New performance measurement and management control systems

Abstract

Purpose

Focusing on how performance management systems support control, this article seeks to provide two “next‐generation” performance scorecards – the Performance Wheel, suitable for most organizations and the Small Business Performance Pyramid, which acknowledges the unique requirements of small business. This development considers the historical development, increasing variety and often the poorly integrated status of performance measurement systems – one of business management's most important tools.

Design/methodology/approach

The paper considers the issues of various performance measurement models – the Performance Pyramid, the Results and Determinants mode, the Balanced Scorecard – through the integration of perspectives, metrics and terminology. Further, it integrates the emphases of different approaches into a menu from which each enterprise can select the wisest option.

Findings

The Performance Wheel and the Small Business Performance Pyramid suggest these seemingly different models of control can be reduced to one overarching model. It incorporates and addresses the identified weaknesses of previous models and provides a comprehensive model of performance management that can be adapted to meet the needs of any form of enterprise – small to large, service to not‐for‐profit to manufacturing.

Research limitations/implications

The implication for business is the development of two equally important models that allow the optimal application of practice to align with organizational‐specific decision making.

Originality/value

These new models overcome the “top‐down” or “bottom‐up” shortcomings of popular systems, incorporate the insights of enterprise control and integrate the importance of mission, strategy, critical success factors and key performance indicators as they apply to organizations.

Citation

Watts, T. and McNair‐Connolly, C.J. (2012), "New performance measurement and management control systems", Journal of Applied Accounting Research, Vol. 13 No. 3, pp. 226-241. https://doi.org/10.1108/09675421211281308