Explaining the effects of performance measurement on performance : An organizational routines perspective

Purpose – Existing research evaluating the effect of performance measurement (PM) on performance produces conflicting results, indicating that the effect is poorly understood. This paper aims to address this problem by proposing a theoretical model of the effects of PM on performance. Design/methodology/approach – The paper reviews the PM and MCS literature, extracting the factors that help to explain the effect of PM on performance. Then it applies the organizational routines perspective as an analytical lens to tie these factors into a coherent explanatory model. Findings – A theoretical model shows that PM has three distinct effects on the organizational processes that deliver performance – the trigger, guidance, and intensification effects. Originality/value – The paper employs the organizational routines perspective, moving beyond the description of the effects of PM on performance to offer a theoretical model explaining these effects. As such, it responds to a number of contemporary challenges in the PM field – most importantly, the broad need for a solid organizational foundation for the studies of PM and the explanation of the mechanism through which PM affects organizational performance.