Abstract

The study explored the performance measurement practices (PMS) of micro, small, and medium enterprises (MSMEs) in Central Luzon, Philippines, through the use of the managerial framework adopted in Deming’s plan-do-check-act (PDCA) model and the use of key performance indicators. The respondents were the 109 managers or owners of MSMEs in the urban areas of six provinces in Central Luzon (Pampanga, Tarlac, Bataan, Bulacan, Nueva Ecija, and Aurora), identified through purposive sampling. Referrals were obtained from Department of Trade and Industry. Results revealed that the MSMEs differed in their managerial practices of the PMS variables based on category of enterprise. It was also noted that most medium-sized enterprises practiced all the PMS variables, while the least to practice were the micro enterprises. Out of the twenty key performance indicators (KPIs), only eight were utilized by the enterprises. Most of these KPIs were financial measures (sales, cashflow, and profit), as main indicators to measure business performance. These findings led to a management capability building model for MSMEs to assist them in the adoption of PMS.