How self-efficacy and
locus of control influence
performance
Final Version
Student: Tess ten Pas
Student number: 10671404
Date: 16-08-2015
Education: MSc Accountancy and Control, Control track
Institution: University of Amsterdam, Faculty of Economics and Business Supervisor: prof. dr. Victor S. Maas
Statement of originality
This document is written by Tess ten Pas who declares to take full responsibility for the contents of this document.
I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it. The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.
Abstract
Purpose: The purpose of this thesis is to investigate which personal traits influence performance within an incentive system. This thesis will focus on two traits namely locus of control and self-efficacy.
Research method: In order to answer the research question a survey was conducted in May 2015 within a leading international provider of high-quality mobility services for
business and corporate customers as well as private travellers. The survey population consists out of 128 employees. The sample consisted of Dutch speaking employees and French
speaking employees. The hypotheses where tested with a linear regression.
Findings: The hypotheses where tested with a linear regression. The variables explained 3.3% of the variance, however the t-value shows that the beta for self-efficacy is insignificant (P = .676). For locus of control the t-value shows that the beta close to being statistically significant (P = .055). It can be concluded that in this case self-efficacy does not have an effect on performance but locus of control is on the edge of having a significant effect on performance. Both the hypotheses are therefore not supported by the linear regression.
Limitations: The research approach in this thesis has several limitations. Firstly, the data were collected at a single point in time, it is difficult to measure changes in the population unless two or more surveys are done at different points in time. Hence, future research may attempt to determine the personality variables by performing more questionnaires over a longer period of time. Secondly, a few respondents had to fill in the survey in English which is not their mother tongue. It is possible that they understood the questions differently than they would have in their mother tongue.
Contribution: This thesis contributes by adding to the additional body of work there is about personality and performance but with different personality traits and a different population. Judge and Bono (2001) argue that there is a lack of studies linking the core self-evaluation model to job performance, and the traits are often studies in isolation which they find regrettable because research has demonstrated that a single personality variable often is a poor predictor of job behaviour. This thesis fills this gap by studying locus of control and self-efficacy and their effect on performance. However, there was not a significant correlation found between Locus of control and Self-efficacy.
Preface
You have before you the product of a master’s course followed at the University of Amsterdam. This thesis was part of the completion of the Master’s course Accountancy and Control, Control direction. Before this master’s course I studied for four years at the
University of Applied Sciences, I am very happy that I have chosen to continue to study at the University of Amsterdam. Although it was a difficult year, which asked the utmost of me, i experienced the Mater’s course Accountancy & Control direction Control as a valuable contribution to my knowledge and experience.
During the writing process many people helped me in completing my thesis therefore I would like to thank them. I would like to thank my employer for giving me the opportunity to conduct my research. My supervisor, Victor Maas, for his advice and tips. I would like to thank all my colleagues, and specifically those who freed time to fill out the survey.
At last I would like to thank my family for being there when I needed the support. Especially my brother, who made time in his busy schedule to read my thesis and providing me with remarks and tips.
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Content
1. Introduction ... 3 2. Literature review ... 7 2.1 Management control ... 7 2.1.1 Performance measurement ... 8 2.1.2 Performance management ... 10 2.1.3 Determinants of performance ... 12 2.2 Personality ... 14 2.3 Locus of control ... 16 2.4 Self-efficacy ... 18 3. Hypothesis development ... 20 4. Research method ... 22 4.1 Background ... 22 4.1.1 Company background ... 224.1.2 Rental sales agents ... 22
4.1.3 Control of rental sales agents ... 23
4.2 Research design ... 23 4.3 Sample ... 24 4.4 Measurement ... 27 4.4.1 Performance measure ... 27 4.4.2 Locus of control ... 27 4.4.3 Self-efficacy ... 28 4.5 Reliability ... 28 5. Results ... 29 5.1 Descriptive statistics ... 29
2 5.2 Bivariate correlations ... 29 5.3 Preliminary analysis ... 31 5.4 Hypotheses test ... 35 6. Conclusion ... 38 References ... 42 Appendices ... Appendix A: Survey ... Appendix B: Survey response by date ... Appendix C: Correlation matrix ... Appendix D: Factor analysis ...
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1. Introduction
Performance measures have been used to assess the success of companies throughout history (Kennerly and Neely, 2003). Management control has had a primary function in developing performance measures to assist managers in planning and controlling their organizations (Chenhall and Langfield-Smith, 2007). Langevin and Mendoza (2013) argue that Management control systems are widely used in companies and help managers to make the right decisions by aligning their objectives with the company’s global objectives, and by informing them of their performance so that they can take corrective action if necessary. However, performance measures only give an indication what happened, and not what to do about it, this brings us to the importance of managing the performance.
Armstrong and Baron (2000) define performance management as ‘a process which is designed to improve organizational, team and individual performance and which is owned and driven by line managers’. Monetary incentives frequently are suggested as a method for motivating and improving the performance of persons who use and are affected by accounting information (Horngren et al., 2000). Several accounting studies have examined the effects of monetary incentives on individual performance but the results are mixed with regard to their effectiveness. Bonner and Sprinkle (2000) state that there is still a gap in our knowledge regarding the effectiveness of monetary incentives reward system. Little is known about variables that interact with incentives in affecting task performance.
Waldman and Spangler (1989) find that researchers in the field of organizational behaviour have had a lot of interest in understanding, predicting, and findings ways of enhancing job performance.
Barrick and Mount (2005) argue that personality plays an important role in work and organizational behaviour. They found that personality is not only related to job performance, but also to various other outcomes like intention to leave, absenteeism, job satisfaction and organizational commitment.
Besides research studies also practitioners recognize the importance of behavioural orientations. Bill McElroy, finance director and board member of the Toyota Motor Corporation stated in an interview that he would like to know more about psychology – in terms of why people are the way they are and why they behave the way they behave (Birkett 1995).
4 The purpose of this thesis is to investigate which personal traits influence performance in an organization that has an incentive control system. Ajzen (1991) argues that most
literature is based on the assumption that performance measures and rewards affect
individuals in a similar fashion, regardless of their individual differences. Personality theories, however, suggest that the effects of contextual factors on human behavior depend on
individual differences that result in different perceptions and attributions of the same context. There are different models within psychology that study different personality traits,
namely the Five factor model, the Three factor model and the HEXACO model. These models share a lot of similar personality traits.
