Improving the Measurement of a Company’s Performance Effectiveness

In a constantly changing business environment, the company’s management faces new challenges, and the complexity of management increases. In this regard, since the end of the 1980^th, after a criticism wave of traditional (financial) methods, performance measurement systems (PMS) have come to the fore, offering ideas and technologies based on a combination of both, financial and non-financial indicators, which are focused on the strategic line of a company.

The purpose of this academic paper is to develop new PMS that combine existing systems’ advantages, as well as eliminating their inherent limitations.

Therefore, in the course of the study, the main limitations of existing performance measurement systems were identified, and a new PMS was proposed, which had a number of advantages over the known ones. This system is focused on maximizing the company’s value, describes contribution to the change in the value of each main business process, product and client, which allows one to get away from aggregation and evaluate performance at each level, as well as turn a set of useful, but somewhat heterogeneous indicators into a system with a clear target.

This PMS is based on the concepts of value-based management (Value Based Management, VBM), strategic management (Strategic Management, SA), process management (Business Process Management, BPM), as well as on the provisions of the performance management concept (Performance Management, PM).

The developed performance measurement system is purposefully based on well-known categories and indicators to increase its practical significance. This PMS will help management to understand what the business is made of, what processes affect the efficiency of its work within the company. After all,  the expediency of an adequate performance measurement for the successful functioning of the company in modern conditions is very significant, since it can help management both, to achieve the desired results and also to see the reserves for improving efficiency.

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