Measuring the performance of healthcare organizations has become a crucial yet challenging task, which is the focus of this study. The paper’s primary goal is to identify the key factors that shape healthcare organizations’ performance management systems in Serbia, which can serve as useful guidelines for implementing sustainable solutions. Additionally, the aim is to emphasize the importance of a broad implementation of performance measurement systems to facilitate strategy implementation and enhance organizational effectiveness. The empirical research involved an online survey of 280 respondents, including managers, executives, and operational staff from both private and public healthcare organizations in Serbia. Statistical analysis was conducted using SPSS 20. The study identifies key challenges, including the lack of a developed performance measurement system, weak support from information and management systems for performance improvement, and an organizational structure that does not support performance enhancement. Furthermore, it has been found that a deeper understanding of the essence of measurement significantly contributes to identifying problems in its application in the healthcare sector. It was also observed that the more challenges identified in the measurement process, the less favourable the perception of the flexibility and adaptability of the system.

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