Performance measures: the link with organizational strategy

The quality movement,—in particular Total Quality Management (TQM)—has focused attention on performance measures. Traditional performance measures are deficient in that they tend to be aggregative, backward looking, and internally directed. A new wave of performance measures is emerging to cope with a customer oriented focus and the process of continuous improvement. Even where organizations are driven by a TQM philosophy, they often experience difficulties in implementing a system for continuous improvement. Many fail to link performance measures with the organization's strategic plan. A pilot research study has been conducted to examine the relationship between organizational goals and performance measures. This paper reports on the outcomes of this pilot study and discusses the application of these new performance measures in manufacturing firms in southwest Sydney, Australia.