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Performance measurement model for Turkish aviation rms using the rough-AHP
and TOPSIS methods under fuzzy environment
Emel Kzlkaya Aydogan
Department of Industrial Engineering, Faculty of Engineering, Erciyes University, Kayseri, Turkey
a r t i c l e
i n f o
Keywords:
Rough set
AHP
Fuzzy TOPSIS
Performance measurement
Decision making
a b s t r a c t
In todays organizations, performance measurement comes more to the foreground with the advancement in the high technology. So as to manage this power, which is an important element of the organizations, it is needed to have a performance measurement system. Increased level of competition in the
business environment and higher customer requirements forced industry to establish a new philosophy
to measure its performance beyond the existing nancial and non-nancial based performance indicators. In this paper, a conceptual performance measurement framework that takes into account company-level factors is presented for a real world application problem. In order to use the conceptual
framework for measuring performance, a methodology that takes into account both quantitative and
qualitative factors and the interrelations between them should be utilized. For this reason, an integrated
approach of analytic hierarchy process (AHP) improved by rough sets theory (Rough-AHP) and fuzzy TOPSIS method is proposed to obtain nal ranking.
2010 Elsevier Ltd. All rights reserved.
1. Introduction
Performance measurement has a big role to achieve organizational effectiveness and it is one of the most important processes
in management literature as accurate performance measurement
is critical for judging the success or failure of a rm. For this reason,
the performance indicators must be carefully identied. Performance measurement focuses on whether a given goal of a work
has achieved its objectives, expressed as measurable performance
standards. Performance evaluations typically examine a broader
range of information on a performance program and its context
than is feasible to monitor on an ongoing basis.
In todays organizations there are a lot of performance measurement methods utilized. But these methods have to be integrated
with organizations strategic objectives (London & Beatty, 2006).
Generally some organizations have measured their performance
in some ways; through nancial performance and to evaluate the
nancial performance, the nancial ratios (protability, liquidity,
solveny, etc.) of the rms that can be used. Also non-nancial indicators play an important role in performance measurement.
Because, human become more and more important in todays complex global competition environment. Traditional performance
measurement processes, based on cost accounting information,
provide little support for organizations on their quality journey, because they do not map all process performance improvements. In a
successful total quality organization, performance will be measured
Tel.: +90 3524374901x32481.
E-mail address: ekaydogan@erciyes.edu.tr
0957-4174/$ - see front matter 2010 Elsevier Ltd. All rights reserved.
doi:10.1016/j.eswa.2010.09.060
by all content which takes role in the process. As stated by Kao and
Hung (2007), the incorporation of non-nancial performance indicators, such as the capability of manufacturing and human resource
management, provides a clearer and more relevant picture of performance. For non-measurement scale, (management style, leadership, work environment, etc). Laitinen (2002) argued that the
measurement of non-nancial indicators is therefore essential for
high technology rms to adapt to todays drastically competitive
and global business environment, as accurate and appropriate
information on the companies business strategies.
One of the methods proposed for performance measurement is
analytic hierarchy process (AHP) which is one of the multi-criteria
decision making methods (Gibney & Shang, 2007). AHP method is
widely used to solve many complicated decision making problems.
However, in recent years, in many of the studies, scientists have
utilized Fuzzy TOPSIS integrated with AHP to get the best result
in fuzzy environment.
While AHP is strongly connected to human judgment and pairwise comparisons in AHP may cause evaluators assessment bias
which makes the comparison judgment matrix inconsistent, and
to solve evaluation bias problem in AHP, Rough-AHP shall be used
as the method. In our study, we have used Rough-AHP and Fuzzy
TOPSIS after witnessing the bright results of former studies. And,
more fascinating, there is no method, or integrated method, in
the literature until now.
In this study, four Turkish aviation rms are selected and we
determined the total process in cooperation with the corporation
to evaluate their performance indicators and their weights in total
score, so we interviewed with the rms and corporations senior
HQ jP
n
X
pX i
i1
m
X
pY j jX i log pY j jX i ;
j1
Given attribute subset A, the greater the value of SGF(a, A, D), the
more important attribute a is for decision D.
3. Fuzzy TOPSIS
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Clearly, the indiscernibility relation dened is an equivalence relation (reexive, symmetric and transitive). The family of all the
equivalence classes of the relation IND(B) is denoted by UjIND(B).
~
~; b
da
r
i
1h
a1 b1 2 a2 b2 2 a3 b3 2 :
3
e v~ ij ;
V
nj
i 1; 2; . . . n; j 1; 2; . . . ; J;
where
~ ij W i .
~ ij X
v
A set of performance ratings of Aj, (j = 1, 2, . . . , J) with respect to
~ ~
criteria Ci, (i = 1, 2, . . . , n) called X
xij ; i 1; 2; . . . ; n; j
1; 2; . . . ; J.
A set of importance weights of each criterion Wi (i = 1, 2, . . . , n).
