Designing Performance Measurement Systems: Theo... Apr 2026

Relying solely on financial data (lagging indicators) while ignoring customer satisfaction or employee growth (leading indicators).

While this title is often associated with the seminal work by , Michael Gregory , and Ken Platts , it also serves as a general framework for building systems like Balanced Scorecards or Key Performance Indicators (KPIs) .

Below is a guide structured around the theoretical foundations and the practical steps to build one. 1. Theoretical Foundations Designing Performance Measurement Systems: Theo...

Are the targets (Specific, Measurable, Achievable, Relevant, Time-bound)? Is the data source reliable and automated where possible?

Use the data to manage the business. This is where you review results and make decisions. Relying solely on financial data (lagging indicators) while

The system shouldn't just tell you if you hit a goal, but also help you question if you are measuring the right goal [1]. 2. Practical Design Steps Designing a system typically follows a four-phase process: Key Actions 1. Design

A more modern evolution that considers five facets: Stakeholder Satisfaction, Strategies, Processes, Capabilities, and Stakeholder Contribution [2]. Use the data to manage the business

Before building, you need to understand the "why" behind the system.