Impact of performance indicators on organisations: a proposal for an evaluation model

This work aims at giving some guidelines to assess the impact of performance indicators on organisations. Performance measurement systems are usually introduced into organisations in order to monitor goal achievement, to allocate resources and to implement a strategy. However, the implementation of performance indicators may generate an alteration in the rational behaviour of the monitored structure. The risk of this impact is always present, and must be considered very carefully in order to preserve the organisation from a counter-productive effect. In the present analytical work, a reference model is proposed as a first step. This model considers all the organisational dimensions on which an indicator may exert its influence. The method makes use of the four Kaplan and Norton’s balanced scorecard perspectives in order to identify the dimensions on which an indicator may exert its impact. Previous works reported in scientific literature do not provide operational models for impact analysis, whereas, the proposed model is linked to an operative procedure in order to support management to make this analysis. The aim is to make the impact analysis less complex by structuring it in a sequence of predefined steps. The proposal is supported by some practical examples.