Performance measurement system: attributes, effects and context in UK construction firms

Many organisations have adopted Performance Measurement Systems (PMS) to monitor their performance, assess the success of strategies, and/or assist the implementation of change programmes for continuous improvement. Performance measurement research has significantly evolved from developing conceptual frameworks (e.g. balanced scorecard) to rethinking and verifying the effects of PMS that is contextualised within the organisation. Inspite of significant evolution, PMS remains contentious conceptually and challenging for practitioners, especially in construction where theory and practice face contextual opportunities and constraints. While the approaches of key performance indicators (KPIs) and project performance benchmarks are predominating in construction research and practice, a systematic investigation of the conceptual basis of PMS is lacking in the construction context. This research examines the challenges for PMS theory and practice. Specifically, it aims to provide theoretical verification and convincing evidence pertaining to the extent to which key attributes of PMS lead to any positive effects in the construction context. By conducting a mixed methods research (i.e. a questionnaire survey and three case studies in UK construction firms), this study finds: three attributes are crucial for explicitly anatomising PMS - the nature, process quality and the use; all of them can separately lead to positive effects on sustaining project management and financial performance of construction firms, whereas PMS process quality plays a predominant role; both the nature of PMS and PMS process quality are the prerequisites of the extant use of PMS, which further improves system users' perceived effectiveness of PMS; and finally, both institutional and organisational contexts largely shape and affect the adoption of PMS (the nature and process quality in particular). This study primarily contributes to systematically explicating the conceptual basis and effectiveness of PMS in the construction context and thereby uncovering the black box of how PMS affects organisational performance in general.