Introduction to Performance Prism:A Tool of Performance Measurement System

Abstract

This research paper describes and illustrates the practical application of a new measurement framework- The Performance Prism- Which addresses the shortcomings of many of the traditional measurement frameworks being used by organizations today. The Performance Prism, with its comprehensive stakeholder orientation, encourages executives to consider the wants and needs of all the organization's stakeholders, rather than a subset, as well as the associated strategies, processes and capabilities. DHL's board for the UK have used this framework to re-engineer their corporate measurement and reporting system and the research paper explain DHL and other firms' experiences with the Performance Prism. An extensive literature survey on performance measurement is used to identify the main aspects of the review in such systems. Various dimensions related to the characteristics of Performance Prism are explored. All the findings are then routinely put together to develop the proposed conceptual framework. The paper presents a conceptual model to review performance measurement systems (PMS) which are designed based on Performance Prism. The presented framework categorizes review processes and tools into two main categories; Business Performance Review (BPR) and Performance Measurement System Review (PMSR). In BPR, a loop is presented in three levels with regards to the five facets of Performance Prism which indicates the performance management process. PMSR deals with reviewing the efficiency and effectiveness of the design and implementation of the PMS it. Several methods and tools have been gathered from the literature in this section to examine the relevance of measures and some have been introduced to study and challenge the validity of strategic assumptions and strategies and appropriateness of the infrastructure. Implications of various factors such as organizational culture, change management and characteristics of the measures are highlighted. The framework provides a procedural action for reviewing both business performance and PMS performance when applying the Performance Prism in practice. It provides a foundation for further empirical research. This study adds to the body of literature, by proposing a comprehensive review framework to be used in Performance Prism.