This study aims to examine the relationship between management involvement (MI) and multidimensional performance metrics (MPM) on the performance of public sector organizations (PPO), with the effectiveness of performance management systems (EPMS) as a mediating mechanism linking internal resources to organizational outcomes.
This study uses a survey approach involving 227 heads of regional work units in provincial and district/city governments in East Java, Indonesia. This study uses the embedded two-stage approach model, which is analyzed using the partial least squares–structural equation modeling (PLS-SEM) method. The robustness check of the measurement model with CTA-PLS and the structural model is carried out with nonlinearity, endogeneity and heterogeneity tests to ensure the robustness of the model.
The results show that MI and MPM do not significantly affect PPO. However, both variables affect PPO through the mediation of EPMS. The mediating effect of EPMS on the MI–PPO and MPM–PPO relationships is full mediation.
Unlike prior studies that examine MI or MPM separately from performance management system (PMS) effectiveness, this study integrates both antecedents into a single second-order model, showing that their influence on public sector performance operates exclusively through PMS effectiveness via full mediation. This extends the limited literature on PMS effectiveness in developing-country public sectors, particularly Indonesian regional government.
