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3.2.3 Guidelines for performance management processes
Finally, guidelines for the alignment with the PMMS’s environment have to be
discussed. This set of guidelines focuses on the PMMS’s ability to work properly in the
organisational framework that it belongs to and on its ability to generate impact. These
guidelines are therefore focusing to a great extent on the performance management process.
Consistency with goals, business strategy and incentive system
The first and most obvious guideline is that the PMMS should be aligned with
overall goals and match with the business strategy of the focal unit [3], [41] because
different businesses with different strategies require different pieces of information for
decision-making and performance measurement.
This is especially relevant for supply chain management. When for example
a business strategy in a fashion business relies heavily on time in the sense that new
collections can be delivered fast to the outlets and be flexibly replenished by production
based on what customers bought, the performance measurement system should contain
different and consistent aspects of time. Those aspects also have to be broken down to
the relevant segments of the supply chain: when regarding the SCOR (Supply Chain
Operations Reference) model activities in a supply chain can be divided into the four
main physical processes: source, make, deliver and return. Each of the processes has
specific goals and in some companies different processes might also be carried out by
different companies. Therefore, it is important to define the indicators so that the overall
time-based strategy and the goal of the supply chain as a whole can be reached and the
indicators are distributed consistently to the different process types.
Good PMMS should also be consistent with the management reward system [39].
This also includes incentives for a successful implementation, which is a major goal of
PMMS. As discussed in the section on performance management systems, this guideline
is the heart of many contributions. It means that the main KPIs or goals should be the
basis for a reward of the relevant managers. An impact on the manager’s wallet is often
one of the main and strongest incentives for action.
Reliability of measurement process and acceptance by users
Within this guideline literature requests that data collection and methods of
calculating the performance criterion must be clearly defined [3]. Besides these aspects
this guideline should be seen in a wider context and should focus on several aspects:
• Firstly, the definition of the performance elements should be according to
the mentioned guidelines for single performance elements valid and robust.
• Secondly, the recording of the data should be clearly defined. This relates on
the one hand to the gathering of quantitative data from IT-systems which
have to be extracted consistently by a standardised extraction procedure and
on the other hand to the gathering of “soft” information such as the degree
of compliance with process standards. Here it is very important to define
the way the pieces of information are gathered and, if several individuals are
involved, that those individuals are consistently trained.