A framework to assess performance measurement systems in SMEs

Abstract

Purpose The purpose of this paper is to develop a framework that small and medium size enterprises (SMEs) can use to assess their performance measurement system (PMS) in order to identify the main weaknesses and take corrective measures. Design/methodology/approach Starting from a review of the recommendations provided in literature regarding performance measurement in companies, a list of general characteristics of a “good” PMS is defined. The identified PMS general features are then tailored to SME needs through an analysis of the characteristics of SMEs and a survey of their performance measurement current practice. Finally all the requirements are included in a framework designed to support SMEs in critically reviewing their PMS and enabling its effective use. Findings The main characteristics of SMEs are reviewed and classified; the general characteristics of a “good” PMS are collected from the literature and then adapted to the SME context, thus obtaining a list of PMS requirements for SMEs; moreover a tool for PMS self‐assessment is developed. Research limitations/implications Research is still at an early stage and applications of the tool in real settings will offer the possibility to refine and validate it. Practical implications The tool proposed codifies best practices and makes them accessible by SMEs in a simple way, thus supporting companies in the process of continuous improvement of their PMS. Originality/value The field of performance measurement in SMEs is an emergent area of study. The paper highlights the necessity of PMS assessment instruments suitable for SMEs and defines a new tool starting from the analysis of SME needs and characteristics.