What Matters with PMS? Critical Check Points in the Success of PMS

Abstract

Purpose

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.

Methodology/approach

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.

Findings

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.

Practical implications

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.

Citation

Kadak, T. and Laitinen, E.K. (2016), "What Matters with PMS? Critical Check Points in the Success of PMS", Performance Measurement and Management Control: Contemporary Issues (Studies in Managerial and Financial Accounting, Vol. 31), Emerald Group Publishing Limited, Leeds, pp. 111-140. https://doi.org/10.1108/S1479-351220160000031004