Managing through measures: a study of impact on performance

Abstract

Purpose -This study investigates the use of performance measures and how performance measurement impacts performance. Design/methodology/approach -This study was conducted through multiple case studies in a single organisation. Comparisons are made between performance measurement practices in comparable high and average-performing business units. Findings -The findings suggest that current research into the impact of performance measurement on performance may be too simplistic in its approach as much of the research relies on studying the physical and formal systems used, ignoring the types of factors found to be important in this study.Research limitations/implications -Being based on a single organisation, the wider applicability of the specific findings from this study should be questioned. However, if, as we suggest, the interactive nature of the use of the measurement system is important, future research will need to find ways of observing, measuring and quantifying this interactivity to allow a richer picture of the impact of performance measurement on performance to be developed. Practical implications -The differences observed between the high and average-performing cases was in the way they managed with the measures. Average-performing business units used the performance measurement system as a simple control system, whereas, high performing business units were using the measurement system much more interactively. Originality/value -This paper highlights the importance of using performance measures interactively and suggests further research into Simons' concept of "interactive control".

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“…Literature on performance measurement and management mainly focuses on the content of performance measurement and its position in relation to strategy (Kennerley and Neely, 2002;Ghalayini et al, 1997;Kaplan and Norton, 1992;Lynch and Cross, 1991). Increasingly the question of how performance measurement systems impact on performance is starting to be investigated (Bourne et al, 2005). In the public sector, performance measurement and management is a subject attracting a lot of research interest.…”