Academics and professionals have paid attention mainly to performance measurement systems that have implemented financial and non financial measures. However, the majority of previous studies were conducted in developed countries, but very little had been carried out in developing countries. Therefore, this study aims to investigate performance measurement systems in developing countries in twofold. Firstly, examine the existing uses of financial and non financial measures in Libyan banking industry and, secondly, analyze the contextual factors that may affect the use of these measures. In order to fulfill this study's aim managers from top and middle managerial levels have participated to the survey. Data were collected through a series of quantitative and qualitative approaches while obtained data were analyzed by employing numerous statistical methodologies. The study findings indicate that most of the Libyan banks use a mixture of performance measurement systems that include a combination of financial and nonfinancial measures. However, the Libyan banks are still relying on more financial measures than non financial measures as important information used for various purposes. In addition, several contextual factors represent the core of the study and they are of great importance for the use of performance measures according to banks' size within the banking industry in Libya. This study contributes to bridge the gap in the literature of performance measurement by providing theoretical and empirical evidences of how performance measures could be used more proficiently in developing countries. Furthermore, the study's findings offer an overview of the performance measures used currently in Libyan banking industry and suggest the implementation of the outcome of this study that will instigate important improvements to the current performance measurement systems.