Hp
n
X
pX i log pX i ;
i1
3994
i 1; 2; . . . ; n; j 1; 2; . . . ; J;
A v~ 1 ; v~ 2 ; . . . ; v~ i
min v ij ji 2 I0 max v ij jj 2 I00
;
j
i 1; 2; . . . ; n; j 1; 2; . . . ; J;
Dj
n
X
d v~ ij ; v~ i
j 1; 2; . . . ; J;
j1
Dj
n
X
d v~ ij ; v~ i
j 1; 2; . . . ; J:
10
j1
CC j
DJ
;
Dj Dj
j 1; 2; . . . ; J:
11
Step 6: Rank preference order choose an alternative with maximum CC j or rank alternatives according to CC j in descending order.
4. A new methodology for performance measurement
Performance measurement has received great attention from
the researchers over the last few decades (Bassioni, Price, & Hassan,
2004; Kagioglu, Cooper, & Aouad, 2001). Globalization and the
increasing competition in the business environment created a need
for measuring performance and determining critical success
factors.
Performance measurement can also be dened as the process of
quantifying the efciency and effectiveness of an action (Amaratunga
& Baldry, 2000). Therefore, performance measurement is the process of determining how successful the organizations or individuals have been in attaining their objectives and in implementing
their strategies (Evangelidizs, 1992).
There are many denitions related to performance measurement. The changes of the denitions especially emanate from
complexities of the globalized world conditions. In a simple environment, performance measurement was not hard to perform successfully. However, at present, where there are many factors and
unexpected changes take place incessantly, it is very hard to
perform.
Bourne, Franco, and Wilkes (2003) stated performance measurement as the process of assessing progress toward achieving
pre-determined goals. It is typically conducted by program or
agency management. In US Government Accountability Ofce
Glossary (Kingsbury, 2005), performance measurement and evaluation are comprehensively explained. It is stated that performance
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the third combination in the third row describes that the rm disapproved if the risk is high, even if quality and effectiveness are
high, efciency, and occupational satisfaction are medium.
For the decision table of Table 1, we can get criteria signicances of risk, quality, effectiveness, efciency, and occupational
satisfaction by the following process:
U n INDfa; b; c; d; eg ff1g; f2g; f3g; f4g; f5g; f6g; f7g; f8g; f9g;
f10g; f11g; f12g; . . . f13g; f14g; f15g; f16g;
f17g; f18g; f19g; f20g; f21g; f22g; f23g; f24gg;
U n INDfDg ff2; 4; 8; 9; 11; 14; 15; 17; 19; 20; 21; 23g;
f1; 3; 5; 6; 7; 10; 12; 13; 16; 18; 22; 24gg
fD1 ; D2 g;
U n INDfb; c; d; eg ff4; 10g; f8; 12; 15g; f3; 20g; f2; 18g; f1; 14gg
fX 1 ; X 2 ; X 3 ; X 4 ; X 5 g;
PX 1 2=24;
pD1 n X 1 1=2;
pD2 n X 1 1=2;
PX 2 3=24;
pD1 n X 2 1=3;
pD2 n X 2 2=3;
PX 3 2=24;
pD1 n X 3 1=2;
pD2 n X 3 1=2;
PX 4 2=24;
pD1 n X 4 1=2;
pD2 n X 4 1=2;
PX 5 2=24;
pD1 n X 5 1=2;
pD2 n x5 1=2;
dimensions of business performance and the corresponding indicators, both nancial and non-nancial, that are used to evaluate
those rms under aforementioned expectations. These identied
ve important dimensions of performance are Risk, Quality, Effectiveness, Efciency, and Occupational satisfaction. We arranged the
hierarchy structure of the performance indicators with the rms
and the corporations senior management cadre (i.e. evaluation
cadre) and it is presented in Fig. 2
4.2. Calculate the weights of criteria
After forming the hierarchy of the problem, decision table is
built. In decision table (i.e. Table 1) rows indicate the distinct objects, and columns indicate the different attributes (i.e. performance indicators) considered. Initially decision column is empty.
The risk, quality, effectiveness, efciency, and occupational satisfaction criteria are rated using the 1, 2, 3 values. Only for the Risk
criteria 1 means low, 2 means medium and 3 means high whereas
these mean the contrary for other criteria; 1 high, 2 medium and 3
low. Secondly, we can make a table that lists different combinations of criteria rates before evaluation process. In Table 1, we list
24 different combinations. Then the table is given to evaluation
team to make a decision. The number 1 in decision column represents the Turkish aviation rm approves and the number 0
represents the Turkish aviation rm disapproves. For example,
w1 =w1
6
6 w2 =w1
6
6 w3 =w1
6
6
4 w4 =w1
w5 =w1
w1 =w2
w1 =w3
w1 =w4
w2 =w2
w2 =w3
w2 =w4
w3 =w2
w3 =w3
w3 =w4
w4 =w2
w5 =w2
w4 =w3
w5 =w3
w4 =w4
w5 =w4
w1 =w5
7
w2 =w5 7
7
w3 =w5 7
7:
7
w4 =w5 5
w5 =w5
For risk, quality, effectiveness, efciency and occupational satisfaction criteria, the judgment matrix J is constructed according to criteria signicance as follows:
7
6
1
1:332 2:899 3:996 7
6 0:744
7
6
J6
1
2:176
3 7
7:
6 0:558 0:751
7
6
1
1:378 5
4 0:256 0:345 0:459
0:186 0:250
0:333 0:725
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Risk
Quality
Firm-1 (F1)
Efficiency
Effectiveness
Firm-2 (F2)
Firm-3 (F3)
Occupational
satisfaction
Firm-4 (F4)
Table 1
Decision table about risk, quality, effectiveness, efciency, and occupational
satisfaction.