The Five factor model is the most widely research subject within the study of human personality (Judge, et al, 2002; Hogan and Holland, 2002; Barrick and Mount, 1991). The five factor model consists of neuroticism, extraversion, agreeableness, conscientiousness, and openness to experience.
Ng, Sorensen, and Eby (2006) suggest that the role of personality at work has been increasingly reaffirmed. However the attention is often limited to the Big Five personality traits. A personality model that consists of different personality traits than the Five factor model is the Core Self-evaluation model. The core-self-evaluation concept represents four personality traits namely: neuroticism, self-esteem, self-efficacy, and internal locus of control (Judge, Erez, Bono, & Thoresen, 2002).
Robbins and Judge (2007) state core self-evaluation to be a powerful predictor of
behaviour in organizations. Judge and Bono (2003) state that People who have a positive core self-evaluations like themselves, and see themselves as effective, capable, and in control of their environment. People with a negative core self-evaluation tend to dislike themselves, question their capabilities, and view themselves as powerless over their environment. Research has shown that the core-self-evaluations construct is related to job satisfaction and performance (Bono and Judge 2003), because people with high core self-evaluation are more motivated to perform their jobs.
There is an overlap between core self-evaluations and the Five factor model, as one of the four indicators of core self-evaluation is neuroticism. Because this is already widely
researched this trait will not be included in this thesis. Also self-esteem will not be included because the distinction between self-esteem and self-efficacy is very subtle (Bono and Judge, 2003). Therefore this thesis will focus on two traits namely locus of control and self-efficacy.
5 Locus of control refers to an individual’s perception about the underlying main causes of the events that occur in his/her life (Rotter 1966). Spector (1982) suggests that locus of control may be an important personality variable in organization research and theory because it explains behaviour in organizational situations.
Blau (1993) who only researched the effect of locus of control on productivity mentioned that other personality traits reflecting a sense of personal responsibility, such as self-efficacy also could be tested for future research.
Psychologist Albert Bandura (1986) has defined self-efficacy as one's belief in one's ability to succeed in specific situations.
Individuals who judge themselves as capable of performing well (Self-efficacy) should see themselves as having control of their environment (Locus of control). Because of this Bono and Judge (2003) argue that Self-efficacy is closely aligned with locus of control.
This thesis examines the following research question:
“How do locus of control and self-efficacy influence the performance of employees?
Judge and Bono (2001) argue that there is a lack of studies linking the core self-evaluation model to job performance, and the traits are often studies in isolation which they find
regrettable because research has demonstrated that a single personality variable often is a poor predictor of job behaviour. This thesis fills this gap by studying locus of control and self-efficacy and their effect on performance.
To answer the research question a survey was conducted in May 2015 within a leading international provider of high-quality mobility services for business and corporate customers as well as private travellers. Employees within the Benelux division who performed the function Rental Sales Agent, Branch manager, Trainee or Supervisor were asked to fill out the survey with questions to establish the locus of control and the self-efficacy of the employees.
The formulated hypotheses where tested in a linear regression. The results indicate that in this case self-efficacy does not have an effect on performance but locus of control is on the edge of having a significant effect on performance.
This thesis contributes by adding to the additional body of work there is about personality and performance but with different personality traits, different population and in a different setting. Judge and Bono (2001) argue that there is a lack of studies linking the core self-evaluation model to job performance, and the traits are often studies in isolation which they
6 find regrettable because research has demonstrated that a single personality variable often is a poor predictor of job behaviour. This thesis fills this gap by studying locus of control and self-efficacy and their effect on performance. However, there was not a significant correlation found between Locus of control and Self-efficacy.
This thesis is structured as follows. First the existing literature concerning performance, personality, locus of control and self-efficacy will be outlined in chapter 2. Based on this literature the hypotheses will be developed in chapter 3. In chapter 4 the research method used in this thesis will be explained. In chapter 5 the hypotheses will be tested. The final chapter provides a summary of the thesis and a definitive answer to the research question. Also the contribution to academic literature is discussed, as well as the contribution to practice. At last the most important limitations and interesting directions for future research that emerge from the study are described.
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2. Literature review
In this paragraph first the existing literature concerning management control. Next the existing literature regarding personality will be elaborated. Finally, theory regarding locus of control and self-efficacy will be further explained.
2.1 Management control
Management control has had a primary function in developing performance measures and performance management, to assist managers in planning and controlling their organizations (Chenhall and Langfield-Smith, 2007). The collection of control mechanisms that are used are referred to as a management control system (Merchant and Van der Stede, 2007). Anthony and Govndarajan (1998) define management control as “the process by which managers influence other members of the organization to implement the organization’s strategies” which involves planning, coordination activities, communicating information, evaluating information, deciding if action should be taken and influence people to change behaviour. Langevin and Mendoza (2013) argue that Management control systems are widely used in companies and help managers to make the right decisions by aligning their objectives with the company’s global objectives, and by informing them of their performance so that they can take corrective action if necessary. Merchant and van der Stede (2007) define management control systems as systems managers use to ensure that the behaviours and decisions of their employees are consistent with the organization’s objectives and strategies. Anthony and Govndarajan (1998) argue that the central purpose of a management control system is to ensure a high level of goal congruence, that the actions people take are in accordance with their own interest and the interest of the company.
To influence people to take action that are in accordance with the interest of the company Merchant and Van der Stede (2007) defined different management control alternatives. Namely, action controls, personnel controls, cultural controls and results controls.
Action control involves ensuring that employees perform the right actions that are in line with interest of the company (Merchant and Van der Stede 2007). Examples of action controls are behavioural constraints, which make it difficult for employees to make actions that are not allowed by giving for example limits on access. Pre-action review, which involves approving or disapproving proposed actions. Action accountability, which makes employees accountable for the actions they make, approved actions can lead to rewards and disapproved actions can
8 lead to punishment. At last, redundancy, this includes putting more people to a task than would be necessary, this increases the chance of successful completing the tasks.
