Performance measurement system and relationships with performance results : A case analysis of a continuous improvement approach to PMS design

Purpose – This study aims to address an important gap between the normative view of an integrated performance measurement system (PMS) design that assumes a clean slate and the organizational realities of a PMS design as an ongoing analysis, coordination and improvement process. Design/methodology/approach – The authors present a framework for evaluating the effectiveness of a PMS based on three criteria – i.e. causality, continuous improvement and process control – and use a case study to illustrate the application of the methodology and the interpretation of results for PMS design. Findings – The determination of “driver measures” in an integrated PMS involves a complex process that requires a number of considerations not adequately addressed in prior research. Research limitations/implications – This study involves only a single case study and the model presented involves only a two‐tier analysis. Practical implications – The framework provides a simple methodology that organizations can easily adopt to analyze individual and group performance measures and relate them to the strategic performance measures of the company. Originality/value – The study follows an emerging line of research that addresses the design of an integrated PMS as an ongoing improvement process.