Performance measurement system design in service operations

Abstract

Purpose – The purpose of this paper is to investigate the influence of firm size on the performance measurement system (PMS) design in the service context. Focusing on several aspects of the PMS design, i.e. the significance of the information attributes (PMS attributes), the way the system is used (PMS use) and the measurement mechanisms (PMS mechanisms), the significance of firm size was explored. Design/methodology/approach – Data were collected by administering a mail questionnaire survey to the top-level management of private service firms operating in Malaysia. The sampling frame was based on information provided by the Department of Statistics, Malaysia, and the Central Bank of Malaysia. An extensive search of directories/portals was undertaken to compile the mailing list of each service sector. Samples were randomly selected from the list using proportionate stratified sampling. Findings – The findings suggest that firm size influences the way their PMS was designed. The larger the firm size, the greater the emphasis placed on designing a sophisticated PMS. The results also indicate that size has a greater effect on the PMS of professional service firms, compared to mass service firms. Research limitations/implications – The limitation of the study pertains to the objective to observe the practice among service organizations on a broad scale, thus limiting the ability to comprehend the reasons for the findings. Practical implications – To the PMS designers and users, the understanding may offer a basic knowledge for designing and developing an effective and efficient PMS to be a useful tool in facing the continuous growth and stringent service market competition. Originality/value – Rather than restricted to a specific service industry, the study removes the traditional perception that insists that each service activity and problem is unique, by examining the practice of PMS among service firms from a broad-based perspective. The focus is on the commonalities that exist between them in facing the consequences of the service revolution.