LECTURER: JOHN DOE

PERFORMANCE MEASUREMENT
INTRODUCTORY ROUND

Who are you?

- Name
- Employer
- Position/responsibilities
- Fun Fact
- Previous knowledge? Expectations?
TOPIC OUTLINE

Performance Measurement as Part of the Overall Management Framework 1

Measuring Financial Performance 2

Drivers of Operational Performance 3

Customer Profitability Analysis, Lifetime Value, and Benchmarking 4

Intellectual Capital Measurement and Management 5

TOPIC OUTLINE

Performance Measurement Concepts 6

Common Characteristics of Different Concepts 7

UNIT 1

PERFORMANCE MEASUREMENT AS PART OF

THE OVERALL MANAGEMENT FRAMEWORK
STUDY GOALS

- Place management theories in the context of

performance measurement.
- Categorize management theories chronologically.
- Understand importance of the balanced scorecard
approach for performance measurement.
EXPLAIN SIMPLY

1. What is performance measurement?

2. Why are management theories important for
performance measurement?
3. How did other scientific disciplines influence
performance measurement?
ORIGINS OF PERFORMANCE MEASUREMENT

Performance measurement includes:

- Collecting and analyzing of information with the purpose of reaching
an objective or target.

It has derived from different origins:

- financial and management accounting
- operations and operational management theories
- strategic management theories
PERFORMANCE MEASUREMENT VS. MANAGEMENT

Performance Measurement Performance Management

Focus of measurement: Deals specifically with Focus of management: Goes beyond
performance measures. measurement, requires process to evaluate
and respond to indicators.

Key question: Key question:

- “How can progress of strategy - “How can a strategy that has been put
implementation be tracked?” in place be managed?”
MAIN PERFORMANCE MEASUREMENT THEORIES

1. Theory of scientific management (1885–1920)

2. Theory of administration (1920–1950)
3. Human relations movement (1930–1950)
BEFORE 1950
AFTER 1950

4. Behavioral management theory (1950–present)

5. Theory of quantitative management (1950–present)
6. Strategic management theory (1970–present)
1. THEORY OF SCIENTIFIC MANAGEMENT (1885–1920)

- F. Taylor initiated modern

management and efficiency in
manufacturing.
- Key elements in theory of
rational management:
- standardization
- rationalization
- specialization
- intensification of work
Source of the image: Austrian National Library, Unsplash
2. THEORY OF ADMINISTRATION (1920–1950)

- improving governance and administration

- primary roles of organizational management

Plan Organize Command Coordinate Control

- basic factors of production process

3. HUMAN RELATIONS MOVEMENT (1930–1950)

- View business as establishment of social structure.

Basis of studies: sociology and psychology

Organization: social system
Inclusion: interpersonal relationships in an
organization

Study and explain effect on

productivity.
4. BEHAVIORAL MANAGEMENT THEORY (1950–PRESENT)

- Bureaucratic form of management did not meet human

needs causing ineffective relationships.
- Focus: Study of “informal” organization

- How do decisions really happen?

- What factors influence decision-making?
- What are vested interests of stakeholders?
5. THEORY OF QUANTITATIVE MANAGEMENT (1950–PRESENT)

- development of math and IT

- quantitative methods in
administration
- associated theories and
concepts:
- theory of rational choice
- equilibrium solutions
- models of optimization
- game theory

Source of the image: Museums Victoria, Unsplash

6. STRATEGIC MANAGEMENT THEORY (1970–PRESENT)

Idea of open system adapting to external environment and

internal structures:
- Study of relationship between external/internal factors and organizational
behavior.
- Factors are drivers for technological change within products and methods
of production.
- Corporate governance includes managing complex
structures (importance of strategy).
REVIEW STUDY GOALS

- Place management theories in the context of

performance measurement.
- Categorize management theories chronologically.
- Understand importance of the balanced scorecard
approach for performance measurement.
SESSION 1

TRANSFER TASK
TRANSFER TASK

Why did the Industrial Revolution set the stage for performance
measurement as a scientific discipline? Give a detailed
explanation.
TRANSFER TASK
PRESENTATION OF THE RESULTS

Please present your

results.
The results will be
discussed in plenary.
LEARNING CONTROL QUESTIONS

1. Frederick Taylor postulated theories on

manufacturing management, which he thought was
inefficient.

a) True
b) False
LEARNING CONTROL QUESTIONS

2. Henry Ford laid the foundation for hierarchical

structures in industry.

a) True
b) False
LEARNING CONTROL QUESTIONS

3. Modern management models concentrate on the

organisation's internal aspects.

a) True
b) False
LIST OF SOURCES

Austrian National Library (2020). Workers on a VW Beetle. 1957 [photo]. Unsplash. https://unsplash.com/photos/JlWsZPqarKc
Museums Victoria (2019). CSIRAC on Display [photo]. Unsplash. https://unsplash.com/photos/Di7WfLcrJ_I
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