Describes the development and testing of a structured methodology for the design of performance measurement systems. Frameworks, such as the balanced scorecard and the performance prism, have been proposed, but until recently little attention has been devoted to the question of how these frameworks can be populated, i.e. how managers can decide specifically which measures to adopt. Following a wide ranging review of the performance measurement literature, a framework identifying the desirable characteristics of a performance measurement system design process is developed. This framework provided guidelines which were subsequently used to inform the development of a process‐based approach to performance measurement system design. The process was enhanced and refined during application in three action research projects, involving major UK automotive and aerospace companies. The revised process was then formally documented and tested through six further industrial applications. Finally the process was written up in the form of a workbook and made publicly available.
Rationale: Scholars in the field of performance measurement tend to use the term Business Performance Measurement (BPM) systems without explaining exactly what they mean by it. This lack of clarity creates confusion and comparability issues, and makes it difficult for researchers to build on each others' work. Purpose: The purpose of this paper is to identify the key characteristics of a BPM system. We do so by reviewing the different definitions of a BPM system that exist in the literature. Through this work, we aim to open a debate on what are the necessary and sufficient conditions of a BPM system. We also hope to encourage a greater level of clarity in the performance measurement research arena. Methodology: We review the performance measurement literature using a systematic approach. Findings: Based on our research, we have proposed a set of conditions of a BPM system from which researchers can choose those which are necessary and sufficient conditions for their studies. Research implications: The analysis in this paper provides a structure and set of characteristics that researchers could use as a reference framework to define a BPM system for their work, and as a way to define the specific focus of their investigations. More clarity and 2 precision around the use of the BPM systems phrase will improve the generalisability and comparability of research in this area.
The effectiveness of performance measurement is an issue of growing importance to industrialists and academics alike. Many organisations are investing considerable amounts of resource implementing measures that reflect all dimensions of their performance. Consideration is being given to what should be measured today, but little attention is being paid to the question of what should be measured tomorrow. Measurement systems should be dynamic. They have to be modified as circumstances change. Yet few organisations appear to have systematic processes in place for managing the evolution of their measurement systems and few researchers appear to have explored the question, what shapes the evolution of an organisation’s measurement system? The research reported in this paper seeks to address this gap in the literature by presenting data that describes the forces that shape the evolution of the measurement systems used by different organisations.
The design and use of performance measurement systems has received considerable attention in recent years. Many organisations have redesigned their measurement systems to ensure that they reflect their current environment and strategies. However, increasingly the environment in which organisations compete is dynamic and rapidly changing, requiring constant modification of strategies and operations to reflect these changing circumstances. Despite this, few organisations appear to have systematic processes in place to ensure that their performance measurement systems continue to reflect their environment and strategies. This paper presents case study research that investigates what actions organisations can take to ensure that their measurement systems evolve over time.
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