Employee participation, performance metrics, and job performance: A survey study based on self-determination theory

Abstract

Suitable and valid operational performance metrics are important means to translate an organization's strategy into action. However, developing high-quality operational metrics is challenging because such metrics need the right degree of context specificity to be meaningful to the managers and employees who will use them. We investigated whether managers consider metrics that have been co-developed with operational employees to be of higher quality and, in turn, whether they use these metrics more-and whether this use is linked to greater employee job performance. On the basis of self-determination theory, we investigated if different uses of performance metrics have different effects. We surveyed 86 pairs of operational employees and their immediate managers in various jobs and industries and tested our hypotheses with structural equation modeling. Results showed that when employees were involved in the development of performance metrics, managers perceived the metrics to be of better quality and employed those metrics more for evaluating and rewarding employees. Moreover, we found employees' performance was only higher when the metrics were used for evaluation purposes. We found no effect for using the metrics for monetary compensation or nonmonetary rewards. In sum, this study demonstrates that employee participation in the development of performance metrics has beneficial effects on the metrics' quality, and shows that the subsequent effect on job performance depends on how these metrics are used. We discuss implications for managers who want to ensure that the effect on employee job performance is positive when they involve employees in the development of operational performance metrics.

Effects of the Interactive Use of Performance Measurement Systems on Job Performance: Mediation Effect of Organizational Learning

“…Furthermore, results (H2) also show that the interactive use of PMS facilitates information sharing, promoting cooperation and improving communication, enabling members of the organization to actively perform tasks and improve job performance. These findings are in accordance with the previous research of Groen et al (2017), which found that the interactive use of PMS influences job performance by facilitating periodic discussions throughout the organization.…”

“…Additionally, organizational performance has been significantly associated with an increased use of non-financial performance measures (Baines and Langfield-Smith, 2003). Groen et al (2017) suggested that employee job performance was only higher when performance metrics were used for periodic discussions and evaluation purposes. Budianto and Yuliansyah (2014) found that interactive use of PMS has a direct effect on corporation performance.…”

The Role of Human Resource Management (HRM) for the Implementation of Sustainable Product-Service Systems (PSS)—An Analysis of Fashion Retailers

“…While firms that implement PSS score high on profit-sharing, they interestingly also score high on financial rewards that are based on individual performance. This is surprising since rewards can impede employees' satisfaction of the need for autonomy [201]. Employees that undertake interesting tasks are already autonomously motivated which makes both monetary or nonmonetary incentives redundant to foster their motivation [202,203].…”

“…Employees that undertake interesting tasks are already autonomously motivated which makes both monetary or nonmonetary incentives redundant to foster their motivation [202,203]. Rewards can even have an adverse effect and reduce employees' intrinsic motivation because they can be perceived as a signal that the task or function is unappealing since otherwise no incentive would be needed [201,204,205]. One explanation for the results of this study could be that most PSS providers have a traditional manufacturing background and still run a production-focused business model as their core business but have founded a separate unit for PSS [60,206].…”

Employees’ Participation and Involvement in Strategic Planning Process in Sudanese Wheat Flour Factories

“…This also could be supported by McKinsey&Company [9] who claimed organization with higher levels of engaged employees have "better business performance, improved customer service, greater revenue growth, and quicker speed to market" (p. 30). The study of Groen et al [10] showed that, when employees were involved in the development of performance metrics, managers perceived the metrics to be of better quality and employed those metrics more for evaluating and rewarding employees. This requires aligning employees' efforts which will lead to aligning goals setting and aligning goals setting will definitely lead to effectiveness and efficiency of achieving these goals in a time manner Ali [11].…”