Combining Simple Multiple Attribute Rating Technique and Analytical Hierarchy Process for Designing Multi-criteria Performance Measurement Framework
The purpose of this article is to design specific type of multi-criteria performance measurement (MCPM) framework using the virtues of both simple multiple attribute rating technique (SMART) and analytical hierarchy process (AHP) notions. The article largely focuses on selection of key performance indicators (KPIs) using combined merits of these two methods. Identifying KPIs is one of the major challenges in designing of MCPM frameworks/models and it is one of causes of failure while firms are implementing performance measurement systems. The MCPM framework has been designed by considering the needs of all critical stakeholders as crucial input, namely customers, shareholders, environment & local community, employees and suppliers. Then the strategic objectives of the case studied company were outlined with help of strategy map; all potential performance measures were listed for each strategic objective. Six evaluation criteria were applied to identify 19 KPIs among 46 potential indicators. These criteria were compared each other using AHP; all possible performance indicators were evaluated against each criteria through SMART approach. The findings of this article reveal the importance of combining SMART and AHP for selection of KPIs during designing of MCPM framework. Besides, it also indicates how companies can apply the ideas of balanced scorecard (BSC) and performance prism in order to set strategic objectives. In general the findings are based on “Contingency Theory” which emphasizes that there is no one best approach to manage the whole and that it depends on various situational factors.
