Effects of Data Envelopment Analysis on Performance Assessment: A Cognitive Approach

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Author(s): Heinz Ahn (Institute of Management Control and Business Accounting, Braunschweig University of Technology, Germany)and Nadia Vazquez Novoa (Institute of Management Control and Business Accounting, Braunschweig University of Technology, Germany)
Copyright: 2018
Pages: 25
Source title: Operations and Service Management: Concepts, Methodologies, Tools, and Applications
Source Author(s)/Editor(s): Information Resources Management Association (USA)
DOI: 10.4018/978-1-5225-3909-4.ch027

Keywords: Business & Management / Business Science Reference / Management Science / Operations and Service Management

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Abstract

This paper examines the Data Envelopment Analysis (DEA) methodology from a cognitive perspective. Specifically, it analyzes (a) the role of DEA scores as an overall efficiency measure and (b) to what extent the presence of DEA scores for a non-financial performance appraisal influences a posterior financial performance assessment. The study confirms that the efficiency score acts as a strong performance marker when deciding on which decision making units (DMUs) should be awarded for their non-financial performance. Furthermore, it shows that the results of the non-financial performance evaluation may act as an anchor which significantly influences a posterior financial assessment. These insights have practical consequences for planning, reporting, and controlling processes that incorporate DEA efficiency scores.

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Effects of Data Envelopment Analysis on Performance Assessment: A Cognitive Approach

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