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Summary articles 1JM21 Designing effective performance management systems
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1JM21 Design of Effective Performance Management Systems –Summary Articles
Content
Week 1 .................................................................................................................................................................................. 2
❖ Building a Practically Useful Theory of Goal Setting and Task Motivation – Locke, Latham (2002) ....................... 2
Week 2 .................................................................................................................................................................................. 6
❖ Feedback Effectiveness: Can 360-degree Appraisals be Improved? – DeNisi, Kluger (2000) ................................. 6
❖ Could do better? Assessing what works in performance management – Research report CIPD (2016) .............. 11
❖ Performance Management in Healthcare: Performance Indicator Development Task Uncertainty, and Types of
Performance Indicators – Geer, Tuijl, Rutte (2009) [10] ................................................................................................ 15
❖ Participation in the Design of Performance Management Systems: a Quasi-Experimental Field Study – Kleingeld,
Tuijl, Algera (2004) [21] .................................................................................................................................................. 17
❖ Improving Organizational Performance with the ProMES: an International Collaboration – Pritchard, Holling,
Lammers, Clark (2002) ................................................................................................................................................... 19
Week 3 ................................................................................................................................................................................ 23
❖ Complex Interdependence in Task-Performing Groups – Saavedra, Earley, Van Dyne (1993) [12] ..................... 23
❖ A Multiple-Goal, Multilevel Model of Feedback Effects on the Regulation of Individual and Team Performance –
DeShon, Kozlowski, Schmidt, Milner, Wiechmann (2004) [22] ...................................................................................... 27
❖ Innovation in the Frontline: Exploring the Relationship between Role Conflict, Ideas for Improvement, and
Employee Service Performance – Schepers, Nijssen, Heijden (2016) [21] ..................................................................... 31
❖ Task and Aggregation Issues in the Analysis and Assessment of Team Performance – Paul Tesluk, John Mathieu,
Stephen Zaccaro, Michelle Marks (1997) [15]................................................................................................................ 34
Week 4 ................................................................................................................................................................................ 40
❖ Competency and Individual Performance: Modelling the World of Work – Rainer Kurz, Dave Bartram (2002) [7]
40
❖ Performance Evaluation and Pay for Performance – Rynes, Gerhart, Parks (2005) [33] ..................................... 43
❖ Mixing Individual Incentives and Group Incentives: Best of Both Worlds or Social Dilemma? – Barnes, Hollenbeck,
Jundt, DeRue, Harmon (2010) [26]................................................................................................................................. 50
❖ Managing Employee Performance Design and Implementation in Organizations – Richard Williams (2002) [14]
52
Week 5 ................................................................................................................................................................................ 57
❖ Promise and Peril in Implementing Pay-for-Performance – Michael Beer & Mark D. Cannon (2004) [16] .......... 57
❖ Interdependence and Fit in Team Performance Management – Kleingeld, van Tuijl, Algera, Vijfeijken, Thierry
(2003) [18]...................................................................................................................................................................... 61
❖ Performance Measurement Frameworks: a Review – Neely, Kennerley and Adams (2007) [18] ........................ 64
Week 6 ................................................................................................................................................................................ 68
❖ Designing a Performance Measurement System: A Case Study – Lohman, Fortuin, Wouters (2004) [21] .......... 68
❖ The Balanced Scorecard – Measures that Drive Performance – Kaplan and Norton (1992) [22] ......................... 73
❖ Using the Balanced Scorecard as a Strategic Management System – Kaplan & Norton (1996) [29] .................... 75
1
,Week 1
❖ Building a Practically Useful Theory of Goal Setting and Task Motivation – Locke, Latham
(2002)
In the 1950s and 1960s, the study of motivation in North American psychology was not considered a
respectable pursuit. The filed was dominated by behaviorists. Introspection was considered not to be
a valid method of understanding human motivation.
Ryan (1970) argued that human behavior is affected by conscious purposes, plans, intentions, tasks
and the like. This are first-level explanatory concepts. Hence, conscious goals affect action. A goal is
the object or aim of an action.
Atkinson (1958) showed that task difficulty, measured as probability of task success, was related to
performance in a curvilinear, inverse function. Highest level of effort occurred when the task was
moderately difficult, lowest levels when the task was either very easy or very hard. He didn’t measure
personal performance goals/goal difficulty.
Articles findings:
❖ The highest or most difficult goals produced the highest levels of effort and performance;
❖ Specific, difficult goals consistently led to higher performance than urging people to do their
best. When people are asked to do their best, they do not do so, because do-your-best goals
have no external referent and thus are defined idiosyncratically. Goal specificity in itself does
not necessarily lead to high performance because specific goals vary in difficulty. Insofar
performance is fully controllable, goal specificity does reduce variation in performance by
reducing the ambiguity about what is to be attained;
Goal-setting theory appears to contradict valence-instrumentality-expectancy theory: the force to act
is a multiplicative combination of valence (anticipated satisfaction), instrumentality (belief that the
performance will lead to rewards), and expectancy (belief that effort will lead to the performance
needed to attain the rewards). By assumption goal level is held constant. Higher expectancies lead to
higher levels of performance.
Expectancy is linearly and positively related to performance. Expectancy of goal success is negatively
related to performance.
