Performance management and performance measurement are inseparable processes. This topic focuses on two control approaches and introduces the concept of an integrated performance management system as an enterprise-wide management system which links strategic objectives, core business strategies, resources, and processes and provides a view of organisational performance in a holistic and system-based manner.

Learning Objectives

1.Explain and apply key elements of the levers of control framework of Simons (1995) for implementing strategy .

2.Understand how financial and non-financial measures are used to evaluate organisational performance.

3.Communicate the role of strategy maps in the balanced scorecard process.

4.Evaluate and develop a balanced scorecard.

5.Explain how a balanced scorecard is implemented.

6.Identify and communicate the strengths and weaknesses of the balanced scorecard.

7.Explain agency theory and the link between agency costs and reward systems.

8.Outline how compensation is used to motivate performance.

9.Discuss potential design changes in performance management systems.

10.Describe an integrated performance management system, its purpose and implementation requirements.