Lack of information as a barrier to the adoption of performance measurement system
Hana Gruntová Kolingerová
February 19th, 2015
Organisations have been implementing standardised performance measurement systems increasingly often in recent decades. The implementation of such a tool is a complex process involving many obstacles, in particular a lack of information. While there are a number of practically oriented publications and a wealth of Internet resources about the issues of performance, finding relevant information involves difficulties such as unclear terminology in the field, the quantity of existing performance measurement systems and a lack of manuals for designing one’s own solution. How is the perception of a lack of information for selecting an adequate tool related with the current performance measurement practice?
The Institute for Evaluation and Social Analyses (INESAN) conducted a research analysing the current systems, methods and approaches to performance measurement at organisations in the Czech Republic in May 2012. The sample involved organisations that have decision-making powers, being the originators of the set practice. In total, there were 331 interviews with the leaders of the various organisations (executives, CEOs and CFOs).
Based on the analysis, it can be said in general terms that organisations that measure their performance in the individual selected areas of their activity (finance, HRM, marketing, sales) often face an issue of a lack of information needed to select an adequate system. The association proved not to be statistically important only in performance measurement in the field of strategy. Evaluation plays an obviously important role in the field of finance: the organisations that do not monitor financial performance indicators are often prone to not knowing what solution to choose (72%), much more so than the entities which measure those parameters (29%). The field of HRM follows, as organisations that do not measure their performance in this are often declare that they do not know which system to choose (48%), as opposed to those that measure their HRM performance (27%). Similarly, as regards the marketing and sales. The group of organisations that do not measure corporate strategy declared having the least issue with information.
Research results indicate that the existing practice in measuring the performance in the various areas influences the perception of sufficiency of information about the possible ways to measure using standardised tools. The analysis also shows that the current measurement of the finance area may be the chief factor for choosing a standardised tool. This reflects the tradition in measuring finance indicators, which are easily measurable and allow for the application of relatively simple performance measurement systems. Performance measurement in the fields of HRM, sales and marketing also contributes to better orientation in performance management systems, although these fields are more likely to play the role of a problematic element. By contrast, the field of strategy does not provide organisations with suggestions for choosing an optimum tool, which may reflect the complexity and a high degree of abstraction in this area.