Improving performance measurement practices in construction organisations

Performance measurement (PM) is being practised by a variety of construction organisations and many are aware of its importance to them. It is necessary for organisations intending to extend businesses locally or globally and as an important ingredient for the strategy development process. The paper contributes to a growing body of knowledge on PM and describes a maturity model to help organisations to structure and organise the PM practices. In particular, it explores the importance of PM and potential tools such as the Balanced Scorecard (BSC) and the European Foundation for Quality Management (EFQM) Excellence Model. These two tools are widely known and the most used in all sectors including construction to measure organisations’ performance. This paper focuses on current PM practices in two countries, UK and Malaysia. Information on knowledge and understanding of PM, PM processes, criteria, tools and models used and challenges in implementing PM was gathered using semi-structured interviews with twelve large construction organisations. The purpose of interviews was to seek the organisations’ views on how they approach and conduct PM and derive benefits from it. Results indicate that organisations understand what they can gain from implementing PM. It is being practised in organisations to help improve business and gain more profits. Involvement of all staff, managerial level to bottom level, is important either directly or indirectly in the PM process. Furthermore, all organisations agreed that the appropriate use of tools and models to measure performance simplifies the process and indicates how organisations can move in future. Financial and non-financial aspects are evaluated and measured for assessing organisations’ performance. However, PM for organisations remains a challenge. It is seen that organisations face difficulties not only in understanding the PM process but also where appropriate data for measuring performance can be sourced. A critical analysis of the literature reviewed and the interview results lead to ways of helping organisations to target relevant performance measures, based on their maturity level.