Incorporating tacit knowledge in performance measurement system in a Sri Lankan hotel

Abstract

Performance Measurement (PM) has been received an increasing attention over the past 20 years in the hotel industry. It is critical for the development of strategic plans and for evaluating the achievement of organisational objectives. A growing understanding of the limitations of financial measures has led the development of integrated systems and frameworks. Among the conventional models, Balanced Scorecard (BSC) is widely accepted and implemented in organisations. However, identification of Critical Success Factors (CSFs) and formation of BSC model into a practical context is based on several assumptions that could lead to failures. Tacit knowledge addresses the value of the expert’s knowledge and specifies techniques to capture current context and changing needs of the organisation. However, the extent of literature on PM has failed to incorporate tacit knowledge into the PM models using any of the externalisation techniques due to several reasons. Therefore, this study explored the method to incorporate expert’s tacit knowledge for PM in the Sri Lankan hotel industry. The research problem was approached through a single case study with an action research phase in a five star hotel that successfully practice Performance Measurement System (PMS) in Sri Lanka. Semi-structured interviews were conducted among the experts in the hotel and combined three methods namely; archival analysis, ethnographic analysis and experts’ participation to extract expert’s knowledge in to CSFs identification process. The case study findings revealed that hotel staff subconsciously carries out activities for externalising, preserving and developing their tacit knowledge. However, there is no evidence of considering tacit knowledge in the process of CSFs identification for PM in Sri Lankan hotel industry. Action research phase affirmed, at minimum, either the ethnographic or the interactive method could be used along with archival analysis method to represent both the explicit and tacit knowledge of the organisation to produce an effective PMS. The approach used in this study for incorporating tacit knowledge into performance measurement is adaptable to Sri Lankan hotel industry.