Personnel controls, are controls that make it more likely that employees will perform the desired tasks satisfactorily on their own (Merchant and Van der Stede, 2007). Personnel controls help employees to understand what the organization wants, make sure that employees are able to do aa good job, and increase the likelihood that employees will self-monitor
(Merchant and Van der Stede, 2007).
Cultural controls are to shape organizational behavioural norms and to encourage employees to monitor and influence each other (Merchant and Van der Stede, 2007). However, the type of management control that dominates in importance in the vast majority of organization are result controls (Merchant and Van der Stede, 2007). Result controls involves motivating employees to produce the outcomes the organization pursues (Merchant and Van der Stede, 2007). Result controls influence actions or decisions because they cause employees to be concerned about the consequences of their actions or decisions (Merchant and Van der Stede, 2007). Like all controls, results control requires performance measures and evaluations. To conclude, important aspects of management control based on the literature is making sure that employees behave in a way that is in line with the
organizations objectives. Results control dominate in the majority of the organizations. Result controls requires performance measurement and performance evaluation. To realize that employees behave in a way that is in line with organizational objectives measuring and managing performance is needed.
In this paragraph the literature concerning performance will be further outlined. It will
begin with the literature regarding performance measurement. That is followed by the literature regarding performance management. In the last part the different determinants of performance will be outlined.
2.1.1 Performance measurement
Neely, Gregory and Platts (2005) define performance measurement as the process of quantifying the efficiency and effectiveness of action a performance measure as a metric used to quantify the efficiency and/or effectiveness of an action.
As already stated in the introduction, performance measures have been used to assess the success of companies throughout history (Kennerly and Neely, 2003). Eccles (1991) argues
9 that the primary reason for measuring performance was the increasing competition and the diversity in products, markets and business units. Waggoner et al. (1999) argue that performance measurement in business serves the purpose of monitoring performance, identifying the areas that need attention, enhancing motivation, improving communications and strengthening accountability. Amaratunga and Baldry (2002) argue that a performance measurement system is needed to ensure that goals and the objectives of an organizational strategy are met. This means there is a general consensus on the need and scope of
performance measurement.
There are mainly five reasons why companies implement performance measurement systems according to Waggoner, Neely and Kennerley (1999). Firstly to monitor the performance of the company as a whole, secondly to identify areas that need special
attention, thirdly to change motivation, fourthly to improve communication and fifth and last is to strengthen accountability. Anthony and Govndarajan (1998) argue that performance measurement systems are also implemented to address the needs of the different stakeholders of the organization.
Kennerley and Neely (2002) argue that financial measures have long been the mostly used measures to evaluate performance of organizations, but lately there has been a growing
realisation that it is no longer appropriate, given the complexity of the organizations, to only use financial performance measures. The shortcomings that come when only focusing on financial performance are that managers cannot asses how well employees performed across the full range of strategically important areas, financial measures do not describe causes but only consequences, it can lead to gaming behaviour of managers and they are not externally focused (Kennerley and Neely 2002). Anthony and Govndarajan (1998) also found limitations of only using financial measures to be that it encourage short-term actions rather than thinking about the long term interest and that relying on financial measures alone is insufficient to ensure that the strategy will be executes successfully. Anthony and Govndarajan (1998) identify six different types of performance measures, namely outcome measures which indicate the result of the strategy, driver measures which are leading indicators, financial measures, non-financial measures, internal measures and external measures.
Performance measurement frameworks have been developed to encourage a more balanced view. An example of such a performance measurement system is the balanced scorecard from Kaplan and Norton (1996), which measures the financial perspective,
10 Besides the development of more balanced frameworks also a range of criteria for
performance measures has been developed. Kennerley and Neely (2002) argue that effective performance measures need to relate directly to the organization’s mission and objectives, they need to reflect the organization’s competitive environment, reflect the customer’s requirements and reflect the internal objectives.
Braz, Scavarda and Martins (2011) argue that good performance measures are quantitative and objective, easy to understand what is measured and how it is measured, encourage
appropriate behaviour, are visible for everyone and measure what is considered important. Merchant and Van der Stede (2007) also recognize timeliness as an important factor because employees need repeated performance pressure.
The advantages of using performance measures are that companies can see how they performed in the past, how they are performing now and what needs to be done to ensure the goals and objectives. It serves as a learning tool; the employees can learn and improve by seeing how efficient and effective their actions were (Kennerley and Neely 2002).
However, Amaratunga and Baldry (2002) warn for the fact that if measures are not used right, they will fail to deliver the promised benefits as learning tool and ensuring the goals and objectives. Performance measures only give an indication what happened, and not what to do about it, this brings us to the importance of managing the performance. Performance
measurement is therefore part of the much wider performance management practice (Busi and Bititci 2006). To conclude, performance measures are needed to ensure that goals and the objectives of an organizational strategy are met. It quantifies the efficiency and effectiveness of actions the employees make. However if no one acts upon unwanted outcomes the
measuring of performance is not useful therefore performance management is needed. In the next paragraph performance management is further explained.
2.1.2 Performance management
Armstrong and Baron (2000) define Performance management as “a process which is designed to improve organizational, team and individual performance and which is owned and driven by line managers”. Amartunga and Baldry (2002) define performance management as “the use of performance measurement information to effect positive change in organizational culture, systems and processes, by helping to set agreed-upon performance goals, allocating and prioritizing resources, informing managers to either confirm or change current policy or program directions to meet those goals, and sharing results of performance in pursuing those
11 goals”. Cascio (1986) defines performance management as the total process of observing an employee’s performance in relation to job requirements over a period of time and then of making an appraisal of it.
Hollenbeck, Gerhart and Wright (1997) identify three purposes of performance management which overlap with the previous stated definitions. Hollenbeck et al., (1997) argue that performance management has a strategic purpose to link employee activities with organizational goals, an administrative purpose to make decisions regarding salary,
promotions and layoffs, and a purpose to develop employees.
The different definitions have in common that managers need to be informed about both goals and results, and that they need to communicate the findings with their employees. Performance managers need to get involved in performance planning, coaching, assessments and reviews (Haines and St-Onge 2012).
As discussed in the previous paragraph result controls involves motivating employees to produce the outcomes the organization pursues and this requires providing rewards.
