Performance measurement system design processes for engineering and service functions

Summary form only given. Management processes are available for the design of business unit performance measurement systems and for cascading these measures within the main functions of a business. However, there are fewer published approaches for developing measures in service functions. This paper compares and contrasts case studies of three alternative approaches for developing performance measures in support service functions, highlighting the shortcomings and benefits of each approach. The paper starts by describing the research methodology used in these case studies. It then proceeds to describe the initial two processes (Process 1, the polar fishbone approach to developing performance measures and Process 2, the department process analysis approach) before comparing the results achieved. The discussion which follows highlights the twin difficulties encountered. The results from Process 1 were not considered valuable and so there was little commitment to implement. The results from Process 2 were implementable, but the researchers were concerned about their validity in terms of alignment of the support functions measures with those of the organisation. These two dilemmas led to the use of Process 3 in the final case. This third approach is then described along with the outcomes achieved. Process 3 developed a set of objectives, which was both aligned with the business need (although expressed through the requirements of the internal customer) and locally relevant to the engineering support function. By the end of the process, the engineering support service function had a better understanding of the specific needs and requirements of the operations departments they were servicing and visa versa