Delivering the goods at TNT: the role of the performance measurement system |
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Authors: | Philip Moon Lin Fitzgerald |
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Institution: | aSchool of Business and Economic Studies, University of Leeds, Blenheim Terrace, Leeds, U.K., LS2 9JT;bWarwick Business School |
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Abstract: | This paper explores the characteristics of the performance measurement system atTNT (UK) Ltd.which facilitate the translation of strategy into action.TNTis a successful and growing service organization and a market leader in the overnight distribution of parcels within the U.K. The performance measurement system and how it is used atTNTare described in detail. The authors then draw on the management accounting literature to provide an analysis framework which answers three central questions for performance measurement systems: whatdimensionsof performance to measure, how to setstandardsfor those measures and whatrewardsare to be associated with the achievement of those standards. The performance measurement system atTNTis appraised against this framework. AtTNTthere are five properties of the performance measurement system which have facilitated the translating of strategy into action. Three of these relate to the framework above; the company measures the right things in that dimensions are consistent with corporate strategy, it provides standards for performance through internal benchmarking, and adopts a mixture of financial and non-financial based rewards. In addition, however, there are two further properties of the system; the use of league tables to report the relative performance of the depots, and the presence of a strong corporate champion who drives the message and importance of the performance measurement system from the centre to the depots. |
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Keywords: | internal benchmarking rewards league tables corporate champion dimensions standards |
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