Page 199 - DMGT514_MANAGEMENT_CONTROL_SYSTEMS

Management Control Systems

Notes Companies used the following methods to measure performance:
1. Measure of satisfaction after the services e.g. used questionnaire to ascertain the customer
perception of service quality.

2. Measures during the service e.g. management’s unannounced visits, use of ‘mystery
shoppers”.
3. Tangibles as surrogates for intangible e.g. measurement of waiting time and the conditions
of the waiting environments as surrogates of customers’ satisfaction with the service.
In developing an overall framework for a performance measurement system in the service
sector, there is need to conserve three basic questions, when forming the basic building blocks
of a performance measurement system:
1. What are the dimensions of performance that the organization is seeking to encourage?

2. How are the appropriate standards to be set?
3. What rewards and/or penalties are to be associated with the achievement of performance
targets?

Box 9.1: Dimesions of Performance Measurement

Dimensions of Performance Types of Measures
Results Competitiveness Relative market share and position
Sales growth
Measures of the customer base
Financial performance Profitability
Liquidity
Capital structure
Market ratios
Quality of service Reliability
Responsiveness
Aesthetic/appearance
Cleanliness/tidiness
Comfort
Determinants Friendliness
Communication
Courtesy
Competence
Access
Availability
Security
Flexibility Volume flexibility
Delivery speed flexibility
Specification flexibility
Resource utilization Productivity
Efficiency
Innovation Performance of the innovation process
Performance of individual innovations

Note:

1. Competitiveness and financial performance reflect the success of the chosen strategy (i.e., ends or results)
2. The remaining four dimensions: quality, flexibility, resource utilization and innovations are the drivers or dimensions
that determine competitive success.

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