The current trend in industry to move towards team-based organisational structures has resulted in an increased interest to seek innovative ways for managing team performance. In that sense, team performance measurement has been recognised as an effective management practice. This research departs from an industrial problem identified while working on a number of projects with industry - i. e. lack of understanding of how to design effective team-based performance measurement systems. The overall goal is to create a better understanding of the design of effective team-based performance measurement systems (TPMS). In particular, its aim is to gain new insights into (1) the process for designing effective TPMS and (2) the factors that enable and/or constrain the design of effective TPMS. An effective TPMS is defined here as a performance measurement system that enables the team to increase its contribution to the business and at the same time motivates and develops the team and its individuals. This study falls into the empirical and applied research category because it focuses on an industrial problem and provides a solution through continuous collaboration with industry. The following is the most significant contribution of this research: (1) A typology for TPMS design that describes the characteristics of a comprehensive process for designing TPMS. (2) The identification and description of ten factors that enable and/or constrain the development of effective TPMS. (3) A practical construct to enable industrial organisations to design effective TPMS. The quality of the research was ensured by defining the evaluation criteria and the specific research tactics early in the process. These criteria and tactics guided all the activities carried out during this study. This thesis will be of interest to managers, team leaders and indeed anyone who works in a team. Researchers working in the fields of performance measurement and team management will also benefit from this research.