Social-cognitive theory. Self-efficacy (task-specific confidence) is measured by getting efficacy ratings
across a whole range of possible performance outcomes rather than from a single outcome. The
concept of self-efficacy is important in goal-setting theory because:
• When goals are self-set, people with high self-efficacy set higher goals than do people with
lower self-efficacy;
• People with high self-efficacy are more committed to assigned goals, find and use better task
strategies to attain the goals, and respond more positively to negative feedback.
Goals affect performance through four mechanisms:
1. Goals serve a directive function
They direct attention and effort toward goal-relevant activities and away from goal-irrelevant
activities both cognitively and behaviorally.
2. Goals have an energizing function
High goals lead to greater effort than low goals. For both physical effort, repeated
performance of simple cognitive tasks, subjective effort, and physiological indicators of effort.
3. Goals affect persistence
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, Faced with a difficult goal, it is possible to work faster and more intensely for a short period
or to work more slowly and less intensely for a long period.
4. Goals affect action indirectly by leading to the arousal, discovery, and/or use of task-relevant
knowledge and strategies
All action is the result of cognition and motivation, that can interact in complex ways.
Summary of what has been found in goal-setting research:
• When confronted with task goals, people automatically use the knowledge and skills they have
already acquired that are relevant to goal attainment;
• If the path to the goal is not a matter of using automatized skills, people draw from a
repertoire of skills that they have used previously in related contexts, and they apply them to
the present situation;
• If the task for which a goal is assigned is new to people, they will engage in deliberate planning
to develop strategies that will enable them to attain their goals;
• People with high self-efficacy are more likely than those with low self-efficacy to develop
effective task strategies;
• When people are confronted with a task that is complex for them, urging them to do their
best sometimes leads to better strategies than setting a specific difficult performance goal;
• When people are trained in the proper strategies, those given specific high-performance goals
are more likely to use those strategies than people given other types of goals; hence, their
performance improves. However, if the strategy used by the person is inappropriate, then a
difficult performance-outcome goal leads to worse performance than an easy goal.
The goal-performance relationship is strongest when people are committed to their goals.
Commitment is most important and relevant when goals are difficult. Categories of factors facilitating
goal commitment are:
1. Factors that make goal attainment important to people, including the importance of
outcomes that they expect as a result of working to attain a goal;;
2. Their belief that they can attain the goal.
Ways to convince people that goal attainment is important:
• Making a public commitment to the goal (matter of integrity);
• Leaders communicating an inspiring vision and behaving supportively. The supervisor’s
legitimate authority to assign goals creates demand characteristics.
When goal difficulty is held constant, performances of those with participatively set versus assigned
goals do not differ significantly. Erez & Kafner however found that from a motivational perspective,
an assigned goal is as effective as one that is set participatively provided that the purpose or rationale
for the goal is given.
The primary benefit of participation in decision making is cognitive rather than motivational in that it
stimulates information exchange. People who participated with others in formulating task strategies
performed significantly better and had higher self-efficacy than those who did not participate in
formulating strategies.
Monetary incentives are one practical outcome that can be used to enhance goal commitment.
However, there are important contingency factors:
1. Amount: more money gains more commitment;
2. Goals and incentive type interact.
Self-efficacy enhances goal commitment. Leaders can raise the self-efficacy of their subordinates:
3
, • By ensuring adequate training to increase mastery that provides success experiences;
• By role modeling or finding models with whom the person can identify;
• Through persuasive communication that expresses confidence that the person can attain the
goal.
Transformational leaders raise the efficacy of employees through inspiring messages to and cognitive
stimulation of subordinates.
For goals to be effective, people need summary feedback that reveals progress in relation to their
goals.
Control theory also emphasizes the importance of goal setting and feedback for motivation. The
assumptions that underlie control theory, however, are questionable. Motivation requires feed-
forward control in addition to feedback. After people attain the goal they have been pursuing, they
generally set a higher goal for themselves. This adoption of higher goals creates rather than reduces
motivation discrepancies to be mastered.
As the complexity of the task increases and higher level skills and strategies have yet to become
automatized, goal effects are dependent on the ability to discover appropriate task strategies. The
effect size for goal setting is smaller on complex than on simple tasks.
Because people use a greater variety of strategies on tasks that are complex than on tasks that are
easy, measures of task strategy often correlate more highly with performance than do measures of
goal difficulty.
When a specific difficult learning goal rather than a performance goal was set, consistent with goal-
setting theory, high goals led to significantly higher performance on a complex task than did the
general goal of urging people do their best.
In dynamic situations, it is important to actively search for feedback and react quickly to it to attain
the goal. Proximal goals can increase error management. It can yield information for people about
whether their picture of reality is aligned with what is required to attain their goal.
In conclusion, the moderators of goal effects:
• Goal commitment;
o Importance;
o Self-efficacy;
• Feedback;
• Task complexity.
Motivation hub, where the action is, consists of personal goals, including goal commitment and self-
efficacy. These variables are often the most immediate, conscious motivational determinants of
action.
Assigning a challenging goal alone raises self-efficacy because this is an implicit expression of
confidence by a leader that the employee can attain the goal. The mediating effect of self-set goals
and self-efficacy on monetary incentive effects is not supported by all studies. Self-efficacy is especially
critical when negative summary feedback is given because the person’s level of self-efficacy following
such feedback determines whether subsequent goals are raised or lowered.
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