Why do organisations measure performance?

Clarify and communicate strategy

Check that strategy is being implemented
Challenge assumptions in strategy
Comply with the non-negotiable parameters
Communicate direction
Influence, evaluate and reward behaviour
Inform managerial decision-making processes.
Provide feedback
Establish and communicate position
Benchmark
Encourage improvement and learning.
Reinforce accountability
Allocate resources
External Reporting
What gets measured gets done
You cannot manage what you cannot measure
What you measure is what you get!

The fundamental management reasons for adopting PMMs
Defining/implementing strategy
Affecting organisational behaviour
Communicate with Stakeholders
Organisational learning

Planning and implementing Strategy
Performance Measurement for clarifying strategy
Performance Measurement for communicating strategy
Performance Measurement for checking strategy implementation
Performance Measurement for assessing and re-defining strategy

The impact of Performance Measurement: Dysfunctional Behaviour
Tunnel vision concentration on only the measures within the scheme, to the exclusion of others
Sub optimisation pursuit of own narrow objectives at the expense of strategic coordination
Myopia concentration on short-term issues (long-term criteria may not show up for years)
Convergence not being exposed as an outlier on any measure, rather than a desire to be excellent
Ossification disinclined to experiment with new methods
Gaming altering behaviour to gain strategic advantage within organisation
Misrepresentation including 'creative' accounting and fraud