(Merchant and Van der Stede, 2007).
By linking valued rewards to results that are in line with organizational objectives managers can derive motivational value from their employees(Anthony and Govndarajan 1998). Valued rewards can be anything that an employee values, like salary increase, bonuses, promotion, job security, job assignments, training opportunities, recognition, and power (Anthony and Govndarajan 1998).
A frequently suggested reward for motivation and improving the performance of persons who use and are affected by accounting information are monetary incentives (Horngren et al., 2000). Robbins and Judge (2007) identified different types of monetary incentives, namely, piece-rate pay, merit-based pay, bonuses, profit-sharing plans, gainsharing and employee stock ownership plans.
Several accounting studies have examined the effects of monetary incentives on individual performance but the results are mixed with regard to their effectiveness. Condly, Clark and Stolovitch (2003) find that monetary incentives can significantly increase work performance when the incentives are carefully implemented and performance is measured before and during the incentives programs.
12 Alfie Kohn (1993) argues that monetary incentives encourage compliance rather than risk-taking because most rewards are based only on performance. As a result, associates are discouraged from being creative in the workplace.
However, there are different views that argue that monetary incentives may undermine the intrinsic motivation to engage in the task, which in turn leads to poorer performance (Gneezy and Rustichini 2000; Heyman and Ariely 2004).
Shah, Higgins and Friedman (1998) state that the same incentive can motivate individuals differently because their personal goals or needs differ. Haines and St-Onge (2012) find that performance management systems does not lead to expected performance increase because of a poor understanding of the social context in which they are implemented. Vroom (1964) suggested that the effect of task incentives on motivation is dependent on personal values.
Bonner and Sprinkle (2000) state that there is still a gap in our knowledge regarding the effectiveness of monetary incentives reward system. Little is known about variables that interact with incentives in affecting task performance.
To conclude, performance management is used to improve performance by using performance measures. A frequently used method to motivate the employees is by using incentives. However, monetary incentives do not have the same effect on everyone. That raises the question what other determinants are that influence employees to perform differently. In the following paragraph different determinants of performance are further outlined.
2.1.3 Determinants of performance
A basic concept of determinants of job performance is the expectancy theory by Vroom (1964). It is the most widely accepted explanation of motivation (Robbins and Judge, 2007). Expectancy theory argues that the strength of a tendency to act in a certain way depends on the strength of an expectation that the act will be followed by a given outcome and on the attractiveness of that outcome to the individual (Robbins and Judge, 2007). The theory says that an employee will exert a higher level of effort when (1) their expectancies or their belief is that their effort will lead to a good performance; (2) that good performance leads to
organizational rewards; (3) and the reward is satisfying. The satisfying aspect of a bonus is not always restricted to its monetary value, it also may have a satisfying aspect in securing other valued items, such a status and prestige.
13 Authors have argued that the perceptions of instrumentality and expectancy are influenced by the personality of the perceiver (Lied and Pritchard 1976, Broedling 1975). Lied and Pritchard (1976) found that people with high self-esteem had higher expectancies that their effort will lead to a good performance. Not only perception and instrumentality plays a role here in job performance but also personality can have a positive effect on performance.
Another model that describes the determinants of job performance is the behavioural model by Bagozzi (1978). Bagozzi (1978) specifically looks at sales performance and argues that sales performance is a function of individual characteristics like self-esteem, other directedness and verbal influence, interactions with significant others like role conflict and role ambiguity and the environment in which these interactions take place like sales potential and work load. Bagozzi (1978) found that self-esteem was the most powerful predictor of performance.
A model that is comparable to Bagozzi’s model (1978) is the model of Robbins and Judge (2007) who divide the determinants of performance in three levels, the individual-level variables, group-level variables and organization systems-level variables.
Individual level variables are certain characteristics that people have when they enter organizations and that will influence their behaviour at work like biographical characteristics, personality characteristics, ability levels, attitudes, learning, and motivation (Robbins and Judge, 2007).
Group level variables are certain characteristics that people have when they are in a group. This can differ from their individual level characteristics. Examples of these variables are pattern of behaviour of the group, acceptable standards of behaviour of the group and attractiveness between group members.
Organization systems-level variables are the design of the organization, the organization’s internal culture and human resource policies. These variables all have impact on performance of employees.
Churchill et al. (1985) analysed and categorized different determinants of sales performance. He found that that the determinants can be ordered in the following way in terms of the average size of their association with sales performance: (1) personal factors, (2) skill, (3) role variables, (4) aptitude, (5) motivation, and (6) organizational/environmental factors.
14 Based on the reviewed literature personality plays an important role in determining
performance. It has influence on the instrumentality and expectancy perception of people, it plays a part in the behavioural model of Bagozzi (1978) and Churchill et al. (1985)
categorized it as the most important determinant of sales performance. In the next paragraph the role of personality is going to be further explained.
2.2 Personality
From the previous paragraph it can be concluded that personality plays an important role in the different models that describe the determinants of performance. Barrick (2005) state that personality plays an important role in work and organizational behaviour. They found that personality is not only related to job performance, but also to various other outcomes like intention to leave, absenteeism, job satisfaction and organizational commitment.
Ajzen (1991) argues that most literature is based on the assumption that performance measures and rewards affect individuals in a similar fashion, regardless of their individual differences. Personality theories, however, suggest that the effects of contextual factors on human behavior depend on individual differences that result in different perceptions and attributions of the same context.
Besides research studies also practitioners recognize the importance of behavioural orientations. Bill McElroy, finance director and board member of the Toyota Motor Corporation stated in an interview that he would like to know more about psychology – in terms of why people are the way they are and why they behave the way they behave (Birkett 1995).
But what is personality? The most frequently used definition of personality was produced by Gordon Allport (Robbins and Judge, 2007). His definition of personality is: “the dynamic organization within the individual of those psychological systems that determine his unique adjustments to his environment.” Robbins and Judge (2007) simplified this definition by stating that personality can be seen as the sum total of ways in which an individual reacts to and interacts with others.
Barrick (2005) emphasize the importance of personality by arguing that personality contributes to the prediction of job performance, and is even a better predictor than general mental ability and biographical data because it explained more significant incremental variance.
