Towards an Emergent Theory of the Measurement-Performance Link

The Measurement-Performance Link As international economies continue their recovery after the 2008 global economic crisis, growth rates are regarded as being ‘weak and uneven and reflective of different evolutions across different countries and regions’ (IMF 2014). In such challenging competitive environments organisations tend to focus very strongly on the management and measurement of performance in order to meet the task of staying in business. Harris & Mongiello (2001) see a company’s emphasis on performance measurement (PM) as a route to competitive advantage, and turbulent business environments, such as those currently being experienced worldwide, can be seen as a key driver of both organisational and research interest in performance measurement. However despite almost 30 years of research into performance measurement the discipline still has, what could be referred to as significant, foundational problems. There has been a lack of development of key concepts or a unified terminology in the subject area, this is mostly due to the multidisciplinary nature of the PM field which has “vast richness, but unmanageable diversity” (Neely 2007, p.2) . One of the most significant issues in the PM field is that there have been contradictory findings as to whether or not the measurement of performance actually has an impact on the achievement of performance outcomes (Franco & Bourne 2004). In fact it is suggested that measurement has become such an accepted approach that few organisations genuinely challenge why they should measure in the first place, concentrating instead on what can be measured and how to measure it (Robson 2004). In many cases the relationship between the measurement of performance and the achievement of performance outcomes is often described simplistically with catchall phrases like “you can’t manage what you can’t measure”. These phrases imply a simple association between measurement and action in order to achieve performance. The reality of the relationship is however far more complex and the existence of a positive relationship between measurement and performance outcomes have yet to be definitively proven in the literature. Difficulties lie in the ability of researchers to capture the underlying factors that may mediate the relationship between measurement and performance and the considerable influence of organisational structures, culture or operating environments on the achievement of performance. The complex social structures at play in organisations can also have a significant impact on both measurement and performance and these are not sufficiently dealt with by many of the theories applied to contemporary performance measurement research. The Performance Management literature is replete with investigations into the determinants of performance but the role of measurement in organisational outcome is rarely addressed. The following document will explore whether this fundamental gap in the research may be bridged by the adoption of a meta-theoretical perspective, in this case an emergent critical realist perspective, in the conduct of performance measurement investigations. A brief review and critique of the theoretical evolution of research into the measurement-performance link will now follow and the case for the adoption of a critical realist perspective will subsequently be advanced