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An examination of the commonalities and differences between performance management practices in the public and private sector.

A literature review of 100 publications in international academic journals over the last 20 years.

The chapter develops a framework which links the dimensions of the public/private-distinction (ownership, funding, control and type of goals) to the design and use of performance management systems (PMS). This framework subsequently informs a literature review, which can be summarised as follows: Multi-dimensionality of the PMS is core in both public and private sector organisations, but quite many private sector papers point to a financial focus at the top of the PMS, while public sector organisations show a broad variety of performance indicators, including those on societally relevant goals. In addition, a link between the PMS and strategies can be found in the public and the private sector, but the match between different strategies and PMS design is more elaborated in the private sector. These findings are largely in accordance with our expectations. The review also finds support for the assumption that performance information in public sector organisations is primarily used for external accountability reasons, while internal managerial control is the main purpose in private firms. The use of performance information is quite intensive and mostly functional in both sectors, which does not meet our expectations. Overall, the differences between performance management practices in the public and private sector are less stringent than expected.

Due to limited evidence about the importance of performance-related pay systems and no evidence about targeting in both sectors, a more focused literature review on these issues would be desirable.

Mutual learning between both sectors, for example the public sector can learn from the private sector on how to link strategy to the PMS and the private sector can learn from the public sector about serving a multitude of stakeholders in the PMS.

A comprehensive review of performance management practices in the public and private sector.

The assessment of the success of Performance Management Systems (PMS) is difficult because there are many success factors, they are mutually dependent on each other, and located at different hierarchical levels of an organization. Therefore, there is a need to describe the complete logical chain, which makes PMS successful for an organization and to find out a comprehensive list of key factors (KF) affecting the success of PMS. The objective of this research paper is to develop a method to assess success of a PMS based on a logical chain of 14 KF.

The research first develops a logical chain based on the 14 KFs on the basis of prior studies and then carries out a survey about these KFs (15 check points) of PMS and their connection to organizational performance for a small sample of firms from two EU countries.

There are next findings of this study which indicate following: KFs of PMS affect organizational performance; successful PMS improves organizational performance; PMS is successful for the organization when the completeness of the logical chain in PMS is high.

The practical contribution of this study is that findings show that firms can assess their own PMSs and compare their check point values against the values of successful PMS group. This kind of analysis indicates directly improvement potential for the different check points in PMS.

The purpose of this paper is to explain the institutionalization process of the performance management system (PMS) in a Malaysian government‐linked company (GLC). The study specifically looks at the changes brought by the GLC transformation programme introduced by the government.

An explanatory case study method is used whereby data are collected through semi structured interviews, document reviews, informal conversations and observations.

Despite attempts to link the organisational activities to the system through the business operating plan, the data reveal that the PMS‐related activities have somehow been viewed as a routine mechanism for appraising the employees' performances and become decoupled from the organisational activities. Thus, the new PMS did not really change the way organisational members view and do things in the organisation.

This study shows that the intention to institutionalise a new practice may not be materialised if there are not enough forces to support the change. The adoption of the new PMS practices may be due to isomorphic pressures to mimic other organisations in the same environmental field leading to ceremonial adoption of the practice.

This research provides evidence to the government that the process involved in transforming the organisational culture of a government‐linked organisation by using accounting tools might be time consuming, costly and subject to resistance. Hence, any change management programme introduced in a government‐linked organisation should have strong top management support, good financial standing as well as a reliable technical backup to the programme.

Performance management systems (PMS) are integral to an organization's human resource management but research is ambivalent on their positive impact and the mechanism through which they influence employee behavior. This study fills this gap by positing work engagement as a mediator in the relationship between perceptions of PMS effectiveness, employee job satisfaction and turnover intentions.

The study uses a survey-based design. Data were collected from 322 employees in India attending a management development program at a premier business school. Partial least squares–based structure equation modeling package ADANCO was used for data analysis.

Positive perception of PMS effectiveness was found to enhance employee work engagement. This increased job satisfaction and reduced turnover intentions among employees. Thus, work engagement mediated the relationship between PMS perceptions and job satisfaction and turnover intentions.

The results suggest that organizations need to focus on three characteristics of PMS, namely its distinctiveness, consistency and consensus. These characteristics determine the effectiveness of PMS in engaging employees and influencing their job satisfaction and turnover intentions.

