Understanding the Interrelationships Between Organizational Performance Measurement System Implementation Variables

Performance measurement (PM) systems are increasingly being adopted to manage and improve organizations' effectiveness. However, a review of the research shows that there are a significant number of unsuccessful PM systems with indications of challenges arising during the implementation phase. A study involving subject-area experts was conducted and the analytic network process (ANP), for evaluating the multi-criteria decision model, was used to quantify the effects of the dynamic interrelationships among the model variables as well as the systemic effect of the factors on PM system implementation success (IS). The results show that Leadership Support and the Implementation Approach are the most important factors for successful implementation of PM systems. Meanwhile, factors related to training, participation, and an effective information technology system help users of PM understand the measures and identify their perceived benefits, thereby contributing to performance goals and objectives. This study provides a comprehensive and rigorous analysis by employing an expert study to evaluate and quantify the effects of model variables and their interrelationships on PM system implementation success using the ANP methodology. Managers and researchers can use the prioritization of the factors and insights regarding key interrelationships to develop more specific strategies and better manage resources of the implementation effort.