15 To research human personality the Five factor model is often used (Judge, et al, 2002; Hogan and Holland, 2002; Barrick and Mount, 1991). The five factor model consists of neuroticism, extraversion, agreeableness, conscientiousness, and openness to experience. The five factor model has been researched in areas of industrial-organizational psychology, with respect to job performance and job satisfaction (Barrick and Mount, 1991). Barrick and Mount (1991) found that the most significant finding with regards to personality and job performance was the Conscientiousness dimension. There has been increased attention regarding the role of personality at work but it is often limited to the Five factor model, personality traits outside that model have received less attention (NG, et al. 2006).
Other personality models are the Three factor model and the HEXACO model of personality. The Three factor model consists of neuroticism, extraversion and psychoticism (Eysenck 1991). The HEXACO model consists of six traits namely: Honesty-Humility, Emotionality, Extraversion, Agreeableness, Conscientiousness, and Openness to Experience (Tybur and de Vries 2013). Johnson, Rowatt and Petrini (2011) found that the HEXACO model correlated positively with job performance among medical care providers. These models share a lot of similarities with the Five Factor model.
A personality model that consists of different personality traits than the Five factor model, Three factor model and HEXACO model is the Core Self-evaluation model. The core-evaluation concept represents four personality traits namely: neuroticism, esteem, self-efficacy, and internal locus of control (Judge, Erez, Bono, & Thoresen, 2002).
Robbins and Judge (2007) state core self-evaluation to be a powerful predictor of behaviour in organizations. Judge and Bono (2001) define core self-evaluations as “a
fundamental or bottom-line evaluations that individuals hold about themselves”. People who have a positive core self-evaluations like themselves, and see themselves as effective, capable, and in control of their environment (Judge and Bonno, 2001). People with a negative core self-evaluation tend to dislike themselves, question their capabilities, and view themselves as powerless over their environment (Judge and Bono 2001). Research has shown that the core-self-evaluations construct is related to job satisfaction and performance (Bono and Judge 2003). This corresponds to Korman’s (1970) theory of work motivation. Korman (1970) argues that people will be motivated to behave and perform in a manner that is consistent with their self-concept.
16 Judge and Bono (2001) argue that there is a lack of studies linking the core self-evaluation model to job performance, and the traits are often studies in isolation which they find
regrettable because research has demonstrated that a single personality variable often is a poor predictor of job behaviour.
There is an overlap between core self-evaluations and the Five factor model, as one of the four indicators of core self-evaluation is neuroticism. Because this is already widely
researched this trait will not be included in this thesis. In addition to neuroticism the indicator self-esteem will not be included because the distinction between self-esteem and self-efficacy is very subtle (Bono and Judge, 2003).
This thesis will focus on two traits; locus of control and self-efficacy who share strong similarities. Individuals who judge themselves as capable of performing well (Self-efficacy) should see themselves as having control of their environment (Locus of control) (Judge, Locke, Durham and Kluger, 1998). The traits differ in one important respect. Self-efficacy pertains to confidence with respect to actions or behaviours, whereas locus of control is more concerned with confidence in being able to control outcomes (Judge, Locke, Durham and Kluger, 1998).
In the following paragraphs Locus of Control and Self-Efficacy will be further explained. 2.3 Locus of control
The Locus of control concept is developed by psychologist Rotter (1955). Locus of control refers to an individual’s perception about the underlying main causes of the events that occur in his/her life (Rotter, 1966). Research on locus of control suggests that individuals vary in their expectancies regarding their ability to control events affecting them and their tendencies to attribute the causes of their successes or failures to either internal or external sources (Rotter, 1966). Those with an internal locus of control (or internals) have high expectancies of their ability to control events, and they attribute success or failure to themselves. Those with an external locus of control (externals) have low expectancies of control and attribute success or failure to external sources, such as specific situations, other people, or fate (Rotter, 1966).
There has been done extensive research on locus of control within several disciplines of psychology (Wang, Bowling, and Eschleman, 2010; Nowicki and Duke, 1974; Hiroto, 1974; Findley and Cooper, 1983). Early research about locus of control suggests that internals had
17 fewer difficulties during social interactions than externals (Lefcourt, Martin, Fick, and Saleh 1985). Within organization science locus of control has received less attention (Ng, Sorensen and Eby, 2006).
Spector (1982) found locus of control to be an important variable for the explanation of behaviour in organizations. The studies indicated that locus of control is related to motivation, effort and performance. Internals believe that they are able to control events, this belief should affect the likelihood of attaining the desired outcomes. Externals on the other hand are more likely to believe that their attempts to control events are useless, with the consequences that they are passive and have low motivation. Because internals believe that they are able to control events, they should believe that their behaviour affect the likelihood of attaining the desired outcomes. Externals may be more likely to believe that their attempts to control are useless, which can lead to passivity and low motivation (Ng, Sorensen, and Eby, 2006).
Spector (1982) suggest that there are two reasons to suspect that internals would perform better. First, they hold greater expectancies that effort will lead to good performance to reward. Second, internals seek more relevant information and perform better than externals in complex task situations.
Phares (1968) also found that internals perform better than externals in the same
acquisition situation because internals use the memorized information for problem solving. Reitz and Jewell (1979) conducted a survey of over 3000 workers in six countries. Their results indicated that locus of control was significantly related to job involvement, indicating that internals showed more involvement and greater motivation.
Spector (1982) argues that people with internal locus of control have demonstrated superior performance in learning and problem solving. So internals make better use of
information in a complex problem-solving situation. Internals would be more likely to believe that their efforts will lead to rewards, especially when they actually do, and thus internals would tend to exhibit higher motivation.
Blau (1993) conducted a survey of full-time bank tellers working for a large
non-unionized bank. His results indicated that locus of control was significantly positively related to productivity. So workers with an internal locus of control processed more transactions.
18 However, Spector (1982) argues that internals are not always best suited for the job. Externals are more conforming and compliant which makes them more suited for factory line jobs, unskilled labour jobs, clerical jobs, and job of a routine nature.
With regards to supervision, externals prefer a more directive management while internals prefer participative management (Runyon, 1973).
