Dumbing down performance measures
Abstract
Purpose
The purpose of this paper is to examine why and how firms adopt less‐than‐perfect surrogate measures and, in extreme cases, dumb down measures to support strategic scorecards.
Design/methodology/approach
The paper presents a taxonomy to classify the different types of surrogate measures and workarounds are suggested for evaluating performance when surrogate measures are present.
Findings
The use of low investment surrogate measures is tempting when firms face the prospect of measuring strategic objectives, especially around intangible assets. Current approaches tend to be ad hoc and would benefit from being more systematic.
Practical implications
The approach enables firms to recognise the potential for dumb measures, suggest workarounds and improve current practice for managing with less relevant measures.
Originality/value
The taxonomy and workarounds presented provide greater rigour, insight and legitimacy to the use of surrogate measures in scorecards.
Keywords
Citation
Walsh, P. (2005), "Dumbing down performance measures", Measuring Business Excellence, Vol. 9 No. 4, pp. 37-45. https://doi.org/10.1108/13683040510634826
Publisher
:Emerald Group Publishing Limited
Copyright © 2005, Emerald Group Publishing Limited