Business School's Performance Management System Standards Design

By Azis, Anton Mulyono; Simatupang, Togar M. et al. | International Education Studies, March 2014 | Go to article overview

Business School's Performance Management System Standards Design

Azis, Anton Mulyono, Simatupang, Togar M., Wibisono, Dermawan, Basri, Mursyid Hasan, International Education Studies


This paper aims to compare various Performance Management Systems for business school in order to find the strengths of each standard as inputs to design new model of PMS. There are many critical aspects and gaps notified for new model to improve performance and even recognized that self evaluation performance management is not well developed in school toward a competitive education market. The exploratory study and comparative study methodology were used to develop a conceptual model based upon literature review. An exploratory study approach was used to investigate the way in which PMS actually evolve within business school institution, while comparative study was done to determine relationship among PMS based on literature review and secondary data. Based on information gathered about several standards applied for business school, hopefully, there will be a valuable opportunity to create new PMS model that could cover every weaknesses and strengths that each standard had, and the new model will manage business school performance more comprehensively as well.

Keywords: PMS, design, business school

1. Introduction

Issues relating to performance management system have been on serious agenda of business school institutions for last twenty years following the similar attention on corporate organizations. Armstrong (2000) defines performance management system (PMS) as a mean in delivering sustained success through strategic and integrated process by developing the performance of workers or staffs and by individual and teams capabilities improvement. Heinrich (2002); Ittner and Larcker (2001); Otley (1999); and Kravchuk and Schack (1996) define PMS as steps to define goals, strategy selection to attain goals, to allocate decision rights, and to measure and reward performance. This will leads institution to have an appropriate steps for setting its goals, where to go and how to be there. Accordingly, Thomas (2007) noticed parallel and quite important discussions about the character, significance and relevance of business schools in the recent growing environment competition. Some comments e.g. from Mintzberg (2004) or Ghoshal (2005) have simultaneously indicated business schools doing irrelevant research, too market focus and pandering to the ratings, weak in asking important questions, practicing curricular fads, and not focus to professional managerial skills but to specialist and analytical skill.

Furthermore, in Indonesia, there is official standard for measuring performance of higher education called BAN PT Accreditation, but there is no specific standard to measure business school. Hence, Indonesia BAN PT is used to measure all kind of study program or department in university or college. This research aim to explore the effectiveness of BAN PT for business school PMS through comparative study with other PMS applied in various developed country, in order to find any weaknesses or opportunities that could be a foundation for a better improvement of Indonesia PMS.

Accordingly, PMS has been playing an important role in managing organization performance over time towards desired goals (Carpineti, 2008). The main purposes of PMSs as noted by e.g. Simons (2000) or Kaplan and Norton (2001) are supporting the process of decision making with sufficient information considering achievement of the targets and the accuracy of the estimation. PMS also aims to reflect organizational culture and philosophy (Medori & Steeple, 2000), and describe how well the financial and non-financial indicators of organization performs (Wibisono & Khan, 2002).

Moreover, Bititci et al. (2006) consider the most essential thing in a design of performance management system that PMS is evolving the style of management style and the culture of organizational. In their citation review, Marr and Schiuma (2003) found contributors in performance management systems design from a broad diversity of subject areas including management, OM, marketing, finance, accounting, economics, HRM, organizational behavior and as well as managing higher education. …

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