Performance management: Veronica Martinez and Nike Kennerley report on a case study of a utilities firm to determine the pros and cons of modern performance management systems.(TECHNICAL MATTERS)

Financial Management (Chartered Institude of Management Accountants), February, 2006 by Kennerly, Mike; Martinez, Veronica

Many organisations strongly favour the use of broad-spectrum performance management systems (PMSs) over that of traditional, financially focused systems. This has partially been driven by the popularity of balanced scorecards--a management fad developed over a decade ago. Evidence suggests, for example, that in 2001 balanced scorecards had been adopted by 44 per cent of all organisations--although "balanced scorecard" has become the generic term for a PMS that goes beyond a regular financial measurement system.

Recent research conducted by the Centre for Business Performance at Cranfield School of Management shows that organisations generally implement PMSs in order to:

* Monitor productivity.

* Communicate strategy.

* Reduce...

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