The role of performance management in the enhancement of desired employee outcomes

Van Rooyen, Karina (2007-03)

Thesis (MEcon (Industrial Psychology))--University of Stellenbosch, 2007.


Over the past decade we have seen an emerging consensus on the importance of performance management as the mechanism to improve the contribution of individual employees to the overall success of the organisation. The predicament, however, is that performance management efforts often appear to be perceived to lack relevance, to constitute a waste of time or perceived to be faddism. To address possible scepticism and the need for greater prioritisation, answers must be found on the extent to which performance management enhance those attitudes and employee responses that underpin work performance. The main purpose of this research study was to empirically examine the relationship between performance management practices (i.e. providing employees with context, focus, resources, development, monitoring/feedback, and consequences) and the achievement of specific desired employee outcomes (i.e. employee job satisfaction, intention to quit, perception of fairness, organisational commitment, employee empowerment, and team cohesion). For the purpose of this study a theoretical model (Shirley, 2005) depicting the relationship between performance management practices and desired employee outcomes has been empirically tested. The sample (n = 1016) consisted of employees working in the financial services sector in South Africa. The data was acquired through the High Performance Practices Survey (Shirley, 2004), which measured employee perceptions regarding the extent to which the performance management practices were implemented within their operational unit; and the extent to which they experienced the above mentioned attitudes or responses. The results of the reliability analyses revealed Cronbach’s alpha values ranging between 0.68 and 0.93 on nine sub-scales. After being subjected to exploratory factor analysis which was conducted by means of the Principal Component extraction method, five of the sub-scales satisfied the uni-dimensionality test whilst the remaining four presented a clear, relatively easy interpretable two-factor orthogonal factor structure. Despite certain shortcomings, the reliability and construct validity analyses seemed promising, thereby enhancing the usability of the High Performance Practices Survey (Shirley, 2004) for future research and commercial use purposes. The statistical analysis of the data was conducted through correlation and regression analyses. The results corroborated the hypotheses that performance management practices correlate positively with job satisfaction, perceptions of fairness, organisational commitment, employee empowerment and team cohesion. Surprisingly, no convincing empirical support could be found for the hypothesised relationship between the management practices and intention to quit. The findings of regression analysis supported that all the desired employee outcomes could each be significantly predicted by at least three performance management practices. Important insight was gained into the relative importance of the performance management practices to promote desired employee outcomes. In view thereof that a discussion of performance in organisations is incomplete without reference to the construct of organisational culture, this study also provided propositions to prompt further research on the role of performance management in reinforcing a high performance organisational culture. Insightful conclusions were drawn from the results obtained and recommendations are made for future research.

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