Purpose: The performance management system (PMS) is a metasystem over all business processes at the strategic and operational level. Effectiveness of the various management systems depends on many factors. One of them is the consistent definition of each system elements. The main purpose of this study is to explore if the performance management systems of the sample companies is consistent and how companies can create such a system. The consistency in this case is based on the homogenous definition of attributes relating to the performance indicator as a basic element of PMS.
Methodology: At the beginning, we used an affinity diagram that helped us to clarify and to group various attributes of performance indicators. The main research results we achieved are through empirical study. The empirical study was carried out in a sample of Slovak companies. The criterion for selection was the existence of the certified management systems according to the ISO 9001. Representativeness of the sample companies was confirmed by application of Pearson´s chi-squared test (χ2 - test) due to above standards.
Findings: Coming from the review of various literature, we defined four groups of attributes relating to the performance indicator: formal attributes, attributes of target value, informational attributes and attributes of evaluation. The whole set contains 21 attributes. The consistency of PMS is based not on maximum or minimum number of attributes, but on the same type of attributes for each performance indicator used in PMS at both the operational and strategic level. The main findings are: companies use various financial and non-financial indicators at strategic or operational level; companies determine various attributes of performance indicator, but most of the performance indicators are otherwise determined; we identified the common attributes for the whole sample of companies.
Practical implications: The research results have got an implication for business practice. If companies applied the homogenous set of attributes of performance indicator it would increase the effectiveness of the PMS. Effectiveness can be increased by faster response to non-conformity or performance gap. Our proposal targets the perception of the PMS as a management metasystem independently of the industry, size of enterprises or products. We also suggest a minimum set of attributes of performance indicator toward a consistent PMS.
Alfaro-Saiz, J.J., Carot-Sierra, J. M., Rodríguez-Rodríguez, R. and Jabaloyes-Vivas, J M., 2011. Seeking organisational excellence by using the information coming from the EFQM excellence model as starting point: application to a real case. Total Quality Management & Business Excellence, 22(8), pp. 853-868.
Berry, A. J., Coad, A. F., Harris, E. P., Otley, D.T. and Stringer, C., 2009. Emerging themes in management control: a review of recent literature. The British Accounting Review, 41(1), pp. 2–20.
Bisbe, J. and Otley, D., 2004. The effects of the interactive use of management control systems on product innovation. Accounting, Organizations and Society, 29(8), pp. 709-737.
Bonner, S. E., Hastie, R., Sprinkle, G. B. and Young, S. M., 2000. A review of the effects of financial incentives on performance in laboratory tasks: implications for management accounting. Journal of Management Accounting Research, 12, pp. 19-64.
Chenhall, R.H., 2003. Management control systems design within its organizational context: findings from contingency-based research and directions for the future. Accounting, Organizations and Society, 28(2-3), pp. 127–168.
Chenhall, R.H., 2005. Integrative strategic performance measurement systems, strategic alignment of manufacturing, learning and strategic outcomes: an exploratory study. Accounting, Organizations and Society, 30(5), pp. 395-422.
Chenhall, R.H. and Euske, K.J., 2007. The role of management control systems in planned organizational change: an analysis of two organizations. Accounting, Organizations and Society, 32(7-8), pp. 601–637.
Doeleman, H.J., Have, S. and Ahaus, K., 2012. The moderating role of leadership in the relationship between management control and business excellence. Total Quality Management & Business Excellence, 23(5-6), pp. 591-611.
Evans, J.R., Ford, M. W., Masterson, S. S. and Hertz, H. S., 2012. Beyond performance excellence: research insights from Baldrige recipient feedback. Total Quality Management & Business Excellence, 23(5-6), pp. 489-506.
Flapper, P. S., Fortuin, L. and Stoop, P., 1996. Towards consistent performance management systems. International Journal of Operations & Production Management, 16(7), pp. 27-37.
Ferreira, A. and Otley, D., 2009. The design and use of performance management systems: An extended framework for analysis. Management Accounting Research, 20 (4), pp. 263–282.
Gavurová, B., Šoltés, M. and Balloni, A. J., 2014. Ekonomický význam využívania informa?no-komunika?ných technológií v systéme zdravotníctva. Ekonomicky casopis, 62(1), pp. 83-104.
Heras-Saizarbitoria, I., Marimón, F. and Casadesús, M., 2012. An empirical study of the relationships within the categories of the EFQM model. Total Quality Management & Business Excellence, 23(5-6), pp. 523-540.
Ostertagová, E., 2012. Aplikácia štatistických testov dobrej zhody. Transfer inovácií, 14(23), pp. 72 – 74.
Otley, D., 1994. Management control in contemporary organizations: towards a wider framework. Management Accounting Research, 5(3-4), pp.289–299.
Otley, D., 2008. Did Kaplan and Johnson get it right? Accounting, Auditing & Accountability Journal, 21(2), pp. 229–239.
Kaplan, R.S. and Norton, D.P., 1996. The Balanced Scorecard: Translating Strategy into Action. Boston: Harvard Business School Press.
Kaplan, R.S. and Norton, D.P., 2000. Strategy-focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment. Boston: Harvard Business School Press.
Kaplan, R.S. and Norton, D.P., 2004. How strategy maps frame an organization’s objectives. Financial Executive, 20(2), pp. 40–45.
Wang, W. T., 2012. Evaluating organisational performance during crises: A multi-dimensional framework. Total Quality Management & Business Excellence, 23(5-6), pp. 673-688.
Závadský, J. and Závadská, Z., 2014. Utilisation of business process models in managerial practice: An empirical study in Slovak companies certified to the ISO 9001 standard. Total Quality Management & Business Excellence, 24(3-4), pp. 319-337.