Background and Aim: Performance measurement is one of the important issues in management. In the health sector, evaluation of productivity using resources and facilities, of hospitals is inevitable. This study was aimed to determine the related factors of effectiveness of Performance Measurement System (PMS) in teaching hospitals and to provide a model to optimize and predict the effectiveness.

  Materials and Methods: In this descriptive study, which was done in the first 8 months of 2010, 32 teaching hospitals of Tehran were selected by means of census method and 60 questionnaires were sent. Independent variables including design, implementation and applications and their relation with effectiveness as dependent variable were investigated. Data were analyzed by SPSS (version 18) using descriptive statistic tests, Pearson correlation and linear regression at the significant level of P<0.05.

  Results: The models of quality management, international organization for standardization (ISO) and balance scored card were the models with the highest usage in performance management. The studied independent variables were moderately considered. Significant relationships were observed between the components and the effectiveness. Linear regression test indicated the importance of strategy, users and the applications of performance measurement systems.

  Conclusion: The design and application are two basic steps in effectiveness of the PMS. Moreover, strategic planning, the users and the manner of using the results, have role in effectiveness of PMS.