Purpose The purpose of this paper is to examine how a performance measurement system (PMS) can be designed for small- and medium-sized enterprises (SMEs) operating in a turbulent environment. The current models and frameworks for the design and implementation of a PMS are for large companies; these traditional design and implementation processes are too multi-stage and long term for SMEs operating in a rapidly changing environment.

Design/methodology/approach The study constructs a conceptual framework based on the performance measurement and management literature and empirical evidence from a longitudinal case study. Interviews, an analysis of strategic documents and documentation of the prevailing measurement system were conducted.

Findings The study results reveal the framework for a flexible PMS design. In the framework, the PMS consists of core permanent measures that control the profitability of the company and supportive measures of the realisation of strategic targets. The supportive measures change and develop along with the strategy.

Originality/value The study provides new understanding about the performance measurement design process in SMEs operating in a turbulent environment. The existing literature presents performance measurement design and implementation process models for large organisations, but these frameworks are too multi-stage and long term for SMEs.