Developing a business performance evaluation system: an analytic hierarchical model

Abstract

A good business performance measurement system is a very effective tool to motivate and monitor employees of a company. Although interest in creating performance measurement models is widespread, a well-designed system is rare. To be successful in today's competitive environment, a good performance measurement systems should incorporate strategic success factors. The model proposed in this study uses a three-level hierarchical schema to combine financial and nonfinancial performance measures and emphasizes external as well as internal business performance measures. In comparison with previous methods, such a method is more likely to cover a broader set of measures that include operational as well as strategic control. A prototype based on the analytic hierarchical model can be applied to other business situations.