After the glorious ascent of the Balanced Scorecard in the 80's, Neely, Adams and Kennerley developed in 2002 the Performance Prism as follower system of the Balanced Scorecard. The Performance Prism as a "second generation performance measurement system" claimed to adapt the advantages of the first generation systems but correct their shortcomings. The Performance Prism has the advantages of a multiple stakeholder recognition as well as a explicit strategy dimension. But Neely, Adams and Kennerley did not explain much how the Performance Prism can be applied to a single company department. This work tries to add value to the existing literature by the development of an departmental approach for the Performance Prism as well as an detailed way how to develop the departmental scorecard.
Table of Contents
1 INTRODUCTION
1.1 OUTCOME‐ VS. BEHAVIOR‐BASED PERFORMANCE CONTROL
1.2 COMBINED SYSTEMS
1.3 PURPOSE OF THE THESIS
1.4 METHODOLOGY OF THE WORK
2 THE PRINCIPAL‐AGENT APPROACH AS EXPLANATION FOR PERFORMANCE EVALUATION
2.1 THE COMPANY AS THE PRINCIPLE
2.2 THE SALESMAN AS THE AGENT
2.3 SUMMARY OF THE CHAPTER
3 INCENTIVE SYSTEMS AS A POTENTIAL SOLUTION TO THE CONTROL PROBLEM
3.1 DEFINITIONS
3.2 OUTCOME‐BASED VERSUS BEHAVIOR‐BASED CONTROL SYSTEMS
3.3 EVALUATION OF THE CONTROL APPROACHES
3.4 CRITERIA CATALOGUE
3.5 SUMMARY OF THE CHAPTER
4 THE BALANCED SCORECARD AS FIRST APPROACH
4.1 PERSPECTIVES OF THE BALANCED SCORECARD
4.2 EVALUATION OF THE BALANCED SCORECARD
4.3 SUBOPTIMAL POINTS IN THE BALANCED SCORECARD
4.4 SUMMARY OF THE CHAPTER
5 NEELY’S PERFORMANCE PRISM
5.1 PERSPECTIVES OF THE PERFORMANCE PRISM
5.2 TOOLS AND ELEMENTS OF THE PERFORMANCE PRISM
5.3 EVALUATION OF THE PERFORMANCE PRISM
5.4 SUBOPTIMAL POINTS OF THE PERFORMANCE PRISM
5.5 SUMMARY OF THE CHAPTER
6 IMPROVEMENT OF THE PERFORMANCE PRISM
6.1 COMBINATION OF THE STRATEGY VIEW BETWEEN THE BALANCED SCORECARD AND THE PERFORMANCE PRISM
6.2 DESIGN OF AN DEPARTMENT PRISM SCORECARD APPROACH
6.3 SUMMARY OF THE CHAPTER
7 THEORETICAL IMPLEMENTATION OF THE STAKEHOLDER LEVEL DESIGN PHASE OF THE PERFORMANCE PRISM
7.1 NEED FOR AN INTEGRATED DERIVATION APPROACH FOR THE PERFORMANCE PRISM
7.2 DEVELOPMENT OF AN INTEGRATED AND DETAILED DEVELOPMENT METHOD FOR THE STAKEHOLDER LEVEL DESIGN PHASE
7.3 SUMMARY OF THE CHAPTER
8 IMPROVEMENT OF THE SIMPLE PERFORMANCE EVALUATION TOOL
8.1 APPROACHES FOR PERFORMANCE EVALUATION
8.2 SUMMARY OF THE CHAPTER
9 SYNTHESIS OF THE MULTIDIMENSIONAL APPROACH WITH THE PERFORMANCE PRISM
9.1 STEPS OF THE COMBINATION OF PERFORMANCE EVALUATION WITH THE PERFORMANCE PRISM
9.2 SUMMARY OF THE CHAPTER
10 SUMMARY
11 CRITICAL REVIEW OF THE THESIS
11.1 VALUE ADD OF THE PREVIOUS WORK
11.2 ISSUES NOT ANSWERED YET
Research Objectives and Thematic Scope
This thesis aims to enhance existing literature by integrating performance measurement systems with performance evaluation models, specifically tailored for a departmental level. The primary research objective is to bridge the gap between corporate-level strategy frameworks, such as the Performance Prism, and the practical requirement of evaluating individual employee performance within a sales department.
- The Principal-Agent approach as a foundation for performance control.
- Comparative analysis of the Balanced Scorecard and Neely's Performance Prism.
- Development of a departmental prism scorecard approach.
- Integrated methodology for stakeholder identification and need assessment.
- Synthesis of a multidimensional performance evaluation tool linked to corporate strategy.
