A framework to assess performance measurement systems in SMEs

Abstract

Purpose – The purpose of this paper is to develop a framework that small and medium size enterprises (SMEs) can use to assess their performance measurement system (PMS) in order to identify the main weaknesses and take corrective measures. Design/methodology/approach – Starting from a review of the recommendations provided in literature regarding performance measurement in companies, a list of general characteristics of a “good” PMS is defined. The identified PMS general features are then tailored to SME needs through an analysis of the characteristics of SMEs and a survey of their performance measurement current practice. Finally all the requirements are included in a framework designed to support SMEs in critically reviewing their PMS and enabling its effective use. Findings – The main characteristics of SMEs are reviewed and classified; the general characteristics of a “good” PMS are collected from the literature and then adapted to the SME context, thus obtaining a list of PMS requirements for SMEs; moreover a tool for PMS self-assessment is developed. Research limitations/implications – Research is still at an early stage and applications of the tool in real settings will offer the possibility to refine and validate it. Practical implications – The tool proposed codifies best practices and makes them accessible by SMEs in a simple way, thus supporting companies in the process of continuous improvement of their PMS. Originality/value – The field of performance measurement in SMEs is an emergent area of study. The paper highlights the necessity of PMS assessment instruments suitable for SMEs and defines a new tool starting from the analysis of SME needs and characteristics.