprehensive to a more comprehensive design.More importantly, the BSC design explains variation across three organizational effectiveness measures: (1) improvements in translating the organizational strategy into operational goals, (2) understanding cause-effect relationships, and (3) enhancing internal communication among employees. Originality/value -The paper builds on and extends the previous literature on performance management in two ways. First, via a literature review, it introduces a model describing a comprehensive BSC design which includes 12 attributes. Second, it demonstrates that organizational effectiveness varies positively with the level of comprehensiveness of the BSC design.

Financial and Non-Financial Measures in Evaluating Performance: The Role of Strategic Intelligence in the Context of Commercial Banks in Kenya

“…From table 1 therefore, results indicate that, on average non-financial measures contributed to the performance of Kenya commercial banks to a moderate extent with mean score of 3.51 and standard deviation of 1.47. These results were in line with the findings of Lucianetti, Battista & Koufteros (2019). In essence, Non-financial measures help to improve and translate the organisational strategy as such enhancing internal communication among employees.…”

Does engaging in corporate social responsibility activities influence firm performance? The moderating effects of risk preferences and performance measurement systems

“…We rely on Hall's (2008) definition of PMS as a tool used by firms to "translate business strategies into deliverable results" (p. 43). Contemporary PMS, such as the balanced scorecard, play a vital role in facilitating business strategy by providing a "blueprint" for strategy implementation (Asiaei and Bontis, 2019;Chenhall and Langfield-Smith, 1998;Franco-Santos et al, 2012;Guth and Macmillan, 1986;Kaplan and Norton, 1996;Lucianetti et al, 2019;Nguyen et al, 2017). For instance, PMS can be used to communicate and review strategic goals and initiatives within an organization (Henri, 2006a, b).…”

Análise da aplicação da ferramenta BSC na gestão pública em municípios de Mato Grosso sob a perspectiva dos gestores de planejamento

“…É um sistema que controla desde a identificação das necessidades até a motivação das melhorias dos processos e produtos, gerando um ambiente apropriado para o alinhamento estratégico organizacional (FELIX;FELIX;TIMÓTEO, 2011). O BSC ainda possibilita uma tomada de decisões com base no alinhamento das medidas de desempenho com as metas e estratégias da organização, portanto quanto maior o grau de alinhamento, maior a sintonia entre os objetivos estratégicos (LUCIANETTI; BATTISTA; KOUFTEROS, 2019).…”