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|کد مقاله||سال انتشار||تعداد صفحات مقاله انگلیسی||ترجمه فارسی|
|17139||2009||15 صفحه PDF||سفارش دهید|
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Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : European Management Journal, Volume 27, Issue 1, February 2009, Pages 64–78
Performance measurement systems (PMS) serve different functions. These are formal devices for control, and for the formulation and communication of strategy, and as such PMS primarily serve higher-level managers. But we can also aspire PMS to support operational managers, to motivate and enable these managers to improve operations. Building on Adler and Borys [Adler, P.S., Borys, B., 1996. Two types of bureaucracy: enabling and coercive. Administrative Science Quarterly 41(March), 61–89] and Ahrens and Chapman [Ahrens, T.A., Chapman, C.S., 2004. Accounting for flexibility and efficiency: a field study of management control systems in a restaurant chain. Contemporary Accounting Research 21(2), 271–301], we use the term enabling PMS. This study reports on a developmental approach for such PMS, based on a longitudinal case study, with action research. The company has made enormous investments in operations, and it therefore needed PMS to facilitate improvement of processes and to measure the actual realization of the benefits from their investments. The challenge was to develop a performance measurement system as an enabler of performance improvement, rather than merely as a control device. The company adopted a developmental approach to performance measurement, which was based on the following principles: (1) experienced-based, (2) allowing experimentation, (3) building on employees’ professionalism, (4) transparency and employee ownership, and (5) outside facilitators. This resulted in extended set of new and well-founded measures, it has enhanced employees’ beliefs in the PMS and their commitment to performance improvement, and it has created organizational learning concerning performance measurement.
the challenge to develop enabling performance measurement systems Performance measurement systems (PMS)—now often called “balanced scorecards” (Kaplan and Norton, 1992 and Kaplan and Norton, 2006) and preceded by the earlier French “Tableaux de Bord” (Epstein and Manzoni, 1998)—are important in many different functional areas of management, such as operations (Evans, 2004 and Davila and Wouters, 2006), marketing and sales (Löning and Besson, 2002 and Llonch et al., 2002), HRM (Bontis et al., 1999), or sustainability (Székely and Knirsch, 2005). The topic has been studied by researchers specialized in these different fields, often with little cross-fertilization, however (Chenhall and Langfield-Smith, 2007). Besides distinguishing these functional areas, it may be useful to explicate that performance measurement systems serve different functions. Such systems can be helpful for strategy formulation and communication (Simons, 1991). The structure and emphasis of the PMS, the definitions of specific performance measures, and the ambition level set for the various measures: these all make the organization’s strategy more concrete and guide the actions of managers lower in the organization (Drew and Kaye, 2007, Epstein and Manzoni, 1998 and Mooraj et al., 1999). Furthermore, PMS can be a form of diagnostic controls through measurement of actual results: such systems can focus employees on specific results that are expected from them (by senior management) and make them work harder and put in more effort (Simons, 1995). From both the strategy and the control perspectives, the PMS primarily serves higher-level managers (Ittner and Larcker, 2003, Kaplan and Norton, 1992 and Kaplan and Norton, 2006). But what about the role of PMS for managers lower in the organization, the employees whose performance is being measured? Are PMS only something for “others”, or can PMS be something that also supports operational managers in their work: PMS that motivate and enable these managers to do a better job and to improve their operations? Building on Adler and Borys, 1996 and Ahrens and Chapman, 2004, we use the term enabling PMS. We focus on enabling PMS in operations, where performance measurement is becoming more and more important ( Andrews et al., 2001, Evans, 2004 and Groote et al., 1996). There is a substantial literature on PMS in operations, and we refer to several recent papers that provide reviews of the literature ( Chenhall and Langfield-Smith, 2007, Davila and Wouters, 2006 and Kennerley and Neely, 2003). PMS may include a large number of different measures for each responsibility unit, spanning financial performance, customer relations, internal business processes, and learning and growth objectives of the organization ( Kaplan and Norton, 2006). Researchers in operations management have argued for PMS that are multidimensional (with different kinds of measures, on service, inventory, speed, costs, etc., and with a good understanding of the tradeoffs among these) and cross-enterprise ( Hausman, 2003). Empirical studies have found that operational strategies such as JIT, quality improvement and flexibility, make it relevant to expand traditional efficiency-focused performance measures and to embrace new performance measures (e.g., Abernethy and Lillis, 1995, Abdel-Maksoud et al., 2005, GChenhall, 1997, Fullerton and McWatters, 2002 and Perera et al., 1997). Yet, Chenhall and Langfield-Smith (1998) found that financial performance measures continue to be an important aspect of management accounting, although these are being supplemented with a variety of non-financial measures. However, design and implementation of PMS pose significant challenges for companies ( Melnyk et al., 2004). Far too often measurement system implementations fail ( Neely et al., 2000), and one of the key issues is how the behavior of people is affected by these systems. This study seeks to make the following contributions. First, we aim to