Business performance measurement: theory and practice

Half-title......Page 3
Title......Page 5
Copyright......Page 6
Contents......Page 7
Contributors......Page 11
Preface......Page 13
Part I Performance measurement – functional analyses......Page 17
Introduction......Page 19
A tool of financial management......Page 20
An overall business objective......Page 24
A mechanism for motivation and control......Page 28
Accounting approaches to control......Page 29
Performance drivers......Page 33
Connections between the approaches......Page 34
Conclusions......Page 36
REFERENCES......Page 37
Introduction......Page 38
Industry-level studies......Page 39
Non-pecuniary measures of output......Page 40
Productivity today......Page 41
Refocusing on good marketing inputs: activities and assets......Page 42
Market orientation......Page 43
Customer satisfaction......Page 44
Customer loyalty......Page 45
Brand equity......Page 46
Feedback loops......Page 47
Translating multiple measures into practice......Page 48
Subjective versus objective measures......Page 49
Efficiency versus effectiveness......Page 50
What to do while we’re waiting......Page 51
REFERENCES......Page 52
Background......Page 57
The past: Pre-1980......Page 60
The present: 1980s–2000......Page 61
The future: 2000 and beyond......Page 62
Thoughts for the future......Page 63
REFERENCES......Page 65
Introduction......Page 67
REFERENCES......Page 77
Part II Performance measurement – theoretical foundations......Page 79
REFERENCE......Page 80
Background......Page 81
A diversity of meanings of performance......Page 83
Performance and the causal model......Page 85
Proposition 1......Page 87
Performance and decision making......Page 88
Proposition 4......Page 89
Performance and measurement......Page 90
Performance is only a relative term......Page 91
Proposition 9......Page 92
Performance can be managed......Page 93
REFERENCES......Page 94
Introduction......Page 96
Principle 1: Performance should be clearly defined......Page 97
Principle 2: Performance should be accurately measured......Page 100
Principle 3: Rewards should be contingent on measured performance......Page 102
Performance measurement in the airline industry......Page 104
Evidence of dysfunction in airline performance measurement......Page 106
Vignette 1: “I don’t know how I’m measured” (violation of principle 1)......Page 107
Discussion of vignette 1......Page 108
Vignette 2: “Team delay” (violation of principle 2)......Page 109
Discussion of vignette 2......Page 110
Discussion of vignette 3......Page 111
Vignette 4: “I know you’ll do your best” (violation of principle 3)......Page 112
Discussion of vignette 4......Page 113
Alternative models of performance measurement......Page 114
BIBLIOGRAPHY AND REFERENCES......Page 119
Variable pay for performance and motivation......Page 123
Intrinsic and extrinsic motivation......Page 124
Motivation crowding-out effects......Page 126
Theoretical background......Page 127
Empirical evidence......Page 128
Why intrinsic motivation is needed......Page 130
Disadvantages of intrinsic motivation......Page 131
The art of producing the right motivation......Page 132
Concluding remarks......Page 134
REFERENCES......Page 135
Introduction......Page 139
Literature review......Page 140
Research method......Page 143
Results......Page 145
Discussion and limitations......Page 149
Implications......Page 151
Conclusions......Page 152
Appendix A......Page 154
REFERENCES......Page 155
Part III Performance measurement – frameworks and methodologies......Page 159
Introduction......Page 161
Existing performance measurement frameworks......Page 162
Characteristics of performance measurement frameworks......Page 165
The Performance Prism......Page 166
Conclusion......Page 169
REFERENCES......Page 170
The challenge of creating shared understanding and focus......Page 172
The importance of shared understanding to executive teams......Page 175
Methodology......Page 177
The impact of focus on strategic planning effectiveness......Page 182
Case example: Medco......Page 183
Case example: Moveco......Page 184
The strategic importance of the critical few......Page 186
REFERENCES......Page 188
Introduction......Page 190
Analysis of the field......Page 191
Requirements specification......Page 192
