Theories of Performance

Management System
A process for establishing a shared
understanding about what is to be achieved,
and how it is to be achieved, and an
approach to managing people that increases
the probability of achieving success (Weiss
and Hartle, 1997)
 Traditionally, performance
management is viewed to be the
responsibility of immediate supervisor.

 Today, modern employee now expect

to be more involved in determining
the performance management that
affects them.
Motivational theories
 Hierarchy of Needs Theory by Maslow,
 Theory X and Theory Y by Mcgregor, and
 Two-factor theory of Herzberg.
 Expectancy Theory (Guest, 1997),
 Justice Theory (Latham et.al, 2005),
 Self-Determination Theory (Ryan and Deci, 2000).
 Donovan (2001) Identified Equity Theory, Expectancy
Theory, Cognitive Evaluation Theory, Goal Setting
Theory, Control Theory, and Social Cognitive Theory
Best known Early theories of motivation

Hierarch of Needs Theory by Maslow.

Theory X and Theory Y by Mcgregor
Two-factor theory of Herzberg
motivation is a means of inspiring people to intensify their
desire and willingness to discharge their duties efficiently
and to co-operate for the achievement of common objectives.
 Maslow’s hierarchy of needs

Individuals cannot move

to the next higher level
until all needs at the
current (lower) level are
satisfied.
Goal setting theory
Five basic principles that allow goal setting to perform better.
1. Clarity refers to a clear and measurable goal that can be
achieved within a specific timeline and within goal setting.

2. Challenge refers to the goals being able to achieve a decent

level of difficulty, motivating the individual and organization
to strive for positive goal achievements.

3. Commitment makes individuals or organizations put on

deliberate efforts in meeting goals. Furthermore, it also
helps goals to become more achievable.

4. Feedback provides information on the progress towards

achieving goals. Individuals and organizations can adjust
goal setting according to the feedbacks.

5. Task complexity makes the achieving of goals easier by

laying down process and steps. Goal setting can be achieved
by applying all the principle stringently and ensuring that all
goals account for the principles.
Limitation of goal setting theory and
its validity in a business
 Time-consuming and expensive in an application.
 Selections of right people with skills and knowledge.
 Making training for career development and
organizational productivity a necessity.
 Involving time and incurring expenses.
 Internal competition risk
 Favoritism by leaders of those individuals who
perform better
Control theory
Actions of all systems should be in sync with the overall
goals and objectives of an organization (Barrows &
Neely, 2012)

Forms of control which an organization can use in order to get the

desired results such as:
 organizational structure,
 behavioral controls like norms and policies of an organization or
 performance measurement mechanisms.
Strength and weakness of control theory
 An employee hopes to meet their basic needs by working in an
organization. Once their needs align with the organization’s
standards and demands, the desired behavior will be achieved.
 On the other hand, control theory assumes that employees look at
their feedback. This feedback controls the quality of the output.
However, it can also have a negative impact, as it could result in
decreased motivation and productivity level of the employee.
 In control theory employee performance is also controlled by the
rewards and recognition which an employee achieves once his
performance meets the standards of an organization.
Expectancy theory

 Individuals behave in a specific manner

because they get motivated by the
desirable outcome of such behavior.
 Expectancy is determined by individual
belief that performance of a specific
type of behavior will certainly help the
individual in attaining desired
performance goals
Application of expectancy theory

 Determines the motivators that influence people to join

an organization based on needs, goals and past
experiences.
 Interprets the specific behavior that the employees
exhibit based on their individual expectancy calculations.
 Postulates that different people want different things
from their organization. This range from good salary to
job security to scopes for professional enrichment.
Advantages of expectancy theory
 Employees can achieve maximum job satisfaction if the right
motivator is provided to them.
 Helps in interpreting individual psychologies.
 Helps in recognizing the individual motivators that influence
people to make choices based on their specific expectations.
 Helps in making individual employees aware about organizational
behavior and consequent expectations from the organization.
 Organizations are able to identify actual performance of their
employees using this theory
 Helps them in retaining employees who can add value to their
firm by recognizing their respective intrinsic and extrinsic
motivators
Limitation of expectancy theory

 Variables are quite difficult to measure.

 Involvement of a number of variables makes the theory
complicated in nature
Justice theory
 The extent in assessing the perceptions of the employees regarding
organization’s performance management system.
 The better the employee perception of an organization, the higher
the satisfaction level of that employee
Properties of justice theory
Advantages of justice theory
 Commitment.
 Helps in building the strong connection between the employees and the
organization.
 Fostering job performance.
 Enhances the overall performance of the organization.
 Reduced absenteeism.
 Indicates that employees are being provided with adequate training and
support which ensures that employers are dealing with their employees
appropriately and professionally.
 Improved health.
 Outcomes and well-being is an important focus of organizational psychology
and management research.
Limitations of justice theory
 Justice theory sometimes viewed as time-consuming and
controversial, especially when it comes to increment of pay
structure of the employees which leads to dissatisfaction
among them.
 Employees may sometimes perceive that they are performing
at an outstanding level while the supervisor sees such
performance as average.
 Employers may make errors in their judgment or permit biases
during the process of evaluation. This might occur because
they focus on the negative aspects and not balancing it with
the positive aspects
Application of justice theory

It promotes better planning for the institution,

which results in achieving the employee goals
to organizational goals.
It promotes communication and participation to
both parties resulting in increased trust.
Thank you very much
for listening