The use of performance measurement in strategy implementation: a study into the service sector

Abstract

The purpose of this study is to examine to what extent the results of performance measurement are used in strategy implementation. In order to put forth this relation, seven establishments operating in hospitality field were interviewed and data were gathered by examining documents. As the result of the study it was found out that indicators of financial performance were used in performance measurement; and that costumer dimension and employer dimension, which are among the non-financial indicators, were used to a great extent. Only two of the establishments had self-devised measurement models and these two implement performance measurement periodically in order to develop a strategy. The results of the measurements are used in strategy implementation by the establishments. However, it was found out tat the establishments do not adopt a participative setting in preparing the report of the results of the measurement and encouraging all the employees from all departments. What's more, department managers do not discuss the results of the performance measurements and do not take an inquisitive stance towards the reasons behind the results. The results of the study showed that chain establishments apply performance measurements systematically and properly. The managers of these establishments state that they have to apply performance measurements as a part of the firm's strategy. In other words, performance measurement is an obligatory task.