U
Risk
(a)
Quality
(b)
Effectiveness
(c)
Efciency
(d)
Occupational
satisfaction (e)
Decision
(D)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
2
1
3
1
2
2
1
1
2
3
1
3
2
1
2
2
2
2
2
2
2
2
2
2
3
2
1
2
3
3
3
2
1
2
2
2
2
3
2
2
2
2
1
1
2
3
2
1
1
2
1
1
3
2
3
2
2
1
2
2
3
1
2
3
2
2
3
1
2
1
3
3
3
3
2
1
2
2
3
2
3
1
1
2
3
3
2
2
2
3
2
2
1
2
2
3
2
3
2
3
2
3
2
2
3
3
3
2
3
2
2
3
3
3
2
2
3
2
1
3
0
1
0
1
0
0
0
1
1
0
1
0
0
1
1
0
1
0
1
1
1
0
1
0
CI
kmax n
;
n1
Table 2
Linguistic values and fuzzy numbers.
Linguistic values
Fuzzy numbers
(0, 0, 0.2)
(0, 0.2, 0.4)
(0.2, 0.4, 0.6)
(0.4, 0.6, 0.8)
(0.6, 0.8, 1)
(0.8, 1, 1)
D1
12
D1
r
1
0 0:2182 0 0:2912 0 0:3642
3
r
1
1 0:1632 1 0:2172 1 0:2712
3
r
1
1 0:0812 1 0:1222 1 0:1622
3
r
1
1 0:0192 1 0:0372 1 0:0562
3
r
1
1 0:0542 1 0:0682 1 0:0682 3:860
3
r
1
1 0:2182 1 0:2912 1 0:3642
3
r
1
3
r
1
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A1
A2
A3
A4
Weight
C1
C2
C3
C4
C5
(0.6, 0.8, 1)
(0.4, 0.6, 0.8)
(0.8, 1, 1)
(0.2, 0.4, 0.6)
0.364
(0.6, 0.8, 1)
(0.6, 0.8, 1)
(0.4, 0.6, 0.8)
(0.4, 0.6, 0.8)
0.271
(0.8, 1, 1)
(0.2, 0.4, 0.6)
(0, 0.2, 0.4)
(0.4, 0.6, 0.8)
0.068
Table 4
Weighted evaluation for the alternative Turkish aviation rms.
A1
A2
A3
A4
A*
A
C1
C2
C3
C4
C5
Table 5
Rough AHP-fuzzy TOPSIS results.
References
Alternatives
Dj
D
j
CCj
A1
A2
A3
A4
3.860
3.776
3.986
3.760
1.163
1.248
1.037
1.269
0.232
0.248
0.206
0.252
CC j
Dj
Dj
1:163
0:232:
3:860 1:163
Dj
Similar calculations are done for the other alternatives and the results of fuzzy TOPSIS analyses are summarized in Table 5. Based
on CCj values, the ranking of the alternatives in descending order
are Turkish aviation rm 4, 2, 1, 3. These results indicate that Turkish aviation rm 4 has the best performance.
5. Conclusion and suggestions
Performance measurement is one of the important functions of
human resource management process. Performance measurement
is also an important application that constitute a sound organization structure. In this evaluation period, dening the performance
measurement criteria and weighting these criteria are important
decision making problems. For evaluating performance of the
Turkish aviation rm, rough-AHP and fuzzy TOPSIS are applied. Despite the fact that AHP and Fuzzy TOPSIS have been utilized in
many places due to their easy-to-apply features and effectiveness
in multi-criteria decision making, there has not been any study
in the literature about the application and theory of combined
rough-AHP and fuzzy TOPSIS. However, in rough-AHP, the qualitative judgment can be quantied to make more intuitionistic comparisons and reduce or eliminate assessment bias in pairwise
comparison process. And, this increases the effectiveness of our
method compared to others. The proposed method is important,
because it can be implemented to military structures and other
areas. In future researches, rough analytic network process
(rough-ANP) approach which takes into consideration the interactions between criteria will be used and the results will be compared in fuzzy environment. Furthermore, group decision making
system will be improved and will be integrated with mathematical
models.
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