During the past decades, the competition for many businesses has moved from just being based on price to include such factors as: quality, service innovation and flexibility. Managers keep track of the performance on such factors by means of performance measurement. This process is a way of measuring how well the organization carries its strategies and objectives into effect. Since the environment has changed and strategies have changed with it, many companies need to redesign their existing performance measurement systems with respect to the objectives they follow today.
This thesis is carried out at DHL Solutions in Sweden and aims at improving their current view on performance measurement, their performance measurement system and instituted individual measures by conceptualizing the existing theories on the subject and adjusting them to fit the situation in the organization. The most fundamental recommendation on the subject presented in the literature is that performance measures should be directly derived from the current strategies followed. Also, the entity of individual measures should be integrated in a balanced system where managers monitor multiple dimensions of performance simultaneously. These two recommendations are the underlying principles of this thesis.
To overcome flaws in the present performance measurement process, this thesis puts forward four recommendations for DHL Solutions to follow in order for them to improve this whole process. Recommendations one and two argue that they should integrate a systematic process for strategic management in their organization where strategies and objectives are formulated and translated into operationally relevant actions (including a tailored measurement package for tracking the progress of the selected strategies). The third recommendation states that DHL Solutions in Sweden should use the so called performance pyramid as a framework for the integration of performance measures in a balanced system. Finally, the fourth recommendation states that they should make use of the performance measure record sheet as a means to ensure that all instituted as well as new individual measures are relevant and well-designed.
Author: Stefenson,Tomas
Source: Luleå University of Technology
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