Performance management system (PMS) in Indian small and medium enterprises (SMEs): A practical framework - A case study

Abstract

Small and Medium enterprises (SMEs) play a crucial role in India's economic growth. SMEs operate in a competitive environment and therefore, it is important to ensure that their business is managed more efficiently and effectively. It is believed that performance management framework can help to identify weaknesses, clarify objectives, strategies and improve the process of performance management in SMEs. This study puts forward the Performance Management and Control (PMC) framework (Ferreira, A., and Otley, D. 2005, 2009) as a research tool to test the Performance management system in India's Small and medium enterprises, engaged in manufacturing activities. Some studies reveal that there is no proper/formal process of PMS adopted in some enterprises, but our findings suggest existence of well-established PMS. A case study approach was adopted where in PMS of an SME engaged in manufacturing activity was captured. In-depth interviews were held with the managers (top level and middle level) and information was sought about the existence of PMS at their unit. Literature review helped to identify the existence of the framework (Ferreira, A., and Otley, D. 2005, 2009), this framework was taken/identified as tool to test whether the same works in the PMS of the unit under study. This paper is based on the findings from analysing single manufacturing unit in Goa (India). This paper is useful for both researchers and practitioners because it explores and identify the factors in the use of performance management systems area in the Indian SMEs context.