Methods of Performance Measurement in the SME Sector

Abstract

The issue of performance measurement has been of concern to researchers for a long time, and much work is being done on the topic. The aim of the present study was to explore the most common performance indicators in the literature and to study the measurement methods. As themanuscript is part of a broader body of research, we have focused on performance indicators for those used in social science research among SMEs, such as examining the impact of leadership style, entrepreneurial skills, and change management habits on an organization’s overall performance.There are several groupings of indicators, one of the most common being the separation of financial and non-financial indicators. The latter is used primarily by large corporations, but they also do so only with the use of financial indicators. Based on extensive literature review, performance and turnover (sales revenue) indicators were the most common in terms of financial indicators, and customer and employee satisfaction indicators were the most common in the case of non-financial cases. Financial indicators are typically used in the study of SMEs, within which researchersdistinguish between objective and subjective measurement methods. Lenses are made according to the same accounting rules, but they can be manipulated due to taxation and also make industry comparisons difficult, so the subjective possibility of measuring performance, which can eliminate these disadvantages, has been explored for decades. New measurement methods have been developed and applied in empirical research. Their disadvantage is that we can only access the data through questioning, but based on studies with statistical methods, they show high correlation values with objective methods, they can be considered equivalent, so subjective approaches can be safely applied in research. Manuscripts from the 2010s mention further empirical testing of subjective measurement questionnaires as a further research proposal in order to make the most reliable measurements possible by eliminating the accounting and industry specificities mentioned above.