Another situation where externals are less likely to perform better than externals is when the internals do not expect that their performance will lead to the valued rewards (Lawler, 1971).
To conclude, the basic differences between internals and externals should have an effect on organizations. Internals believe that they can control their environment, like for example, their work setting. Internals perform better in learning and problem solving situation, which leads to better performance. Internals seem to be best suited for highly technical or skilled jobs, professional jobs, and managerial jobs (Spector, 1982).
2.4 Self-efficacy
Psychologist Albert Bandura (1986) has defined self-efficacy as one's belief in one's ability to succeed in specific situations. One's sense of self-efficacy can play a major role in how one approaches goals, tasks, and challenges. According to Bandura's theory, people with high self-efficacy, are more likely to view difficult tasks as something to be mastered rather than something to be avoided. He observed that people with high self-efficacy increase their effort after negative feedback, where people with low self-efficacy are more likely to lessen their effort.
Bono and Judge (2003) define self-efficacy as: “one’s estimate of one’s capabilities of performing, at a global level across many contexts (p. 7). Smith (1989) defines self-efficacy as someone's judgment of how well one can perform across a variety of situations.
Stajkovic and Luthans (1998) state that there is a great number of research that demonstrate a positive relationship between self-efficacy and different motivational and behavioural outcomes. People with high self-efficacy will undertake challenging activities if they believe they have the capabilities (Wood and Bandura, 1989). In their meta-analysis Stajkovic and Luthans (1998) identified a strong relationship between self-efficacy and
19 with less complex tasks. Also Philips and Gully (1997) found that self-efficacy lead to higher self-set goals and higher performance.
Randhawa (2004) found that the chance of successfully performing a task depends upon the level of self-efficacy. People with low self-efficacy were more likely to give up while people with higher self-efficacy increased their effort to complete the task. Gist (1987) found similar results, people with high self-efficacy were more persistent to master experiences, while those with low self-efficacy gave up more easily.
Philips and Gully (1997) studied 405 undergraduate students and found that higher efficacy lead to higher set goals and higher performance. Students with higher self-efficacy got better grades.
Barling and Beattie (2015) performed a research under insurance sales personnel. They found that efficacy beliefs were a significant predictor of the number of sales calls, number of policies sold and the total value of the policies sold. Efficacy expectations were a more significant predictor than organization experience and educational level. This is an interesting finding because this indicates that self-efficacy plays a bigger role is someone’s performance than experience and education.
However, there are different views regarding the effect of self-efficacy on performance. It has been found that high self-efficacy led to overconfidence in one's abilities and the
individual becomes less attentive and effortful and thus contributed less. Vancouver, Thompson, Tischner and Putka (2002) argued that, over time, self-efficacy can lead to overconfidence and thereby detracted from performance. Similarly, Cervonce and Wood (1995) found negative relation between initial strength of self-efficacy and decision
performance. Within the condition combining assigned goals and specific feedback, subjects who initially high confidence in their capabilities had performed more poorly.
To summarize, most literature find that people with higher self-efficacy perform better because they are less likely to give up. There are also different views, it has found that higher self-efficacy can lead to overconfidence which detracts from performance.
20
3. Hypothesis development
In this section the main hypotheses are presented and their theoretical backgrounds are explained. Two main hypotheses are considered, which are related to locus of control and self-efficacy. These hypotheses are based on previous research papers.
H1: Employees with an internal locus of control perform better than employees with an external locus of control.
I hypothesize that employees with an internal locus of control perform better than employees with an external locus of control. People with an internal locus of control have high expectancies of their ability to control events, and they attribute success or failure to themselves. Those with an external locus of control have low expectancies of control and attribute success or failure to external sources (Rotter, 1966).
Within the company where the survey is conducted the employees are responsible for selling extra’s to the customer. Internals should believe that their behaviour affect the likelihood of attaining the desired outcomes, the selling of extra’s.
The employees receive monetary incentives based on the sold extras and customer
satisfaction. Because internals are expected to hold greater expectancies that effort will lead to good performance and their performance to reward I expect that internals will perform better in this company.
This leads to assume that employees who have an internal locus of control will be able to sell more extra’s to the customer because they feel they have the ability and they are more solution oriented.
21
H2: Employees with high self-efficacy perform better than people with low self-efficacy.
I hypothesize that employees self-efficacy has a positive effect on their performance. Psychologist Albert Bandura (1986) has defined self-efficacy as one's belief in one's ability to succeed in specific situations. One's sense of self-efficacy can play a major role in how one approaches goals, tasks, and challenges.
The well-known theory argues that people with low self-efficacy were more likely to give up while people with higher self-efficacy increased their effort to complete the task (Stajkovic and Luthans, 1998; Philips and Gully, 1997; Randhawa, 2004; Gist, 1987; Barling and
Beattie, 2015)
There does exist a different view with regards to the effect of self-efficacy on performance, as it has been found that high self-efficacy led to overconfidence in one's abilities and the individual becomes less attentive and effortful and thus contributed less (Thompson, Tischner and Putka 2002).The hypothesis that will be tested in this thesis will be based on the well-known theory that people with higher self-efficacy perform better.
Figure 2: Self-efficacy
An overview of the hypotheses is given in figure 3. Figure 3: Overview
22
4. Research method
In this section the about the research method used will be elaborated. In order to answer the research question a survey was send out within the company’s Benelux division. In the first paragraph there will be more information about the company. In the second paragraph the research design will be elaborated. In the third paragraph the sample is described. Next there will be more information about how the variables are measures and finally the reliability of the measures are checked.
4.1 Background
In this paragraph the company where the research is performed is described. First there will be some company background information. Next some information about the kind of job of the employees in the sample and in the last paragraph there is information about the incentive system the company is using.
4.1.1 Company background
The survey was conducted in May 2015 within the Benelux division of a leading international provider of high-quality mobility Services Company. The Company is represented in more than 100 countries worldwide with approximately 2.000 stations. It maintains alliances with hotel industry, airlines and numerous service providers in the tourism sector. The long-term strategy is aimed at speedily continuing its international expansion, maintaining a consequent focus on strong earnings and achieving a sustained increase in its enterprise value. Initial entry into the organization was through my job at the finance department.
