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Factors influencing the effectiveness of performance measurement systems

Amy Tung (Department of Accounting and Corporate Governance, Macquarie University, Sydney, Australia)
Kevin Baird (Department of Accounting and Corporate Governance, Macquarie University, Sydney, Australia)
Herbert P. Schoch (Department of Accounting and Corporate Governance, Macquarie University, Sydney, Australia)

International Journal of Operations & Production Management

ISSN: 0144-3577

Article publication date: 15 November 2011

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.

Keywords

Citation

Tung, A., Baird, K. and Schoch, H.P. (2011), "Factors influencing the effectiveness of performance measurement systems", International Journal of Operations & Production Management, Vol. 31 No. 12, pp. 1287-1310. https://doi.org/10.1108/01443571111187457

Publisher

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Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited