Performance Measurement Systems
Introduction
The subject of performance measurement is encountering increasing interest in both the academic and managerial worlds. This, for the most part, is due to the broadening spectrum of performances required by the present-day competitive environment and the new production paradigm known as Lean Production or World Class Manufacturing (Hall et al., 1991). In addition there is the need to support and verify the performance improvement programmes such as Just-in-Time, Total Quality Management, Concurrent Engineering, etc. (Ghalayini and Noble, 1996).
These programmes are characterised by their ability to pursue several performances at the same time, for example the increase in the product quality together with the lowering of the production costs and the lead times, following the reduction in discards, waste, reworks, and controls. Performance measurement is how organisations, both public and private, measure the quality of their activities and services. An influential 1982 book, "In Search of Excellence," sparked interest in measuring performance. Since then, business, government and other organisations have sought to measure the extent to which they meet organisational goals. Performance measurement may sound simple, but is often a complicated process that requires deep strategic thinking and assessment.
Performance measurement systems (PMS), such as Kaplan and Norton’s (1992, 1996a) Balanced Scorecard, focus on organisational performance and, although the impacts of these systems on organisational performance is a much debated question, they may be considered as a means of reaching performance objectives, thus the interest in these systems and their use. Considering their support role in both tactical and strategic decision making (Kueng et al., 2001), PMS are designed for executives, although not exclusively, and thus have an executive information system (EIS) component (Turban et al., 2002, 2007). PMS can be used collectively by the
The subject of performance measurement is encountering increasing interest in both the academic and managerial worlds. This, for the most part, is due to the broadening spectrum of performances required by the present-day competitive environment and the new production paradigm known as Lean Production or World Class Manufacturing (Hall et al., 1991). In addition there is the need to support and verify the performance improvement programmes such as Just-in-Time, Total Quality Management, Concurrent Engineering, etc. (Ghalayini and Noble, 1996).
These programmes are characterised by their ability to pursue several performances at the same time, for example the increase in the product quality together with the lowering of the production costs and the lead times, following the reduction in discards, waste, reworks, and controls. Performance measurement is how organisations, both public and private, measure the quality of their activities and services. An influential 1982 book, "In Search of Excellence," sparked interest in measuring performance. Since then, business, government and other organisations have sought to measure the extent to which they meet organisational goals. Performance measurement may sound simple, but is often a complicated process that requires deep strategic thinking and assessment.
Performance measurement systems (PMS), such as Kaplan and Norton’s (1992, 1996a) Balanced Scorecard, focus on organisational performance and, although the impacts of these systems on organisational performance is a much debated question, they may be considered as a means of reaching performance objectives, thus the interest in these systems and their use. Considering their support role in both tactical and strategic decision making (Kueng et al., 2001), PMS are designed for executives, although not exclusively, and thus have an executive information system (EIS) component (Turban et al., 2002, 2007). PMS can be used collectively by the
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