Performance Management: A Value-Based Approach

Abstract

While there have been significant developments both in the theory and practice of performance measurement, few alternatives exit when it comes to performance measurement. The paper compares three frameworks widely used in performance management: strategic planning systems, stakeholder systems and the balanced scorecard. The paper argues that the theoretical antecedents of the frameworks either not clear or comprehensive. Further, the frameworks do not offer a clear performance metric and the effect of distinct factors on this measure. This paper proposes a framework linking residual income measures such as economic profit and total market value to the firm's strategic, operational, financial and organizational factors on the performance measures.