Organizational performance measurement by a framework integrating BSC and AHP

Abstract

Purpose

Performance measurement, especially at the enterprise level, requires intense consideration of experts and managers in organizations from both theoretical and practical aspects. The purpose of this paper is to investigate the overall organizational performance by developing a performance evaluation model, based on integrating two methodologies of balanced scorecard (BSC) – a multiple perspective plan for performance assessment – and analytic hierarchy process (AHP) – a structured technique for organizing and analyzing complex decisions.

Design/methodology/approach

The method was conducted in Isfahan Telecommunications Company (ITC), in 2013. In total, 27 managers of ITC were invited to participate. First, according to overall firm goals, key performance indicators (KPIs) were established with respect to four perspectives of BSC framework. Then pairwise comparisons were done, through standard AHP questionnaires, to determine the preference weights of each indicator and perspective and give precedence to them.

Findings

Organizational performance can be measured by the proposed model in a telecommunications industry. According to the adopted method, company KPIs, relative importance of BSC perspectives and performance evaluation of functional areas were identified.

Practical implications

This study provides guidance regarding strategies for improving organizational performance beyond the financial perspective.

Originality/value

Previous studies illustrate various applications of joint BSC and AHP. However, this study applies the integrated framework throughout an organization in a new application field and shows not only company’s features but also telecommunications industry features.

Citation

Yaghoobi, T. and Haddadi, F. (2016), "Organizational performance measurement by a framework integrating BSC and AHP", International Journal of Productivity and Performance Management, Vol. 65 No. 7, pp. 959-976. https://doi.org/10.1108/IJPPM-01-2015-0001