The performance measurement revolution: why now and what next?

Abstract

Asks why business performance measurement has become so topical, so recently. Argues that there are seven main reasons: the changing nature of work; increasing competition; specific improvement initiatives; national and international quality awards; changing organisational roles; changing external demands; and the power of information technology. Evidence to support this assertion is drawn from the academic and practitioner literatures, interviews and discussions with people specialising in the field and a broad review of the current state-of-the-art in business performance measurement. Presents a framework onto which current research in business performance measurement can be mapped and identifies areas which require further work. To achieve sustainable business success in the demanding world marketplace, a company must ... use relevant performance measures (RSA, 1994). Politicians recognise this, as can be seen by the current and previous UK Government's obsession with league tables, and the fact that the above quote appeared in one of the UK's White Papers on competitiveness. What is not immediately obvious is why business performance measurement is on the agenda. What is it that makes the topic so relevant to management today? After all, it has long been recognised that performance measures are an integral part of the planning and control cycle (Barnard, 1962) and managers must have been planning and controlling the deployment of resources since the first organisation was established. Indeed, Chandler (1977) argues that most of the basic methods used to manage big businesses today were in place by 1910: In 1903, three Du Pont cousins consolidated their small enterprises with many other small single-unit family firms. They then completely reorganised the American explosives industry and installed an organisational structure that incorporated the "best practice" of the day. The highly rational managers at Du Pont continued to perfect these techniques, so that by 1910 that company was employing nearly all the basic methods that are currently used in managing big business (Chandler, 1977, p. 417).

Application of Key Performance Indicators in South‐eastern European Construction

“…The best performing companies will attract both the best employees and future investment and thus maximize their share value. Still, performance management system is only a component of the larger system and should be based on a balanced set of measures representing critical areas of improvement to achieve success of a construction firm (Beatham et al 2005;Kaplan 1984;Neely 1999). In spite of huge amount of research done, the construction industry still suffers from inefficiency and ineffectiveness, and has been proclaimed as the worst among all industries (Alinaitwe et al 2009;Beatham et al 2004) and therefore limps behind others.…”

“…Furthermore, even though U.K. private companies spend £1.5 billion on tools for performance measurement every year (Edwards and Thomas 2005), the industry still spends circa £1 billion on rework (Nicholson 1999). Therefore the construction ought to replace standard market competition, based on the lowest price bid, with relations based upon transparent measurement of quality and efficiency (Egan 1998) and use a set of performance indicators for benchmarking purposes (Neely 1999).…”

“…The Balanced Scorecard, (EFQM 2005;Kaplan and Norton 2005), where performance criteria vary regarding organizational specific abilities and position on the market. Nevertheless, a large number of indicators forced managers to weigh the selection of metrics' parameters wrong and vice versa, and thus to form an incorrect image of performance (Cox et al 2003;Neely 1999).…”

Monitoring and Control of an Efficient Industrial Performance Improvement within a MAUT Assessment Framework

“…Control strategies are in fact required to define, compare and select improvement actions with respect to the relationships existing between performance expressions (Bititci, 1995). Performance Measurement Systems (PMS), which are instruments that support decision-making (Bititci, 1995;Neely, 1999;Kueng et al, 1999), fulfill such a purpose. From a global perspective, a PMS is a multi-criteria instrument for informing decision-makers on a variety of matters, e.g.…”

The use of Qualitative Indicators for Performance Measurement in Manufacturing Control Systems

“…(Neely, 1999) identified that the reasons why these types of measures are criticised is because they:…”