The Application of Performance Measurement Systems at the Electricity Sector of Lithuania

Linas Jasiukevicius, Ceslovas Christauskas

Abstract


This article presents the results of the empiricalresearch performed in Lithuanian grand electricitycompanies in order to reveal the application of performancemeasurement systems (PMSs) at the electricity sector.The relevance of the performance measurement at theelectricity sector is determined by starting the process ofgradual electricity market liberalization which changesperformance conditions of companies operating in thissector. Scientific literature within the context of the analysisof such processes impact on the performance measurementand PMS in this sector is poor and fragmentary. This paperis the first one in which it is analyzed the performancemeasurement in Lithuanian electricity companies.Theoretical background of the research is based on theassumptions that the changing environment of anorganizational the performance has a direct impact on thechanges of performance measurement which, in its turn,are realized in close connection with the projects on reorganizingPMS (Ponikvar, Tajnikar and Pushnik, 2009;Gimzauskiene and Valanciene, 2009; Gimzauskiene andKloviene, 2010). According to this approach, theappropriate changes in electricity market allow to presumeby increasing the importance of the evaluation of nonfinancialindicators, herewith and the relevance of theapplication of modern PMSs.Following these presumptions, the features of theperformance measurement and changes of PMS due toelectricity market liberalization were analyzed. The researchwas performed in free types of electricity companies in orderto explore the specification of performance measurement andthe impact of market liberalization on it in different types ofcompanies. In total four Lithuanian grand electricitycompanies were researched which were selected by handilyselection method.The main results disclosed that due to short timeelectricity market liberalization still has not hadconsiderable impact on the performance measurement ofcompanies. Traditional attitude to performance measurementmostly based on financial indicators and traditionalfunctions of performance measurement was dominant.However, the research revealed that the importance of nonfinancialindicators was growing. These changes weremostly related with the increasing relevance of themeasurement of strategy implementation, customers andother stakeholder satisfaction and workers evaluation.Together with the indicators of these ranges it wasenvisaged the increasing relevance of the application ofmodern PMSs, especially in the company of electricitygeneration. The research disclosed that the increasingcompetition between independent suppliers graduallyincreased the importance of a competitive strategyformation and the measurement of non-financialindicators. Therefore, in this company the application ofmodern PMS as the means of strategy implementation wasforeseen more relevant in comparison with other types ofelectricity companies.


Keywords


electricity sector, electricity market liberalization, features of performance measurement, performance measurement system, strategic management.

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Print ISSN: 1392-2785
Online ISSN: 2029-5839