Though supplier performance measurement systems (SPMS) provide a key tool for buyers to govern supplier relationships and performance, they can have a detrimental impact on trust and commitment, when perceived as just a means of control. SPMS are particularly valuable in sectors characterized by high complexity and variability of supplier performance, such construction. In projects with public sector buyers, regulations can constrain the development of comprehensive SPMS and the establishment of long-term perspectives on buyer-supplier relationships, and the impact of performance measurement practices are less well understood. To explore whether and how control and commitment can be achieved through structured use of SPMS in the public sector, this paper investigates the impact of a systematic approach to supplier performance measurement on project performance (i.e. cost, time, and quality), and how these effects are mediated by commitment. These relationships are tested using structural equation modeling on dyadic survey data collected from both suppliers and public buyers in 206 construction infrastructure projects in Italy. Results show that more rigorous qualification and performance evaluation processes have a positive impact on project performance, whereas this is not the case for supplier selection processes. Supplier commitment has a positive mediating role on the relationship between performance evaluation and project performance, while buyer commitment negatively mediates the impact of a more rigorous qualification process. These findings inform our understanding of the trade-off between control and commitment, focusing on public buyer-supplier relationships in construction projects. They demonstrate the differential relevance of SPMS to final performance across phases of the contracting cycle, and the contrasting impact of buyer and supplier commitment.
- Performance measurement
- Supplier relationships