Employee reactions to performance standards: A review and research propositions

BOBKO, P. & COLLELA, A. (1994). Employee reactions to performance standards: A review and research propositions. Personnel Psychology, vol. 47, p. 1-29.

Performance standards should not replace other management tools but used in addition to foster job satisfaction and motivation, or at least, to help avoid dissatisfaction and low motivation.

An individual’s acceptance of external standards can happen through:

  • A congruence of individual and organizational values
  • An exchange of work for reward
  • Perceived affiliation with the organization

Defining standards

  1. They have an evaluative component
  2. Criteria established externally and imposed on an individual’s work task
  3. As established entities, they remain somewhat stable over time and individuals.

Locke and Latham (1990) suggest:

Goals
The aim or end of an action

Standards
A rule to measure or evaluate things

Goals are determined on an individual basis and standards are usually considered as constant across individuals and determined by organizational criteria.

Review of related litteratures

Goal setting

Relevant as performance standards have motivating potential. An individual’s personal goals are an immediate regulator of his or her actions (Locke and Latham, 1990).

Locke and Latham (1990) suggest:

  1. Those who work toward difficult, specific goals perform better than those who work toward easy, vague, or no goals
  2. Performance tends to increase monotonically with goal difficulty

Goal setting has a positive effect on performance through:

  • Behavioral direction
  • Effort
  • Persistence
  • Task-specific strategies

Externally defined standards must be translated by individuals into personal goals that are specific and difficult.

Assigned goals are either translated into personal goals or rejected.

If an organization uses standards as a way to increase performance, then they must be sufficiently difficult and specific and conditions must exist to lead to commitment.

Factors increasing commitment to assigned goals

  • Goals are assigned by authority figures who:
    • are seen as legitimate
    • are physically present
    • are supportive
    • are trustworthy
    • exert reasonable pressure
    • Assigned goals which:
      • imply rewards and punishment
      • convey positive self-efficacy information
      • foster a sense of achievement
      • are challenging
      • have high instrumentality and valence
      • have a hig expectancy for success
      • do not conflict with other goals
      • are participatively set
      • are made for ego involving tasks
      • are intense

Participation in standard setting procedures by top management and employees should increase motivation (based on MBO).

To understand employee’s reactions, one should consider:

  • Difficulty
  • Specificity
  • Commitment
  • Participation

Feedback

Providing people with feedback about their performance will have a positive effect on their future performance.

Three factors to consider when setting standards

  1. Clarity of the standard
  2. How adequately information about the standard is disseminated
  3. How important the standard is likely to be to employees

Standards that are clear, descriptive and specific facilitate feedback and should produce more desirable responses.

Standards should be perceived as both difficult and rewarding.

If external standards are too easily attained and no reward is provided for exceeding them, it may lower individual’s internal standards and motivation (Janz, 1982; Taylor et al., 1984).

If standards are too difficult, subject may end up giving up (Carver and Scheier, 1981) or lower their own standards (Campion and Lord, 1982)

Performance expectations

Managers hold performance expectations about their employees, communicate and behave according to those expectations and thus create SFP (self-fulfilling prophecies) whereby employees conform to their managers’ performance expectactions.

Eden (1990) distinguishes:

  • Pygmalion effect (holding and acting on positive expectations increases performance)
  • Galatea effect (employee’s own positive expectations lead to high performance)
  • Golem effect (employer’s and employee’s negative expectations lead to poor performance)

Eden (1990) argues that difficult performance expectations lead to greater efforts than easy expectations. Expectations should be realistically difficult, where the realistic level is determined based on abilities.

The pygmalion effect allows employees to achieve success (Eden, 1990) and those “small wins” (Weick, 1984) on the path to big challenges provide the needed sense of accomplishment.

Employee participation in standard definition may signal to employee that their manager has confidence in their abilities (Locke and Schweiger, 1979).

Job satisfaction

Meeting or exceeding difficult and challenging standards will lead to a sense of achievement not found when meeting easy standards (Locke and Latham, 1990).

Individuals consider their past performance when judging their current performance (Simon, 1988; Vance and Collela, 1990).

Satisfaction may be enhanced when feedback is presented in terms of chance in performance.

Utility analysis and performance effectiveness

Negative and positive effectiveness ratings imply the existence of a zero-point in the utility curve, itself an inverted U function with the minimum being used in evaluative standards.

Future research

Acceptance of external standards

Global: Individual reactions to standards depends on the degree to which external performance standards are accepted by those to whom the standards apply

Proposition 1
Depends on the degree to which the employee indentifies with and is commited to the goals of the organization

Proposition 2
Standards that are communicated and constructed using the factors are more likely to be accepted

Proposition 3
Organizational newcomers are more likely to accept externally set standards

Proposition 3a
The effect of participation on the acceptance of standards will be greater for incumbents than newcomers

Definitional content

Proposition 4
Standards defined in specific, behavioral terms lead to greater motivation and performance.

Proposition 4a
Standards stated in terms of outcomes may increase motivation. From the organization’s POV, standards defined in terms of outcomes seem more useful, from the employee’s POV, it may facilitate performance but has reduced potential for diagnostic feedback.

Proposition 5
Positively framed standards are preferred over negatively framed standards

Proposition 6
Increased motivation and job satisfaction will result if performance standards

  • relate to outcomes valued by employees
  • result in rewards which are perceived as fair given the necessary inputs

Communicating performance standards

Proposition 7
Performance standards reflecting high performance expectations are most likely to facilitate the performance of organizational newcomers.

Proposition 8
Communicating performance standards along with a rationale will result in greater satisfaction than use of equally appropriate, but unjustified, performance standards.

Setting the difficulty of standards

Proposition 9
Individuals working under standards that they consider to be achievable and difficult will be more motivated and more satisfied than will individuals working under easy standards.

Proposition 9a
To the extent that only minimum performance standards are emphasized by organizations:

  • Intrinsic motivation to perform at a greater level will be reduced
  • These minimum standards will be accepted
  • They will serve as relatively easy individual goals

Proposition 9b
Employees with low self-efficacy will be most likely to accept and work towards easy performance standards. Employees with greater self-efficacy will be more likely to accept and work towards difficult performance standards.

Organizations can increase employee’s acceptance of difficult standards, and consequently motivation, by increasing employee’s self-efficacy on tasks addressed by performance standards. A multi-tiered standard could be appropriate, such as Bobko and Wise (1987):

  1. Minimum standard – below which the employee is demoted or fired
  2. Training warning standard – below which action for remediation is taken
  3. Acceptable standard – needing no action
  4. Excellence standard – with associated positive reward

Proposition 10
Organizations that adopt a continuum of performance standards rather than a single common standard across all individuals in a particular job, will increase individual motivation.

Proposition 11
Stating standards in terms of individual changes in performance will enhance individual motivation and increase subsequent individual performance.

Change scores are usually much less reliable than the original component score.

Proposition 11a
A focus on the evaluation of changes in performance will enhance individual satisfaction with the job

Proposition 11b
Individuals with an “incremental skill” orientation will be more likely to accept, and react positively to, performance standards stated in terms of change.

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