Abstract
Purpose – The purpose of this paper is to examine the association between three organizational
factors (the use of multi-dimensional performance measures, link to rewards, and training) and three
organizational culture dimensions (innovation, outcome orientation, and teamwork) with the
effectiveness of performance management systems (PMSs).
Design/methodology/approach – Data were collected by survey questionnaire from a random
sample of 450 Australian local governments.
Findings – The performance management systems of Australian local councils are only moderately
effective in relation to performance related outcomes, and less effective in relation to the achievement
of staff related outcomes. The results indicate a significant relationship between the use of
multidimensional performance measures, link of performance to rewards, training and two
organizational culture factors (team work/respect for people and outcome orientation) with the
effectiveness of PMSs. Different factors were found to influence the effectiveness of PMSs for large and
small sized councils.
Practical implications – The findings imply that there is a need for the managers of local
government councils to improve the effectiveness of their PMS.
Originality/value – The study provides an initial empirical examination of the effectiveness of
performance management systems and the influential factors in the Australian local government
context. The study assists local government managers in effectively managing their employees and
operations.
Keywords Performance management system, Multi-dimensional performance measures,
Local government, Culture dimensions, Organizational dimensions, Performance management, Australia
Paper type Research paper