Excerpt from the Book
1.1 Outcome- vs. Behavior-Based Performance Control
Total quality management itself became “standard” with the years and did no longer provide a basis for a competitive edge (Butz and Goodstein, 1996). So with the time, new fields had to be explored for gaining competitive advantage. In 1997, Woodruff advocated the “customer value” as future competitive advantage. Maybe based on Porter’s researches in differentiation (Porter, 1980), Woodruff conceptualized a framework, which tries to deliver customer- / buyer value to gain and hold competitive advantage (Woodruff, 1997). Synergizing the definitions of various authors, Woodruff defined customer value as:
“A customer’s perceived preference for and evaluation of those attributes, attribute performances and consequences arising from use that facilitate (or block) achieving the customer’s goals and purposes in use situations” (Woodruff, 1997)
In his implications for future research he referred to Garver and Gardial (1996) who found out that at that time not much was known about the role of salespeople in delivering value to customers. Woodruff mainly mentioned two approaches of performance evaluation of the sales people: outcome- and behavior-based control (Woodruff, 1997). Based on the analysis of the characteristics of the sales force, he tried to derive the adequate system for performance evaluation. He found out that both have advantages and disadvantages for the sales department.
Summary of Chapters
1 INTRODUCTION: Outlines the historical transition from push-driven industry to customer-centric markets and introduces the core concepts of performance control for the sales department.
2 THE PRINCIPAL-AGENT APPROACH AS EXPLANATION FOR PERFORMANCE EVALUATION: Applies agency theory to explain the inherent goal conflicts between a company and its employees, justifying the need for structured performance evaluation.
3 INCENTIVE SYSTEMS AS A POTENTIAL SOLUTION TO THE CONTROL PROBLEM: Defines the components of incentive systems and compares outcome-based versus behavior-based control mechanisms.
4 THE BALANCED SCORECARD AS FIRST APPROACH: Analyzes Kaplan and Norton's Balanced Scorecard, detailing its perspectives and evaluating its applicability to sales department needs.
5 NEELY’S PERFORMANCE PRISM: Introduces the Performance Prism as a holistic, stakeholder-oriented successor to the Balanced Scorecard and explains its five core perspectives.
6 IMPROVEMENT OF THE PERFORMANCE PRISM: Proposes improvements to the Performance Prism by integrating corporate strategy and introducing a departmental prism approach.
7 THEORETICAL IMPLEMENTATION OF THE STAKEHOLDER LEVEL DESIGN PHASE OF THE PERFORMANCE PRISM: Details a procedural method for identifying stakeholders and assessing their needs at a departmental level.
8 IMPROVEMENT OF THE SIMPLE PERFORMANCE EVALUATION TOOL: Refines performance evaluation by moving from simple structures to multidimensional, weighted models that align with the Performance Prism.
9 SYNTHESIS OF THE MULTIDIMENSIONAL APPROACH WITH THE PERFORMANCE PRISM: Provides a practical, step-by-step example of combining the Performance Prism with performance evaluation in a sales department context.
10 SUMMARY: Consolidates the research findings and reiterates the value-add of combining strategy, stakeholder orientation, and performance measurement.
11 CRITICAL REVIEW OF THE THESIS: Evaluates the research contributions and identifies open issues for future academic inquiry.
Keywords
Performance Prism, Balanced Scorecard, Sales Department, Performance Evaluation, Principal-Agent Theory, Incentive Systems, Stakeholder Analysis, Customer Value, Strategy Alignment, Key Performance Indicators, Multidimensional Approach, Stakeholder Matrix, Departmental Scorecard, Remuneration, Corporate Strategy.
Frequently Asked Questions
What is the core focus of this thesis?
This work focuses on improving the Performance Prism by extending it to a departmental level and combining it with a multidimensional performance evaluation tool, specifically applied to the sales department.
What are the central themes of the research?
The central themes include the intersection of agency theory, incentive systems, strategic performance frameworks (Balanced Scorecard and Performance Prism), and the practical implementation of performance metrics for sales teams.
What is the primary research goal?
The primary goal is to address existing shortcomings in current literature regarding how performance measurement systems can be broken down to departmental levels and linked directly to employee remuneration.
Which scientific methodology is utilized?
The work employs a theoretical, analytical, and construction-based methodology, utilizing literature reviews, conceptual improvements to existing management frameworks, and a practical simulation case study.
What is covered in the main section of the work?
The main section covers the conceptual foundations (Principal-Agent), critical evaluations of the Balanced Scorecard and Performance Prism, a detailed derivation process for stakeholder-level design, and the technical development of multidimensional evaluation tables.
Which key terms describe this work best?
Key terms include Performance Prism, Sales Department, Performance Evaluation, Incentive Systems, Stakeholder Matrix, and Strategy Alignment.
How does the author propose to integrate corporate strategy into the Performance Prism?
The author suggests defining corporate strategy prior to stakeholder identification, ensuring that stakeholder needs and subsequently performance metrics are directly derived from the company’s strategic goals.
Why is the "Stakeholder Matrix" considered a significant contribution?
The matrix allows for the identification of both external and internal stakeholders, enabling departments to manage mutual interdependencies and creating a more holistic performance evaluation structure.
How is the performance evaluation tool improved in this thesis?
It is improved by transitioning from simple, equally weighted criteria to a multidimensional, weighted approach that reflects stakeholder importance and allows for the cascading of strategy into specific departmental metrics.
- Arbeit zitieren
- Erik Sebastian Wödl (Autor:in), 2013, Improvement of the Performance Prism and Combination with Performance Evaluation, München, GRIN Verlag, https://www.hausarbeiten.de/document/212600
