More is none? Exploring how SMEs describe their best practices in performance measurement

Abstract

PurposeThis paper aims to provide owner/managers with access to an evidence-based study for the purpose of improving practice in performance measurement (PM) in their small and medium-sized enterprises (SMEs).Design/methodology/approachAs a qualitative case study, it adopted semi-structured interviews to explore the best practices in PM from 32 SMEs in Malaysia. The interviewees were the owner/manager, the supervisor and/or the person who is responsible for human resources in the firm. Thematic analysis was conducted.FindingsFirst, it should be no surprise, as the study echoes previous research, that the traditional, complex PM systems are not functionally suitable for most SMEs. Second, the study identifies five common capabilities (5Cs) in human capital that these SMEs require in their PM practice, all of which are claimed to contribute critically to SME success and sustainability.Research limitations/implicationsWhile qualitative studies can obtain in-depth results, it is encouraged to continue similar research with additional samples for comparison, including quantitative studies and SMEs in other countries.Practical implicationsThe findings help SME owners/managers benchmark their current practices in PM and improve toward what peer firms have been doing well to benefit organizational development in a feasible tone.Originality/valueThis research informs SME practitioners of the 5Cs mechanism found to be effective for long-term organizational survival – including during unprecedented times such as an economic downturn or a pandemic.