What Matters with PMS? Critical Check Points in the Success of PMS

Kadak, Tarmo; Laitinen, Erkki K.

doi:10.1108/s1479-351220160000031004

Cited by 5 publications

(24 citation statements)

References 20 publications

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“…We assume that the hierarchy is linked to success KFs in the following way (Hypothesis 1): H1: The higher the level of formality of a PMS, the stronger the links to the success KFs. Kadak and Laitinen (2016) concluded that a PMS with stronger links to the chain of KFs has a stronger impact on performance. They measured the impact of PMS on performance by three different types of measures: achievement of organizational strategic objectives, financial performance, and non-financial performance.…”

Section: Hypotheses Of the Studymentioning

confidence: 99%

“…5th International Conference on Accounting, Auditing, and Taxation (ICAAT 2016) Table 1 shows the descriptive statistics of the fifteen questions (variables) referring to the fourteen KFs in the logical chain developed by Kadak and Laitinen (2016). For the ten binary (on/off) variables (without * in the table), the mean values directly refer to the percentage of PMSs having "on" response (1).…”

Section: Types Of Pmss In the Sample Organizationsmentioning

confidence: 99%

“…There have been several attempts to develop systematic methods to assess PMSs (Bititci et al, 1997;Najmi et al, 2005;Tangen, 2004;Wettstein and Kueng, 2002;Olsen et al, 2007). Kadak and Laitinen (2016) created a model based on the fourteen KFs constituting the logical chain of PMS. In this paper we will use this assessment model since it provides us with fourteen KFs in a logical and comprehensive framework (Kadak and Laitinen, 2016).…”

Section: Introductionmentioning

confidence: 99%

“…Kadak and Laitinen (2016) created a model based on the fourteen KFs constituting the logical chain of PMS. In this paper we will use this assessment model since it provides us with fourteen KFs in a logical and comprehensive framework (Kadak and Laitinen, 2016). Thus, we will assess the links between the formality of PMS and the fourteen success KFs.…”

Section: Introductionmentioning

confidence: 99%

“…Finally, the conclusions are presented in the last section. Kadak and Laitinen (2016) presented a framework to assess the success of a PMS based on a set of fourteen KFs. The idea of this framework was to develop a logical chain of check points where each KF was represented by a check point measured on a scale from 0 to 1.…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

Are More Formal Performance Management Systems More Successful?

Kadak¹,

Laitinen²

2016

Proceedings of the 5th International Conference on Accounting, Auditing, and Taxation (ICAAT 2016)

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This paper focuses on the levels of formality of performance management systems (PMSs). The objective of the paper is to investigate the impact of the formality of PMS 1) on the key success factors (KFs) of PMS and 2) on the achievement of performance. The formality of PMS is investigated on three different levels: structured and formal PMS, formal PMS, and informal PMS. We define a PMS structured & formal when it is designed and built upon a well-known existing system structure, such as the BSC. It is regarded as formal when it is formal and designed by the own staff of the firm. PMS is considered informal when the firm does not use any formal system. The paper makes use of the chain framework developed by Kadak and Laitinen (2016) to assess the links between the formality and KFs. The links between the formality and performance are assessed by three different impact measures on performance. The results implicate that the usage of a structured & formal PMS has stronger links to KFs of PMS than the usage of the formal in-house designed PMS. Moreover, the usage of a formal PMS leads to stronger links with KFs than using an informal PMS. Formal PMSs make a stronger impact on financial performance than an informal PMS. The same finding can also be observed for achievement of strategic objectives and non-financial performance but the results are not statistically significant due to the small number of informal PMS (5) in the sample. Thus our empirical findings encourage organizations to implement PMSs based on the existing system structures rather than own in-house design and to move from the usage of informal PMSs to formal systems.

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Section: Hypotheses Of the Studymentioning

confidence: 99%

Section: Types Of Pmss In the Sample Organizationsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Are More Formal Performance Management Systems More Successful?

Kadak¹,

Laitinen²

2016

Proceedings of the 5th International Conference on Accounting, Auditing, and Taxation (ICAAT 2016)

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Explaining success of performance management systems

Laitinen

Kadak

2019

IJPPM

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Purpose The purpose of this paper is to use the logical chain of key factors (KFs) to explain the success of performance management systems (PMS) and corporate performance. Design/methodology/approach The authors use the strength of the KFs chain to capture PMS success. First, the authors assume that perceived environmental uncertainty (PEU) is positively associated with the strength (H1). The higher the PEU, the stronger is the chain as a response to uncertainty. Second, the authors assume that the strength improves performance (H2) but third, that the impact of the strength is negatively moderated by competition (H3). Fourth, the authors assume that this improvement leads to superior corporate performance (H4). The research model is tested by applying the partial least squares method for a sample of 61 Estonian and Finnish firms. Findings Empirical evidence shows that PEU is negatively correlated to the strength of the chain but when controlled for a set of control variables, the path coefficient is positive. The strength of the chain is positively associated with improvement in performance. The impact of the strength of the chain on financial performance is negatively moderated by competition. The improvement in performance is positively associated with the attainment level of strategic goals. The improvement in non-financial performance does not significantly affect corporate profitability. Practical implications The levels of PEU and competition should be taken into the account when designing, adjusting and assessing the PMS of organization. Originality/value The authors give explanation why evidence about the effects of PMS on the performance of the firm is mixed.

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Intellectual capital and performance measurement systems in Iran

Asiaei

Jusoh

Bontis

2018

JIC

104

140

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Purpose The purpose of this paper is to empirically explore how the effect of intellectual capital (IC) on organizational performance is indirect and mediated through performance measurement (PM) systems. Design/methodology/approach Data were collected from a survey of 128 chief financial officers of Iranian publicly listed companies. Hypotheses were tested using partial least squares regression, a structural modeling technique which is appropriate for highly complex predictive models. Findings Results from the structural model indicate that, in general, companies with a higher level of IC place a premium on the balanced use of PM systems in a diagnostic and interactive style. Furthermore, the results provide some evidence that IC is indirectly associated with organizational performance through the intervening variable of the balanced use of interactive and diagnostic PM systems. Practical implications This study sheds light on the issue of how senior management should use PM systems to take full advantage of intellectual assets which could lead to improved organizational performance. Originality/value This is the first study of its kind to synthesize a model which examines IC, PM systems, and organizational performance. Although the effect of different types of intangible assets on performance has been substantially examined in the literature, less effort has been devoted to understanding the role of PM systems in leveraging an organization’s IC.

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What Matters with PMS? Critical Check Points in the Success of PMS

Cited by 5 publications

References 20 publications

Are More Formal Performance Management Systems More Successful?

Are More Formal Performance Management Systems More Successful?

Explaining success of performance management systems

Intellectual capital and performance measurement systems in Iran

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