Prior studies on performance management have largely been limited to aspects of justice and focused disproportionately on the appraisal aspect of performance management. This study takes a systems view of performance management and addresses prior shortcomings by examining the role of clarity and horizontal fit between PMS practices in determining employee engagement. The study also provides much needed empirical support to theoretical studies which have argued that PMS is a driver of engagement in organizations (Gruman and Saks, 2011; Mone and London, 2014).

This paper seeks to extend the understanding of how formal management control systems (MCSs) contribute to the construction of performance management systems (PMSs) in the French higher education (HE) sector.

Empirical data are gathered both at the global level and at the local (university) level through an in‐depth case study. This allows a dynamic multi‐level analysis based on a neo‐institutional framework.

This article shows how formal MCSs contribute to the institutionalisation of a wider PMS at the global level of the HE sector. The social context then has a determining influence on universities, through the diffusion of values and norms drained by formal MCSs, calling into question the effectiveness of the autonomy supposed to be given to universities under the new PMS. Moreover, within universities, the complex interactions between MCS and PMS resulting from learning, political interactions and conflicts of values, lead to still uncertain outcomes.

The paper focuses on one main case‐study, which is still undergoing change. Analysis could be reinforced by further longitudinal and comparative research.

Steering organisations within a framework where the State defines strategic priorities requires both appropriate performance indicators and a dialogue allowing objectives to be shared at both the social and local levels.

Institutionalisation of MCSs and accountability are discussed in the specific French context of cultural centralisation.

This paper aims to focus on the use of qualitative research methods to gain a better understanding of the performance management system (PMS) of one of the largest retailers in North America. The motivation for the research was to assess whether the PMS at one of the world’s largest retail companies was congruent with the most recent thinking and research in the management accounting literature.

Using open-ended interviews, the paper seeks to develop relevant hypotheses emerging from the dimensions of the Strauss and Corbin’s qualitative research methodology (1998). A qualitative methodology was used because it provides a structured approach and analytical techniques that can build upon existing theory and literature.

The qualitative evidence collected during the course of the research indicates that financial measures were predominantly used by the company in its PMS, and that this reliance on financial measures may be an artifact of the industry in which the company operates. The retail industry is highly competitive, and it is very sensitive to changes in customer tastes and behavior, as well as shareholder and financial market pressures. In addition to financial measures, it was found that operational management developed certain non-financial performance measures and that this development may have been a response by operational managers to wider stakeholder pressures and external influences. However, these performance measures appear to be not fully integrated in the PMS and are therefore de-coupled and relatively unimportant in, or entirely absent from, top-level decision-making.

The conclusions of the paper provide support for the concepts of isomorphism and de-coupling as found in the literature of new institutional theory.

The case study approach has enabled to explore and gain further understanding of management accounting practices, particularly performance measurement and management, in their natural setting. Strauss and Corbin’s (1998) grounded theory methodology was adopted because it provides a structured set of analytical steps and systematic analytical techniques for handling and interpreting data and theory building.

The purpose of this paper is to explore factors that can influence on the police officer’s perception of the effectiveness of the performance management system (PMS). This study examines the effect of the attitude of employees and causal relationships between organizational/individual factors and the effectiveness of PMS during the implementation process.

The authors conducted a nationwide online survey of 10,619 police officers in South Korea. Structural equation modeling was employed to analyze multiple relationships simultaneously. The authors constructed a baseline model and also examined an alternative model in order to increase the model’s explanatory power.

Police officers’ perception of the understanding of the PMS, manager’s concern, participation and performance information (PI) usage exerted significant effects on the perceived effectiveness of the PMS. However, the relation between understanding of the PMS and PI usage was not significant. The study identified organizational and institutional settings for the success of the PMS. Overall, results support findings of previous studies that suggest an important role of common consensus on performance indicators and agreement between managers and employees.

While the data size of this study is quite large, it should be considered that the respondent’s preferences on the PMS might have influenced survey results. Findings are limited by the use of a cross-sectional design. Future studies may investigate changes in causal relationships over time by employing a panel design. In addition, various survey items related to the practices of the PMS within the police organization need to be included in future studies.

To improve the effectiveness of performance management in the police organization, decision makers and managers must emphasize behavioral aspects of the system, especially the causal relationship between practices and perception of the usefulness of the system.

Despite the wide use of PMS in police management practice, police officers’ perception of the effectiveness of these systems has received little attention in the field. This study indicated a causal link between the factors in the PMS and the perception of the police officers.