4.1.2 Rental sales agents
The survey population consists out of the rental sales agents, branch managers, trainees, supervisors and interns who are working in the Benelux. Rental Sales Agents are responsible for optimizing the rental experience by selling extras based on the customer’s needs, drafting rental agreements, and providing customer service. Rental Sales Agents will be incentivized and evaluated on predetermined service and sales goals and standards. We strive to meet our customers’ needs and exceed their expectations on every opportunity.
23 4.1.3 Control of rental sales agents
To ensure that the actions the rental sales agents take are in accordance with their own interest and the interest of the company, the company makes use of results controls. Rental Sales Agents are evaluated and incentivised based on predetermined service and sales goals and standards. To measure the performance Rental Sales Agents the organization have set up an incremental sales-concept. The concept is based on two financial performance measures. The Incremental Revenue per Day (RPD) at Check Out and the Incremental Revenue at Check out. The Incremental revenue per Day at Check Out is calculated by dividing the additional revenues through personal sales of extras in the drafting of the lease by the number of all personally generated rental days, independently if there was sale possible or not. The Incremental revenue at Checkout is defined as the additional sales in the drafting up the lease or the additional sales generated afterwards. Here counting only the personally realized sales, revenues from reservation are not included. Furthermore, only a short rental periods are taken into account.
The following products are subject to the sold charges: damage coverage, people coverage, theft coverage, moving supplies, additional driver, choice upgrade, navigation, diesel, automatic and winter tires.
Only using financial performance measures had its limitations as mentioned in chapter two. When calculating the monetary incentives that the employees receive a non-financial performance measure is also taking into account, namely the customer satisfaction. The customer satisfaction index is determined based of the results of the branch ranking where the employee was employed in that month. The customer satisfaction index is used as a bonus multiplier. By taking customer satisfaction also into account when incentivising the
employees there is also a focus on the long-term strategy, because satisfied customer are more likely to come back to the company.
4.2 Research design
In this paragraph the research design is further explained
In order the answer the research question, the hypothesis created in the previous section must be tested. An online survey was used that respondents can fill out individually. There are several reasons to choose this method. The respondents have the freedom to determine when and if, within a certain time limit to answer the questions. In addition, it takes less time than if the questionnaire was done face-to-face. Finally, the online survey offers the possibility to
24 reach a large group of respondents relatively easy. The survey was not only for employees in the Netherlands but also in Belgium and Luxembourg, these employees were easier to reach with a survey. By using a survey the respondents could answer the question anonymously. The respondents could complete the questionnaire in their own environment, which will make it less likely that they give socially desirable responses.
The respondents could fill out the survey for eleven days. A reminder was send out after seven days and the Manager of Sales performance also reminded the employees to fill out the survey. No incentives were provided.
The survey question where approved by the Manager of Sales Performance Benelux. The survey question where pre-tested by colleagues who did not participate in the survey to assess whether the question would be correctly understood by the respondents.
4.3 Sample
In this paragraph the sample will be described.
This survey population consists out of 128 employees. They could fill in the survey for 11 days. The sample consisted of Dutch speaking employees and French speaking employees. Before the survey started the employees could choose if they wanted to answer in Dutch or in English. So there it is possible that employees had to fill in the survey not in their mother tongue and maybe not understood the questions as well as they would in their mother tongue.
The introduction of the survey explained the purpose of the research and anonymity was promised. Reminders were send in order to get as many responses as possible. In the end 56 employees filled out the survey. Four people have opted out of the survey, the rest didn’t fill out the survey. This means the response rate was 44%. According to Sauermann and Roach (2013) online surveys often exhibit a low response rate of around 10%-25%. The response rate of 44% is higher using the same method. This can probably be explained because of the connection with the company and because the manager explained the importance of the survey to the employees.
To test whether the respondents are systematically differing from non-respondents am non-response analysis was performed. The most common type of non-response analysis in management accounting was used, namely a comparison of early vs. late respondents (van der Stede, 2005).
25 The respondents were separated into early respondents group and late respondents group based on the mean of the response date. A t-test was used to check for significant differences in variable scores between early and late respondents, but there were no significant
differences.
The respondents where for 50% male (M=1,5; SD=,505), with a mean of 4,27 years of experience at the company (M=4,27; SD=4,288). The employees are on average 30 years old (M=30,07; SD=7,216). Most of the employees work full-time (M=39,11; SD=6,951). And most of the employees have finished a MBO/ASBO/BSO education. See below for the graphs of the descriptives regarding the demographics and table 1 below for sample descriptive regarding the demographics.
Graph 1: Age 0 1 2 3 4 5 6 7 8 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 40 41 42 50 51
Age
26 Graph 2: Education
Table 1: Demographics of participating employees
Variable Level N % Gender Male 28 50 Female 28 50 Country NL 38 67,9 BE 14 25 LUX 4 7,1 Age 20-29 31 56,4 30-39 17 30,9 40-49 4 7,3 50+ 3 5,5 Completed education Primary school 2 3,6 VMBO/MAVO/VBO 8 14,3 HAVO/VWO/ASO/KSO/TSO 7 12,5 MBO/ASBO/BSO 19 33,9 HBO/HOBU/Bachelor or higher 16 28,6 Other 4 7,1 Part-time/Fulltime Part-time 7 12,5 Fulltime 49 87,5 Work tenure 0-2 29 52,7 3-5 8 14,5 6+ 18 32,7 4% 14% 12% 34% 29% 7%
Education
Primariy school VMBO/MAVO/VBO HAVO/VWO/ASO/KSO/TSO MBO/ASBO/BSO HBO/HOBU/Professionele bachelor or higher Other27 4.4 Measurement
In this paragraph the scales used for measuring the constructs employed in this research have been described. I used one performance measure and two personality measures.
4.4.1 Performance measure
To measure the performance of the branches in the Benelux they have set up an
incremental sales-concept. Rental sales agents, Branch managers, Trainee, Supervisors and interns get rewarded based on their personal successes. The concept is based on two
parameters. The Incremental Revenue per Day (RPD) at Check Out and the Incremental Revenue at Check out. These measures focus on the sold charges when drawing up the rental contract or by means of an addition to an existing rental contract. The following products are subject to the sold charges: damage coverage, people coverage, theft coverage, moving supplies, additional driver, choice upgrade, navigation, diesel, automatic and winter tires.
