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Performance Measurement Systems in Continuous Improvement Environments: Obstacles to Their Effectiveness

Author

Listed:
  • Flávio Cunha

    (Department of Production and Systems, Algoritmi Centre, University of Minho, 4800-058 Guimarães, Portugal)

  • José Dinis-Carvalho

    (Department of Production and Systems, Algoritmi Centre, University of Minho, 4800-058 Guimarães, Portugal)

  • Rui M. Sousa

    (Department of Production and Systems, Algoritmi Centre, University of Minho, 4800-058 Guimarães, Portugal)

Abstract

The implementation of an effective performance measurement system (PMS) is essential in organizations seeking continuous improvement and sustainability, especially in the context of Industry 4.0. However, a number of barriers/obstacles hampers this effectiveness. For example, the inclusion of performance indicators without practical use, or presenting absurd results, are frequent in the industry, leading people to distrust and devalue such systems. The main research question in this study is: What are the main obstacles to effective performance measurement systems in organizations? These obstacles will be identified and categorized, and some conditions required to eliminate/mitigate them will be explored. A systematic literature review is carried out, according to the PRISMA methodology, to identify the most frequent factors referred to as obstacles to PMS effectiveness, due to their negative influence on the implementation, use or maintenance of these systems. This review resulted in the identification of 175 obstacles that were then classified into 19 types of obstacles divided into 6 categories, whose definition was inspired by the 6M approach usually associated with Ishikawa diagrams. Then, the relationships between the obstacles are explored and investigated in order to identify interdependencies that may further influence the effectiveness of the PMS. Solutions and methodologies that can help mitigate/eliminate their impact on PMS effectiveness are also identified.

Suggested Citation

  • Flávio Cunha & José Dinis-Carvalho & Rui M. Sousa, 2023. "Performance Measurement Systems in Continuous Improvement Environments: Obstacles to Their Effectiveness," Sustainability, MDPI, vol. 15(1), pages 1-12, January.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:1:p:867-:d:1023928
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    References listed on IDEAS

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    1. André A. de Waal & Harold Counet, 2009. "Lessons learned from performance management systems implementations," International Journal of Productivity and Performance Management, Emerald Group Publishing Limited, vol. 58(4), pages 367-390, April.
    2. David Moher & Alessandro Liberati & Jennifer Tetzlaff & Douglas G Altman & The PRISMA Group, 2009. "Preferred Reporting Items for Systematic Reviews and Meta-Analyses: The PRISMA Statement," PLOS Medicine, Public Library of Science, vol. 6(7), pages 1-6, July.
    3. Wouters, Marc & Wilderom, Celeste, 2008. "Developing performance-measurement systems as enabling formalization: A longitudinal field study of a logistics department," Accounting, Organizations and Society, Elsevier, vol. 33(4-5), pages 488-516.
    4. Judit Nagy & Judit Oláh & Edina Erdei & Domicián Máté & József Popp, 2018. "The Role and Impact of Industry 4.0 and the Internet of Things on the Business Strategy of the Value Chain—The Case of Hungary," Sustainability, MDPI, vol. 10(10), pages 1-25, September.
    5. Elena Giovannoni & Maria Pia Maraghini, 2013. "The challenges of integrated performance measurement systems," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 26(6), pages 978-1008, August.
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