Performance evaluation model for R&D department: An integrated balanced scorecard and analytical hierarchy process approach

R&D activities and the most common source of it, R&D departments, become more critical than ever for organizations to survive in this highly competitive environment. In order to gain competitive advantage in the market, organizations are obliged to generate their own technologies. As a result, the process of this technology generation, which manages the funnel from idea to the product in the market, should be monitored, assessed and managed effectively. Despite the difficulties originated from the nature of R&D activities, companies are forced by competitive external pressures to evaluate the process and corresponding results. This paper aims to integrate the balanced scorecard (BSC) and analytical hierarchy process (AHP) in order to develop an analytical approach to evaluate the performance of R&D departments. The model proposed by this study, weighs and ranks main indicators affecting the R&D performance and is applied to a company with an R&D experience more than 15 years.