The Most Difficult Elements Involved in Establishing and Launching a Management Performance Measurement system By: Masoud Noordeh (DBA student)
The Most Difficult Elements Involved in Establishing and Launching a
Management Performance Measurement system
By: Masoud Noordeh (DBA student)
Abstract
In today‟s business organizations, an information system provides feedback about the performance of business activities, and adjustment made whenever it is necessary. In the information- based organization, it is critical for managers to have a performance measurement system that has ability to provide their information needs for easy decision making. This paper looks at the essential factors involved in establishing and launching a management performance measurement system.
Keywords: Management Systems, Key Performance Indicators, Performance
Measurement System.
Introduction
Performance measurement systems are used to establish specific objectives, increase accountability, and align employee behavior (Castellano et al, 2004).
Organizations generally use these systems to set objectives for individuals, divisions, plants, and profit center. Each system is expected to develop its own objectives consistent with overall company‟s targets. This process is called a rollup which reflects the basis that if all systems achieve their targets then the overall objectives will be met (Eckerson, 2009). Once the targets are set- up, most companies measure the performance of each unit‟s component and compare targets with actual performance for specific time periods.
On the other hand, as practitioners and academics focused much on business performance (Venkatraman &Ramanujam, 1986), measures of business performance systems (Neely, 1999), and various techniques and models for measurement (Kaplan and Norton, 1992; Ratnatunga et al. 2004), the performance management and measurement in organizations have received more attention. The challenge has been that the design and implementation of performance measurement systems for traditional measures of balanced scorecards model which was credited to Norton
Management Performance Measurement system
By: Masoud Noordeh (DBA student)
Abstract
In today‟s business organizations, an information system provides feedback about the performance of business activities, and adjustment made whenever it is necessary. In the information- based organization, it is critical for managers to have a performance measurement system that has ability to provide their information needs for easy decision making. This paper looks at the essential factors involved in establishing and launching a management performance measurement system.
Keywords: Management Systems, Key Performance Indicators, Performance
Measurement System.
Introduction
Performance measurement systems are used to establish specific objectives, increase accountability, and align employee behavior (Castellano et al, 2004).
Organizations generally use these systems to set objectives for individuals, divisions, plants, and profit center. Each system is expected to develop its own objectives consistent with overall company‟s targets. This process is called a rollup which reflects the basis that if all systems achieve their targets then the overall objectives will be met (Eckerson, 2009). Once the targets are set- up, most companies measure the performance of each unit‟s component and compare targets with actual performance for specific time periods.
On the other hand, as practitioners and academics focused much on business performance (Venkatraman &Ramanujam, 1986), measures of business performance systems (Neely, 1999), and various techniques and models for measurement (Kaplan and Norton, 1992; Ratnatunga et al. 2004), the performance management and measurement in organizations have received more attention. The challenge has been that the design and implementation of performance measurement systems for traditional measures of balanced scorecards model which was credited to Norton
References: Agheyisi, R. (2009). 5 Tips for Selecting Good KPIs for Your Business. Retrieved on 2/14/2014 from http://ezinearticles.com/?5-tips-for-selecting-good-KPIs-foryour-business&id=3323103 Bauer, K. (2004). The Power of Metrics- KPIs: Not all metrics are created equal. Eckerson, W. W. (2009). Performance management strategies. Business intelligence journal, 14 (1), 24- 28. Garrett, J. (2012). Key performance indicators help organizations measure progress Iveta, G. (2012). Human resources key performance indicators. Journal of competitiveness, 4(1), 117- 128.