Plenary Lecture
Performance Management Systems (PSM) Construction and Analysis
Dr. Jiří Strouhal
Department of Business Economics
University of Economics Prague
Czech Republic
E-mail: strouhal@vse.cz
Abstract: Many references can be found in literature indicating that there have been difficulties in implementation of performance management systems (PMS) not allowing to gain the full benefit from the system (Business Intelligence, 2000; Kaplan and Norton, 2000). There are certainly many success stories, but there is now growing literature addressing the difficulties of implementation and it is claimed by some that 70 per cent of performance measurement initiatives fail (McCunn, 1998). The same rate (70%) marks failures of Balanced Scorecard (BSC) implementation (Neely and Bourne, 2000). Waal (2002) says that 56% of performance management projects fail. Research studies have shown that PMS implementation in industry still lags far behind expectations (Olsen et al., 2007).
Insufficient implementation and/or lack of inefficient PMS may lead to the poor organisational performance and on the contrary.
The two institutions LGMB and the Audit Commission in the UK suggest that, in order to improve both organisational and individual performance, the following management functions are important: (i) defining and setting organisational and individual aims and objectives; (ii) corporate planning; (iii) linking organisational strategy and service objectives to jobs and clients; (iv) identifying staff training and development needs; (v) assessing the results through personal appraisal using relevant performance indicators; (vi) performance agreements or contracts; (vii) using the knowledge gained through training to modify performance attitudes; (viii) external and internal communication systems; (ix) organisation development and performance review.
There are studies which have examined the current use of performance management. It has been pointed out that 56% of performance management projects fail, especially in the functioning phase (Waal, 2002; Waal and Counet, 2006). This implies that the functioning phase is not less important than the structural design phase. Regular activities which constitute the functioning of PMS are: data collection, analysis, drawing up and presenting reports, communication, interpreting, managers and top level must peruse reports, react to them, feedbacking with “carrot and stick“ judgement is important, planning of adjusting activities (with new KPI target values), executing of adjusting activities (the new activities probably involve that post-strategy actions will be somewhat influenced by them and they need to be adjusted slightly in the new light).
PMS functioning classically starts when implementation ends and operation by “new rules“ begins. In reports milestones set in the PMS structure, their achievement and communication of results are monitored.
Brief Biography of the Speaker: Jiří Strouhal graduated from the University of Economics Prague in 2003 and finished his doctoral studies in 2005. In 2006 he became an accounting expect (Czech accounting profession certification scheme based on British ACCA curricula). In the period 2007 – 2009 he was member of the Committee for Education and Certification of Accountants Czech Republic and Executive Board member of the Chamber of Certified Accountants (Union of Accountants CR). From 2011 he is President of Chamber of Certified Accountants Czech Republic and member of Accreditation Committee of this professional organization.
He is reputed academician and practitioner; he published more than 400 research outputs, from which could be stated 25 monographers in the area of accounting and corporate finance, more than 40 research papers published in reputed databases (ISI, SCOPUS – important piece of them in WSEAS/NAUN research journals). His SCOPUS H-index is 7 and his Google Scholar H-index is 10. His major is corporate financial reporting, partially focused on international accounting harmonization and financial securities reporting.
He was a plenary speaker of DEEE 2010 conference in Tenerife, E-ACTIVITIES 2011 conference in Jakarta, and conferences in Harvard (ICBA 2012) and Cambridge (EDUCATION 2012). Also did organized special sessions focused on measurement issues in finance and accounting at WSEAS conferences in Timisoara (EMT 2010), Iasi (AEBD 2011), Angers (EMT 2011), Harvard (ICBA 2012), Porto (AEBD 2012) and Zlin (FAA 2012). He was a chair of Zlin conferences which were held in September 2012 at Tomas Bata University in Zlin, Czech Republic.