Performance Measurement and Improvement Method for Leather Footwear Industries

Nowadays, there is strong desire for business enterprises to measure, analyze, evaluate and improve their performance due to an increasing competition from current dynamic business environment. Even though, the Ethiopian Leather Footwear Industry (LFI) has huge potential for boosting the country economy, the overall performance of the sector is unsatisfactory due to factors like poor performance measurement and improvement practices, poor planning and control practices and high manufacturing cost. Most performance measurement and improvement methods used so far are not well designed to learning and rarely consider the personal ambition of employees, which results in insufficient improvement in the organizations’ performance. Thus, the aim of this study is to assess and evaluate the current performance management practice of Ethiopian LFIs and eventually forward a better firm level total performance improvement technique. A survey questionnaire is used to collect relevant data from fourteen LFIs. Furthermore, benchmarking to identify performance gaps and objective oriented cause and effect analysis to investigate the root causes of low performing industries have been used. The analyzed data confirmed low performance of the industries is due to poor performance measurement and improvement technique. In addition, most methods adopted by the industries doesn’t bring expected change yet due to the limitations with the tools and implementation strategies. As a result, a new method for performance measurement and improvement called “total performance scorecard” along with compatible performance measurement framework and implementation guideline which leads to better performance of the Ethiopian footwear industry has been introduced