The Performance Measurement Revolution - Why Now and What Next - Literature review Example

Critical Review of Performance Management & Measurement Paper Student’s name Institution’s Affiliation Course +Code Professor’s name Date Critical Review of Performance Management & Measurement Paper III. SUMMARY The article by Andy Neely titled “The performance measurement revolution: why now and what next?” discusses the revolution of performance measurements in various sectors of society; right from business organisations, professional bodies, government and politicians in different parts of the world. The author examines the reasons that have made performance measurement revolve in the recent past and its potential future by asking why now and what next for the subject. Accordingly, Neely (1999) is categorical that performance measurement is factual and not fictional. The author supports this assertion by stating that in just two years, between 1994 and 1996; over three thousand six hundred articles on performance measurement were published by different authors while membership to professional bodies like the American Institute of Accountants grew by over one thousand eight hundred percent (Neely 1999). Further, professional conference firms like Business Intelligence, organized and hosted over twenty conferences on performance measurement. The article attributes the revolution of performance measurement to seven reasons that include, changes being experienced in work, the increased level of competition, certain improvement approaches and the existence of international and national quality awards. Further, Andy states that the power of information technology, a change in the role of companies and organisations, and the transformation of external pressures on a company are the other reasons for the revolution. Finally, the article offers an approach that more research can be based to examine the future of performance measurement. The article identifies those areas that need more research on determinants of business performance, how to measure business performance, deciding on the performance measures that can be adopted and how to manage a performance measurement system (Neely 1999). Additionally, Neely (1999), notes that such research must identify the most appropriate performance measures that should be used and their strengths and weaknesses as proposed in different practitioner and academic literature and work. Again, professionals and other experts must examine the valid of such measures based on their cultural and geographical settings. It follows that individuals can carry out more research so that performance measurement cannot be a preserve of disciplines like accountancy, business strategists, human resource managers and marketers or operations managers. The author believes that more research can lead to excellent progress in the field heading into the future with significant discoveries especially if academics discuss and work together on finding the solutions in other fields (Neely 1999). The overall implementation of these measures must be based on their appropriateness and validity to each profession or field. IV. KEY LEARNING POINTS Critical learning points can be drawn from reading the article. Firstly, one key point is that performance measurement has become an essential part of management practices in many professions like accounting, human resource management, operations management and formulation of business strategies. Secondly, as posited by the author, different factors influence the use and revolution of performance measurement and among these factors, information technology plays a significant role in capturing and analysing relevant data on customer satisfaction ratings in the service industry (Neely 1999). For instance, in the hospitality industry players are so obsessed with measurement of their performance by customers to the point of formulating different satisfaction questionnaires in the various segments of the services like bedroom, the bar, and every single restaurant in their facilities. Another learning point is that the revolution of performance measurement is a fact supported by evidence produced in many research articles in different industries across the world. The ensuing industry changes and different publications to help practitioners alter their performance indictors is a significant lesson that one can acquire from the article. Again, performance measurement did not just start yesterday but has existed over the last one century but has witnessed major changes over the years to suit different industry and market performance needs and requirements (Neely 1999). V. RELEVANT STATEMENTS TO THE SESSION The relevant statements to the session in the reading or article include the use business performance measurement becoming a management agenda as demonstrated by professional conferences organised by professional organisations and the recognition that it is getting from government and politicians (Neely 1999). Secondly, the author asks why the topic has become an agenda and what makes the topic relevant to management, especially when research demonstrates that performance measures have been a critical part of the planning and control cycle for managers as they control and plan the deployment of resources in their organisations. It follows that businesses have used the “basic management techniques” for long and performance measurement is considered as one of such practices. Imperatively, most companies should have developed better performance measurement systems and have them in place today (Neely 1999). Further, measurements have been criticised, for instance, the traditional financial measures, for several reasons yet managers have failed to align or integrate them with their business processes. Another problem is that these measures are poorly defined, lead to data overload and are historically focused as opposed to looking at the future. However, despite these challenges, they have revolved due to different reasons. Therefore, research must go beyond the criticism leveled against the performance measurements and exploit the future potential by asking relevant and specific research questions. VI. CRITICAL ANALYSIS Performance measurement is an essential component in businesses as senior executives consider how they can measure the performance of the operations, new strategies and the competitive realities. Imperatively, the need to develop such systems in many industries cannot be overemphasised because of the significant roles that they play in allowing the management of such outfits to embed best practices in their processes and operations. In his article Robert Eccles (1991) argues that the revolution of performance measures has long been witnessed in financial reporting where organisations have shifted from treating financial figures as the basis of their performance measurement to considering them as just one of the components in the wide variety of performance standards that must be evaluated by firms. Eccles (1991) contends that tracking these measures is different from giving them equal or even higher status in the determination of an organisation’s strategy, reward system and even promotions. However, in his analysis, Neely (1999) is categorical that the revolution of the performance measurement is attributed to several factors and its future is dependent on more research work that shall seek to answer relevant questions to validate the need for performance measurements in various professions and even public administration. Andy does not think that public bodies require performance measurements in their activities and processes. Conversely, recent studies demonstrate that public bodies, both profit and non-profit, require these measurements with the view of bettering their service offering and delivery (Neely 1999). Therefore, performance measurements should not be treated as a new phenomenon and that many companies and governments are trying to play the catch up game. Andy posits that organisations should not base their performance solely on their financial performance since as an approach may hinder a firm’s strategy that should focus on delivering customer service and satisfaction. The point advanced by Andy is important since governments do not deliver services with the aim of generating sales but bolstering citizen’s view of their performance. The narrative that performance measurement fit corporate players more than government bodies and agencies requires further research, especially on how governments can implement relevant performance measurement models with the aim of increasing the delivery of public goods (Neely 1999). Through Eccles’s article, it is apparent that the perceived revolution of performance measurement can offer better opportunities for management in different companies to consider other indicators of improving performance while academics and practitioners can carry out more research to understand and profile approaches that governments and companies can use in implementing these measures so that they do not look new but practical in their application (Eccles 1991). Critically, most of the existing research work and literature are in concession that performance measurement is not new in many of the professions though it may be a new approach taken by public bodies and government to bolster how citizens view their performance in particular and government in general. Conclusively, public administration is a profession or discipline that has the potential to make significant contribution to public management through effective research in performance measurement field. However, the discipline has not demonstrated a rich research perspective to allow it make such achievements and use performance measurements to gauge how the public perceives its overall performance. VII. PRACTICAL IMPLICATIONS Real business cases can use performance measurement in their operations to gauge how their output is in relation to their input. For instance, performance measurement can be used to examine financial performance of the firm, employee’s effectiveness in delivery of their duties and responsibilities. Finally, it can be used in the reward system for employees and gathering information from customers on their satisfaction of services delivered by the firm or organisation (Eccles 1991). Conclusively, the most important lesson learnt from the article is that performance measurement can be used in many fields, including public administration and government. Secondly, with more research on the subject matter, many players can understand how to implement performance measurement with their organisational goals, objectives and aims. Again, governments and public administrators can use these measurements to improve public perception on their overall performance and delivery of public goods and services. References Eccles, R.G., 1991. “The Performance Measurement Manifesto” Harvard Business Review, January-February 1991 Issue. Accessed on June 19, 2017, from https://hbr.org/1991/01/the-performance-measurement-manifesto Neely, A., 1999. “The Performance measurement revolution: why now and what next?” International Journal of Operations & Production Management, vol.19, no.2, pp.205-228. Read More