Managing the tension between performance measurement and strategy: coping strategies

Abstract

Purpose

The aim of this paper is to explore an important but relatively uncharted territory: the actual functioning of performance measurement systems (PMS) in their organisational context. The objective of the paper is to document the ways in which managers go about aligning operational measures with their organisation's strategy in practice.

Design/methodology/approach

This research adopts an interpretive multiple‐case approach in order to gather rich data on the strategies used in managing operational PMS. Data were collected from detailed interviews with managers and supervisors in four government agencies.

Findings

The expectations were that the operations managers would adjust their performance measures to support the changes in strategy. This was not the case. All the interviewees employed one or more tactics to cope with the tensions between strategy and performance measures. The ten tactics identified are collected into three strategies; do‐nothing strategy, pseudo‐realigning strategy, and distracting strategy.

Research limitations/implications

This paper casts some doubt on the practice, rather than the principle, of strategy‐aligned performance management. More work needs to be carried out to ascertain how other, both for profit and public sector, organisations deal with these tensions in practice.

Practical implications

From a practitioner point of view it raises the question as to whether senior managers are exerting sufficient control over the alignment issue or providing suitable tools, methods or indeed incentives to bring alignment about.

Originality/value

The paper highlights a gap between theory and practice and suggests that the way to ensure implementation of “modern management methods,” might be to deal firstly with the issues of relevance, timeliness, structure, integration, and symmetry.

Citation

Johnston, R. and Pongatichat, P. (2008), "Managing the tension between performance measurement and strategy: coping strategies", International Journal of Operations & Production Management, Vol. 28 No. 10, pp. 941-967. https://doi.org/10.1108/01443570810903104