The purpose of this paper is to demonstrate how a systems approach can be used to facilitate the development of an organizational performance measurement system.
Based on a review of the literature, the paper introduces the implications for applying a systems approach to organizational performance measurement. To demonstrate the transition from theory to practice, a case study is provided to show how a sustainable development performance measurement system was developed at a Canadian electric utility. The case study involved extensive consultation with over 25 experts.
The paper finds that a systems approach is useful in developing the process and that a set of formal systems criteria is useful in developing the structure and content of a performance measurement system. These concepts are highlighted throughout the case study example.
The case study section was based on findings from a single organization. Further work is required to validate the findings within other organizations.
The paper shows how a robust sustainable development performance measurement system may be developed at an electric utility. The overarching emphasis on integration of the system with the case utility's mainstream initiatives demonstrates that a performance measurement system must build on what the organization already has in place. The systems‐based approach and formal systems criteria used in the paper may be transferable to other organizations.
The paper shows that a systems approach provides both the structure and flexibility needed to guide the design, implementation, and evolution of a sustainable development performance measurement system within existing organizational infrastructure.