The IPMS reference model......Page 193
Reference model: development......Page 194
Reference model: Structure......Page 195
Elements at each level......Page 198
Deployment......Page 200
Resource bargaining......Page 201
Active monitoring......Page 202
The audit process......Page 203
IPMS audit: case studies......Page 204
Case Study 1 – S. Distribution Limited (SDL)......Page 205
Case study 3 – B. Manufacturing Limited (BML)......Page 208
Audit findings......Page 209
Company-related findings......Page 210
Reference-model-related findings......Page 211
BIBLIOGRAPHY AND REFERENCES......Page 212
Introduction......Page 214
Initial case studies......Page 215
Selection of cases......Page 218
Methodology......Page 219
Cases Z1 and Z2......Page 220
Discussion and conclusions......Page 221
REFERENCES......Page 223
Part IV Performance measurement – practical applications......Page 225
Introduction......Page 227
Method and general characteristics......Page 228
Indicators or ideas?......Page 230
Co-existence of benchmarking with other approaches......Page 233
The use of third parties: Clubs and networks......Page 234
Towards a maturity curve?......Page 236
Concluding remarks......Page 239
REFERENCES......Page 240
Introduction......Page 241
Developing the hypotheses......Page 242
Qualitative study......Page 245
Survey......Page 246
Empirical findings......Page 249
Conclusions......Page 254
Future research......Page 255
Appendix......Page 256
REFERENCES......Page 258
Introduction......Page 260
Two context dimensions of performance measurement systems......Page 261
The benefits of loose coupling metrics and responses......Page 263
The case company......Page 265
A history of  “failed” performance measurement system overhauls......Page 266
Why nothing changed – the example of food margin reporting......Page 267
Analysis and conclusions......Page 270
REFERENCES......Page 273
Introduction......Page 275
Methodology......Page 276
Theory and best practices......Page 277
Why results-based performance measurement?......Page 279
The Alberta experience......Page 280
Overview of Oregon, Minnesota, and Florida......Page 282
Comparison of approaches......Page 284
Whither performance measurement?......Page 289
Conclusions......Page 290
REFERENCES......Page 291
Part V Performance measurement – specific measures......Page 293
Introduction......Page 295
The impact of customer satisfaction: Swedish and American evidence......Page 296
ECSI: A pan-European customer satisfaction measurement instrument......Page 300
Application of the ECSI methodology at Post Denmark......Page 301
Generic measurements......Page 302
Specific measurements......Page 305
Benefits of the ECSI: Practitioner and academic implications......Page 307
REFERENCES......Page 309
Measures as a means of clarifying strategy......Page 311
Measures as a means of challenging strategy......Page 312
Research methodology......Page 313
British Airways: The drivers of customer satisfaction......Page 314
Case Study 2: Links between employee and customer satisfaction in company X......Page 316
Phase 2: Survey of current practice......Page 317
REFERENCES......Page 318
Introduction......Page 320
Why is radical innovation measurement important?......Page 321
Measurement of radical innovation......Page 322
Citation-weighted patents as a measure of radicality of innovation......Page 324
Hypothesis 1......Page 326
Methods......Page 327
Results......Page 328
Analysis of patent-based measures......Page 329
Discussion......Page 331
REFERENCES......Page 332
Part VI Performance measurement – emerging issues and trends......Page 335
Introduction......Page 337
The problem of observability......Page 339
Knowledge work and observability......Page 343
The problem of motivation......Page 347
Knowledge work and motivation......Page 349
The problem of TASK differentials......Page 351
Knowledge work and TASK differentials......Page 352
Practical implications......Page 355
BIBLIOGRPAHY AND REFERENCES......Page 356
Measuring eBusiness performance: Key findings......Page 359
The eRevolution: State of play......Page 361
What are eBusinesses measuring?......Page 362
The improvement agenda: priorities and barriers......Page 364
Conclusions and moving forward......Page 371
BIBLIOGRAPHY AND REFERENCES......Page 376
Index......Page 377