help better understand characteristics of processes for the design and implementation of enabling PMS, which is complementary to Ahrens and Chapman (2004) who focus more on characteristics of the system than on these processes. How can organizations go about involving employees in design and implementation processes in such a way that employees will judge the PMS as something that actually helps and motivates them to improve? How can organizations avoid that such processes may start as initiatives that people are excited about and have high hopes for, but then turn into a standard template that is irrelevant at best, and may well lead to skepticism and cynicism ( Townley et al., 2003)? While several methods for implementing the balanced scorecard have been proposed— Papalexandris et al., 2005 and Bourne et al., 2003 review the literature—processes for developing enabling PMS have received less attention. As a second contribution of this study, we aim to bring together a number of different perspectives on PMS. In particular, from operations management, which has focused on characteristics of supply chains and PMS ( Lohman et al., 2004), from organizational studies, which have focused on how PMS affect the behavior of people in organizations ( Lowe and Jones, 2004 and Townley et al., 2003), and from accounting, which amongst other things has focused on measurement issues and definitions of performance measures ( Abdel-Maksoud et al., 2005, Hyvönen, 2007 and Ittner and Larcker, 2003). We demonstrate how these perspectives complement each other: because of the characteristics of specific operational processes, creating valid, useful and understandable measures is challenging. This makes it especially relevant to involve people whose performance is going to be measured: to utilize their knowledge of processes, how these are managed, and how this can be reflected in quantitative measures. A third contribution is to provide a number of managerial implications for a developmental process towards enabling PMS, which may both stimulate future research and provide guidance for practitioners. Bridging gaps between academic and managerial research is certainly a contemporary challenge ( Van de Ven and Johnson, 2006 and Walsh et al., 2007). We conducted a longitudinal case study, based on action research. This study focused on a project to develop a PMS in the Logistics department of Grolsch—a beer brewing company in the Netherlands. The project was initiated by the Director of Logistics, who heads the management team of the Logistics department. Logistics includes the departments Materials Management, Physical Distribution, Purchasing, and Packaging Development, totaling around 150 employees. The central theme of the whole study is PMS as enabling devices rather than control instruments. The study spanned a 4-year period, involving company employees, the researchers, and MSc students as research assistants. More details are provided in Section 2. There is much mo re material than can be included in a single paper, and this paper focuses on further explication of managerial implications from the overall study. We sometimes have to remain rather brief and refer to other papers from the same study for elaboration on the theoretical foundations and for more empirical results (Wouters and Sportel, 2005 and Wouters and Wilderom, 2008; Wilderom et al., 2007). The company has a strong brand name and sells nationally and internationally to customers in the hospitality industry (such as bars, restaurants, and hotels) and retail customers. The company has made very significant investments to completely rebuild its manufacturing site, production equipment, and head office. The large investments are connected to ambitious targets for growth of sales and profits, and the company’s strategy focuses on brand strength, marketing, product innovation, and excellence in production and the supply chain. Logistics’ contribution to this strategy is “to coordinate the supply chain in an effective, efficient, and innovative way for providing optimal service to our customers”. Hence, Logistics has four objectives: number one in customer satisfaction, excellence in supply chain efficiency, continuous supply chain innovations, and a professional and learning organization. Grolsch has won several prestigious national prizes for customer service and supply chain management. The remainder of this paper is structured as follows. The research method is explained in the following section. In a number of following sections, the project at the company is described. The final section concludes the paper with suggestions on how the insights obtained through this case study may relevant to other empirical settings. This structure, and also the style of the paper, is sometimes slightly unorthodox for an academic paper, and this is a deliberate attempt to write for both an academic and practitioners audience. For example, we often use the present tense rather than past tense when describing results from the case study. We often combine arguments from the literature and from the case context. For example, rather than having a separate literature review section, we present the practical challenges for the company and discuss the literature in the same section to argue for a “developmental approach” versus what we call a “Blueprint and Greenfield” approach (admittedly applying a bit of black-and-white thinking to illustrate the contrast more clearly). This “developmental approach” became better understood and explicated in the course of the study. The starting point was to explore an experience-based development process and what we than called continuous revision of the PMS (later formulated as “experimentation”). These ideas took further shape during the course of the study through going back-and-forth between the fieldwork and the literature. In other words, the developmental approach is not something that was formulated beforehand based on existing literature and then tested at Grolsch.
