Performance Management: A Framework for Analysis

Performance management systems, which tend to be taken for granted by organizations, consist of several interrelated but often loosely coupled parts. The design of these separate parts is often the responsibility of different business functions, such as management information systems, operations management, human resources and finance. When there is a degree of integration, this tends to be focused on budgeting and management accounting-based performance measures. […] More recently some attention has been paid to the development of non-financial performance measures, but this has been done on an ad hoc basis using frameworks that have little theoretical underpinning, such as the balanced scorecard. In this chapter we shall broaden this perspective by looking beyond the measurement of performance to the management of performance. Management accounting systems provide information that is intended to be useful to managers, so any assessment of the part played by such information therefore requires us to consider how managers will make use of it. The traditional framework for considering these issues was developed in the 1960s by Robert Anthony of the Harvard Business School, under the title of management control systems (Anthony, 1965).