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

Flávio Cunha (), José Dinis-Carvalho and Rui M. Sousa
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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

Sustainability, 2023, vol. 15, issue 1, 1-12

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.

Keywords: performance measurement system; key performance indicators; continuous improvement; operational excellence; lean production (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
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