The purpose of this paper is to investigate whether performance management system (PMS) has a positive effect on organizational performance. Furthermore, it also investigates whether intellectual capital (IC) mediates PMS-organizational performance relationship.

This study is designed as a quantitative research employing a partial least squares structural equation modeling (PLS-SEM). Using an online survey, data are collected from the HEIs managers under the Ministry of Research, Technology and Higher Education, the Government of Indonesia (MRTH-GOI). This research uses a mediation model approach to test the indirect effect of IC.

The results reveal that PMS has a positive direct effect on organizational performance of the HEIs in Indonesia. Further analysis proves that IC partially mediates PMS-organizational relationship.

This research is context-specific for Indonesia and caution should be used when generalizing it to other countries. It implies that the better the organizational performance of the HEIs, the better the quality of life in the society. PMS and IC play a crucial role in the era of knowledge economy.

The HEIs managers should design and implement a reliable PMS. They also should properly manage the IC (human capital, structural capital, relational capital) so that they can enhance organizational performance in areas of teaching, research and community service as the core business of the HEIs.

As the global education competition has become a serious issue in each HEI in Indonesia, the results of this study contribute to providing an approach on how to achieve a better organizational performance which brings more benefits to the society. The HEIs display a strategic role in improving the quality of life of society. The knowledge economy requires society to enhance the quality of education at all levels. This research model and results provide empirical evidence of the importance of IC which mediates the relationship between PMS and organizational performance. When the HEIs in Indonesia implement this model of managing IC, the society will get more benefits in terms of the improvements in the quality of education, teaching, research and community service from the HEIs. The better the HEIs performance, the better the quality of life of the society in the era of knowledge economy.

This research brings together issues that are usually examined separately in previous studies. It employs a mediation research model to explore the central role of IC in PMS- organizational performance relationship which is rarely researched. This is also the first study exploring the three constructs of PMS, IC and organizational performance in the Indonesian HEIs research setting.

The purpose of this paper is to identify the main problems that can be encountered during the implementation and use of a performance management system (PMS).

Problems encountered during the implementation and use of a PMS were collected from the literature and put into a survey which was sent to 31 experts in performance management (PM). These experts gave their opinion on the frequency, impact and solvability of the listed problems as they encountered these in practice.

The study shows that the failure rate of PM implementations has decreased in the past decade from 70 to 56 percent, and that the most severe problems organizations encounter are: lack of top management commitment; not having a PM culture; PM getting a low priority or its use being abandoned after a change of management; management putting low priority on the implementation; and people not seeing (enough) benefit from PM.

The main limitation is that the number of experts could be higher in order to get an even broader view on the main problems.

The practical implication of the study is that management can now better prepare itself for the issues to be expected while introducing PMSs in the organization.

The need for an efficient and effective PMSs has increased over the last decade and the successful implementation and use of these systems has become of paramount importance to organizations. Unfortunately, until now only scattered information was available in the literature about the problems that can be expected during the implementation and use processes. Even the failure rate, which is often mentioned in the literature has never been substantiated. This paper gives, for the first time, a systematic overview of the main problems to be expected, and a more accurate failure rate of PMSs.

This study aims to investigate whether strategy pillars have a positive direct effect on organizational productivity performance (OPP) in the Indonesian HEI (Higher Education Institutions) research setting and, if so, whether the effect is mediated by a performance management system (PMS).

This study used quantitative research employing partial least square structural equation modeling (PLS-SEM) to test the hypotheses. A mediation model of the research framework was developed to investigate the mediating role of PMS.

Using a sample of 182 Indonesian HEI managers, the results indicate that strategy pillars have a positive effect on OPP. Further analysis shows that PMS partially mediates the strategy pillar–OPP relationship.

This study has limitations. Firstly, the sample size used was relatively small and this may raise the issue of generalization. Secondly, it used a Likert scale and therefore may raise the issue of judgment bias. Lastly, this study is context-specific for Indonesia and caution should be used when generalizing it to other countries.

To enhance the HEIs productivity performance, the HEI managers should develop strong strategy pillars for the purpose of effective strategy formulation and execution.

This study provides a model showing how to improve the HEIs productivity performance by employing strategy pillars and a PMS. The better the performance of the HEIs, the better the quality of life of society in the era of the knowledge economy.

Strategy pillars have rarely been researched. This study is therefore one of the few studies on strategy pillars. This study also provides new elements related to measuring strategy pillars, PMS and OPP in the context of HEIs in Indonesia as an emerging economy.