Measuring performance in a changing business environment

The design and use of performance measurement systems has received considerable attention in recent years. Many organisations have redesigned their measurement systems to ensure that they reflect their current environment and strategies. However, increasingly the environment in which organisations compete is dynamic and rapidly changing, requiring constant modification of strategies and operations to reflect these changing circumstances. Despite this, few organisations appear to have systematic processes in place to ensure that their performance measurement systems continue to reflect their environment and strategies. This paper presents case study research that investigates what actions organisations can take to ensure that their measurement systems evolve over time. Introduction For some time there has been considerable interest in performance measurement. Well-rehearsed adages such as `̀What gets measured gets done’’ and `̀You get what you measure’’ suggest that implementing an appropriate performance measurement system will ensure that actions are aligned to strategies and objectives (Lynch and Cross, 1991). Increasingly, research evidence is demonstrating that companies that are managed using integrated balanced performancemeasurement systems outperform (Lingle and Schiemann, 1996) and have superior stock prices (Gates, 1999) to those that are not `̀measuremanaged’’. Many organisations have spent considerable time and resources implementing balanced performance measurement systems. The literature in the field of performance measurement emphasises the importance of maintaining relevant measures that continue to reflect the issues of importance to the business (Lynch and Cross, 1991). However, little attention is paid to their ongoing management and few organisations have systematic processes in place to manage the evolution of their performance measurement systems to ensure that they continue to reflect the organisation’s context (Waggoner et al., 1999). Furthermore, few researchers appear to have explored the question – what factors affect the evolution of an organisation’s measurement system? This paper seeks to address this gap in the literature by presenting research that aims to identify the factors that affect the evolution of the measurement The Emerald Research Register for this journal is available at http://www.emeraldinsight.com/researchregister The current issue and full text archive of this journal is available at http://www.emeraldinsight.com/0144-3577.htm The authors are grateful to the Engineering and Physical Sciences Research Council (EPSRC) for the award of research grant number GR/K88637 to carry out the research reported in this paper.