Analysing the requirements of performance measurement systems

Purpose – Performance measurement is a subject that has been high on the agenda for over two decades. This article proposes making a contribution to this field by discussing how to deal systematically with all the requirements a performance measurement system (PMS) should fulfil. Design/methodology/approach – Different requirements suggested in the performance measurement literature from the past 20 years have been analysed in order to structure the different tasks to conduct when designing a PMS. Findings – The article explains how to separate requirements that can be linked to a PMS and to an individual performance measure. It also suggests three system classes depending on what requirements a PMS fulfils. Finally a three‐step procedure is proposed that describes how to evaluate and improve an existing PMS in a company. Practical implications – In practice, it is difficult to deal with numerous requirements simultaneously when designing a PMS. The article supplies measurement practitioners with tools to identify any priority important requirements. Originality/value – Several new ideas to the field of performance measurement are introduced and explained: the concept of system classes, classification of requirements and a simple three‐step procedure to evaluate and improve PMS.