Development, application, and evaluation of an organizational performance measurement system

Abstract

Organizational performance measurement is an issue in any large-scale organizational change effort. In general, an organizational performance management system is the set of people, methods and tools for generating, analyzing, portraying, discriminating and evaluating data and information about multiple dimensions of performance at the individual, group and organization level for multiple constituencies. Measurement subsystems within the umbrella organizational performance measurement system include, for example, process and work measurement, individual performance appraisals, measurement of team effectiveness, measurement of organizational outcomes, measurement of customer satisfaction, measurement of quality of work life, financial and accounting systems.

This dissertation addresses the problem of a gap in the body of knowledge about development, application, and evaluation of organizational performance measurement systems. The body of knowledge, as used here, includes practitioner experience, researcher experience, popular literature, and the scholarly literature. Research questions that define the gap include:

(1) Guided by theory, how can practitioners develop valid organizational performance measurement systems that reflect normative attributes in the body of knowledge?

(2) How can practitioners establish organizational performance measurement systems in a way that encourages disciplined, multi-level, plan-do-study-act improvement processes?

(3) What impact does an intervention to improve organizational performance measurement systems have on people in the organization?

The gap in the body of knowledge framed by the research questions is general; many organizations face the problem of creating more valid and useful measurement systems. To address the general problem, this research developed, applied, and evaluated a prototype organizational performance measurement system—the treatment. The treatment was called a Visual Management System or VMS.

The research identified normative measurement system attributes from the body of knowledge; created Visual Management System treatment components and methods based on the normative attributes; applied the VMS treatment to multiple sites within one organization; modeled individual to group to organization performance linkages; evaluated the impact of the treatment; and identified critical success factors to control for in building an organizational performance measurement system.