نتیجه گیری انگلیسی
‘‘Finally, metrics exist as tools for people’’ ( Melnyk et al., 2004). We discussed a developmental approach to design and implement a performance measurement system, based on a case study of the Logistics department of Grolsch. The key objective was to have a PMS that was not only intended for top management of Logistics, but one that employees at all levels would find helpful in their work and enabling to achieve performance improvement. This goes far beyond a high-level scorecard. From the perspective of top manage- ment, it may be sufficient to state in more general terms which high-level objectives should be reflected in the PMS through measures concerning efficiency, innovation, qual- ity, customer satisfaction, employee learning, etc. These are perhaps the usual suspects and not so surprising. How- ever, in this study the contribution of the Logistics depart- ment to the company’s strategy was quite clear at theoutset. The real challenge was to make this contribution more tangible and measurable at lower levels in the organi- zation, to provide a more concrete direction for action, to convince employees of the importance of performance measurement, and to increase their commitment for perfor- mance improvement using measures. The challenge simply did not lie in the early steps, such as focusing on defining the firm’s strategic objectives, defining each functional area’s role in achieving the various strategic objectives, and developing global performance measures capable of defining the firm’s overall competitive position. This setting may resemble the PMS challenge in operational depart- ments in many other organizations as well. The experiences from this project clearly point to the importance of involving employees in the development of performance measures, for several reasons. Firstly, to use existing intellectual capital ( Zollo and Winter, 2002 ): knowl- edge pertaining to specific existing practices for the quanti- tative measurement of operational performance. The company invested in the identification, appreciation, docu- mentation, evaluation, and consolidation of existing local knowledge and experience with respect to quantitatively capturing and reporting relevant aspects of performance. Secondly, employees are involved in the development of new metrics through a process of prototyping and experi- mentation (Carlile, 2002, 2004). Measures need to reflect specific operational characteristics and are not ‘‘right’’ the first time, so flexibility of the system is important rather than ‘‘fixing’’ the system. After the initial development of a new measure, the firm allowed for the subsequent testing and refinement (in several rounds) of its conceptualization, definition, required data, IT tools, and presentation, to- gether with employees, to arrive at a measure that is a va- lid, useful, and understandable indicator of performance in a specific local context (The Devil is in the Detail). Thirdly, this project demonstrates that it can be useful to involve employees by providing them with ownership: employees were responsible for periodically reporting on the new met- rics. Compared to a situation in which the Finance depart- ment would provide performance reports to employees and in which defensive behavior is more likely, now employ- ees were stimulated to investigate the reasons for good or bad performance, to look at the causes and to investigate improvement opportunities. This study provides a number of contributions. The find- ings help to better understand the principles that foster the creation of enabling PMS: (1) experienced-based, (2) allowing experimentation, (3) building on employees’ pro- fessionalism, (4) transparency and employee ownership, and (5) outside facilitators. Furthermore, we brought to- gether a number of different perspectives on PMS, from operations management, organizational studies, and accounting. And finally, we provide a number of manage- rial implications: Senior management needs to have a clear vision and communicate their objective for developing a PMS: is it to monitor and report upwardly in the hierarchy, or is it also (or even primarily) intended to support lower-level employees in their work? Senior management also needs to behave in accordance with an enabling PMS: balancingbetween recognizing the incompleteness of the PMS (so there is a story next to measured outcomes) and demand- ing certain performance. A developmental approach can be followed if the objec- tive is to have an enabling PMS. This approach is dis- cussed in detail in this paper. Resources and rewards are needed to facilitate a devel- opmental approach, such as time to work on it, and bestowing prestige upon PMS developers. Support from experts (IT specialists, accounting) and the availability of IT tools with which non-specialists can work (such as SAP Business Warehouse) are prerequisites. And the development process may benefit from the stimulating and challenging interaction with outsiders, such as researchers and students. Time and local autonomy are needed to really under- stand in detail what is already in place, and to evaluate what will be re-used and what not. Time and local auton- omy are also needed to not ‘‘fix’’ the PMS too soon (for example, because senior management wants to start monitoring things longitudinally), so there are still degrees of freedom for making adjustments to local con- ditions, to improve the validity, usefulness and under- standability of the PMS. At the same time, coordination with central PM initiatives is required. The developmental approach may not be equally rele- vant to every organization: A developmental approach may not be particularly rele- vant when the objective is not to introduce an enabling PMS that is intended for different levels of employees, but when a PMS is implemented only for top manage- ment, or to make and monitor agreements with custom- ers and suppliers. In some organizations PMS may be well developed and stable, so emphasis on experimentation and further development by employees may not be required. A developmental approach to shape the PMS may be less relevant if operations managers have other kinds of infor- mation that are more informative than performance measures, such as direct observations of processes. As with any study, there are limitations which may pro- vide suggestions for further research. Although the study is based on a multitude of observations, it is based on a sin- gle case study. Results may be difficult to generalize to other empirical settings, also because the researchers have not only been neutral observers; they were also involved in helping to expand and refine the PMS. However, the advan- tage of this approach is that interactions with members of the organization where always lively, detailed, and in- volved. Our ideas were critically challenged, because ideas pertained to ‘‘their’’ PMS and the development and actual usage of it. These interactions were not discussions about abstract ideas in the interest of the researchers’ project or theory. Rather they dealt with what made sense to orga- nizational members in the context and language of their own work. This type of interaction may help increasing the validity of the conclusions ( Van de Ven and Johnson, 2006).Future research could try to better understand the rea- sons why and conditions under which a developmental PMS approach is most feasible and effective. We could further explore the theoretical linkages between this approach and theories on organizational behavior and psychology. Why is a developmental approach sometimes effective? How does it work through factors such as motivation, lead- ership styles, and a better understanding (cognition) of effective actions? Which factors moderate the effectiveness of the approach? Furthermore, investigating the benefits to the organization (such as employee learning, or financial benefits), as well as assessing other consequences of a developmental approach is an intriguing line of future research.