Handbook of Performance Measurement: Incorporating Supplement 2

Citation

Narasimhan, K. (2003), "Handbook of Performance Measurement: Incorporating Supplement 2", Measuring Business Excellence, Vol. 7 No. 1. https://doi.org/10.1108/mbe.2003.26707aae.011

Handbook of Performance Measurement: Incorporating Supplement 2

Handbook of Performance Measurement: Incorporating Supplement 2

M. Bourne (Editor),GEE: International Thomson,ISBN 1 860889 940 4(looseleaf binder),2002, 700+ pages,£240DOI 10.1108/13683040310466744

Dr Mike Bourne is based at the Centre for Business, at the Cranfield School of Management, and has helped over 20 businesses to design and implement balanced performance systems, in the past five years. Mike a chartered engineer and a chartered management accountant has 15 years of experience in manufacturing and service industries, in various capacities including directorships in subsidiary companies. A total of 26 other experts in the field have contributed to this handbook.

The handbook comprises 32 chapters grouped into eight sections. Section C on Measuring dimensions of performance is the longest one covered in 246 pages. The following section on Tools and techniques is the second longest with 138 pages. Section A includes an introduction to the handbook and a brief history of performance measurement from 1850s to the present. Over 40 useful references for further reading are given.

Section B comprising five chapters on measuring performance frameworks. In the first chapter, an overview is given of the SMART (strategic measurement and analysis reporting technique) system, the determinants and results framework, the balanced scorecard (BS), the business excellence model, and the performance prism, some of which are dealt in detail in the following chapters. In the second chapter, first a nine-step process for identifying a set of BS metrics that link to an organization's strategic objectives is described, and then addresses the difficult task of translating the different strategic segments into a prioritized list of internal process improvements using quality function deployment. This is followed by a very brief consideration of the application of SIPOC (supplier → input → process → output → customer) method, heuristic methods, design of experiments, and simulation modelling. The third chapter deals with developing effective measurement systems to monitor and control business performance in the service sector, and the relationship among the metrics, standards, and rewards. The European Foundation for Quality Management (EFQM) eExcellence Model's relationship to other key excellence frameworks is reviewed in Chapter 4, and in the final chapter of this section the performance prism, a new performance measurement framework, which aid linking stakeholder satisfaction, stakeholder contribution, and strategies, processes, and capabilities is explained.

Section C is about customer measurement and is covered in seven chapters. In this section, it is explained why customer measurement is important for organisations and how by influencing customers' behaviour, profits can be generated. With the aid of case studies, it is shown how to integrate customer satisfaction and performance measures, and how to conduct employee satisfaction surveys (including questionnaire design and problems likely to be encountered. Then attention is turned to explaining the ways of measuring and managing cycle time and first pass yield the two key process performance yardsticks. A whole chapter is devoted to describing briefly the history of statistical process control and the application of basic tools. Also covered in two separate chapters are the application of potential failure mode and effect analysis to measure the performance of key business processes, and the ways of measuring and managing intellectual capital in traditional and new economy organisations. Also described is a framework for integrating competence measures with measures of their underpinning resources. The use of financial measures both for "score-keeping" and measuring and managing progress towards achieving an organisation's objectives is also given due recognition and covered in some depth.

Section D is on tools and techniques and has eight chapters. The first two chapters deal with designing performance measurement systems and measures. In the first, the three phases of deciding what to measure, designing appropriate measures and managing with those measures are described with the aid of exhibits. The second chapter concentrates on the design of the measures: defining and recording, and is explained with the aid of a case study. The next two chapters deal respectively with how to build and test a business performance model and the pitfalls to avoid, and designing and using goal, strategy, process and activity measures. Implementation issues are considered in Chapter 5, and suggestions for increasing the chances of successful implementation are provided. In Chapter 6, examples are given to illustrate how to display measurement information, followed by in Chapter 7, how to use performance measures. Finally, in Chapter 8, the process of regularly updating the measures is illustrated with examples.

The next three sections are comparatively short. Section E comprises two chapters and is about achieving strategic alignment and integrating performance measurement systems using an audit approach. Section F is on benchmarking and comprises two chapters. The first chapter focussing on process benchmarking deals with "why?", "when?", "how?", "what?", and "who?" to bench mark. The second chapter illustrates some of the practical issues and problems in benchmarking performance measures for a manufacturing organization. Section G comprising one chapter is on performance-related pay and its effectiveness.

This well written series based on extensive research is a valuable addition to the new area of business performance measurement, in pursuit of excellence. A comprehensive bibliography is included in Section H, which also include Web addresses. The handbook will be a useful reference guide for organizations wishing either to introduce or to update their performance measurement system.

K. NarasimhanLearning and Teaching Fellow Bolton Institute, UK