Performance management in the South African motor manufacturing industry: a framework

Abstract

South African motor manufacturers should find ways to improve their performance management systems to ensure survival in the face of strong competition in the market. The main objective of this study is to evaluate the industry’s approach to performance management and to make recommendations about a framework for performance management that can be implemented to obtain a competitive advantage. A well‐known instrument that proves to be highly effective in performance management is the balanced scorecard. This instrument manages performance on four distinct levels, namely from the financial perspective, the customer perspective, internal business processes and learning and growth. It is apparent from the results of this study that performance management is still very much a one‐way process, and that a lack of communication is the primary reason for unsatisfactory workforce performance. Furthermore, the majority of motor manufacturers consider the customer perspective as the most important of the four above‐mentioned perspectives. Motor manufacturers also disagree about the number of performance measures that need to be included in the performance management system, and the majority feel that both controllable and non‐controllable fixed costs must be included in the measurement of management performance. Shareholder value measures are also largely neglected in practice.

Citation

van der Merwe, N. and Visser, S.S. (2008), "Performance management in the South African motor manufacturing industry: a framework", Meditari Accountancy Research, Vol. 16 No. 2, pp. 189-211. https://doi.org/10.1108/10222529200800020