Because per branch it differs how many rental contract are set up. I will use the Incremental revenue at check divided by the number of rental contract measures to the performance of the employees.
4.4.2 Locus of control
The LOC measure is constructed using ten statements based on Rotter (1966) scale. Rotter’s scale is the most widely used instrument to measure locus of control (Spector, 1982). The Rotter measure is very general because the items cross different domains like education, work, politics and life in general. On recommendation of Phares (1976) I have chosen statements that best fitted the survey population. I have also changed the statements a bit, so they fit the working environment of the survey population. The respondents selected from a 7-point Likert scale to indicate their level of agreement (Likert, R., 1932) with the statements.
The full range of a sample’s locus of control is used to examine the linear relationship between locus of control and performance. To calculate the overall score of locus of control the questions that measured the external locus of control were first recoded. After that the average score of the five internal locus of control questions and the five recoded external locus of control questions were calculated. If employees have a low locus of control score this indicates an external locus of control, if employees score high this indicates an internal locus of control.
28 By using this strategy to describe locus of control, forming distinct internal-external subgroups were avoided. This strategy is consistent with Rotter’s (1975) belief that the typical range of a samples score on his locus of control scale approximates a normal vs. a bimodal distribution.
4.4.3 Self-efficacy
The Self-efficacy measure is constructed using eight statements from Chen, Gully and Eden (2001), with respondents selecting from a 7-point Likert scale to indicate their level of agreement (Likert, R., 1932). I used the statements from Chen, et al. (2001) because it is one of the most recent self-efficacy scales. They focused on the construct validity, reliability, and factor structure of the responses to the items on the measures. It has now been cited by 1164 journals.
To calculate the overall score on Self-efficacy I have taken the average score of the eight statements that addressed one’s judgments of their capabilities to organize and execute courses of action required to attain designated types of performance.
4.5 Reliability
In this paragraph the reliability of the personality measures is elaborated.
The reliability analysis was done by calculating Cronbach Alpha, which is the most common measure of scale reliability (Field, 2013), to test the internal consistency of the variables locus of control and Self-efficacy. It has a value between 0 and 1, with higher scores indicating higher levels of reliability. A rule of thumb is that alpha should be at least ,5 and preferably above ,7 to have a reliable measure. The Cronbach Alpha for locus of control was found to be ,644. This could be improved by eliminating an item, but only to ,656. Given this minimal improvement, I have chosen not to eliminate any items.
The Cronbach Alpha for self-efficacy was found to be ,834. This could be improved by eliminating an item to ,841. Given the already high value I found that there is no need to do this.
Table 2: Cronbach’s Alpha
Concept Items of scale Cronbach’s Alpha
Locus of control 10 ,644
29
5. Results
In this section results of the research will be elaborated. In the first paragraph the
descriptive statistics will be shown. In the second paragraph the bivariate correlations will be shown. In the third paragraph a preliminary analysis will be performed. And in the last paragraph the hypotheses will be tested.
5.1 Descriptive statistics
In this paragraph the descriptive statistics will be shown.
Table 3 provides descriptive information on the independent and dependent variables. The mean of performance is 25,36 and the standard deviation is 12,7. Which is large considering the mean. There seems to be a lot of variance between performances of the employees.
The mean of locus of control is 4,47 with a small standard deviation of ,78. The mean of locus of control of above the theoretical mean of 4, which indicates that the employees have a little more internal locus of control. The mean for self-efficacy is 5,54 with a small standard deviation of ,66. The mean of self-efficacy is above the theoretical mean of 4, which indicates that the employees have the confidence in their ability to succeed. The minimum of self-efficacy is even on the theoretical mean of 4. This means that all employees have a relatively high self-efficacy.
Table 3: Descriptive statistics
Observations Minimum Maximum Mean Std. Deviation
Performance 56 2,88 64,44 25,36 12,70
Locus of control 56 2,44 6,20 4,47 ,78
Self-efficacy 56 4 7 5,54 ,66
5.2 Bivariate correlations
In this paragraph the bivariate correlations will be shown.
Table 4 reports the bivariate correlations among our main measures. There are a few variables that correlate with performance. First is country, there is a positively association between the country and performance, r = ,326, p = -,014. This might indicate that culture plays a role in performance. There is also a negative association between FTE and
30 positively associated with performance, r = ,315, p = ,018. But my prediction regarding self-efficacy is not supported by the correlation table. What must be noted is that the correlation between self-efficacy and performance, although it is not significant, is negative. This might indicate that high self-efficacy does lead to overconfidence. There is no significant correlation between locus of control and self-efficacy. Which is surprisingly they share strong
similarities. Individuals who judge themselves as capable of performing well (Self-efficacy) should see themselves as having control of their environment (Locus of control). But that is maybe due because they differ in one important respect. Self-efficacy pertains to confidence with respect to actions or behaviours, whereas locus of control is more concerned with confidence in being able to control outcomes (Judge, Locke, Durham and Kluger, 1998).
Table 4: Bivariate correlations
Gender Country Age Highest
edu
Tenure FTE SE LOC Perf
Gender ,164 -,295* ,212 -,341* -,518** -,016 ,127 ,210 (,226) (,029) (,117) (,011) (,000) (,910) (,350) (,120) Country ,173 -,058 ,206 -,210 ,165 -,039 ,240 ,326* (,201) (,675) (,127) (,123) (,224) (,775) (,075) (,014) Age -,270* -,109 -,257 ,631** ,170 ,165 ,165 -,126 (,046) (,428) (,058) (,000) (,216) (,228) (,230) (,361) Highest edu ,241 ,160 -,308* -,467** -,084 ,002 ,168 ,219 (,073) (,238) (,022) (,000) (,536) (,988) (,215) (,105) Tenure -,322* -,207 ,737** -,531** ,088 ,068 -,118 -,214 (,016) (,130) (,000) (,000) (,524) (,623) (,392) (,116) FTE -,436** ,087 ,307* -,156 ,129 ,214 -,013 -,272* (,001) (,525) (,023) (,252) (,349) (,113) (,921) (,042) SE -,044 -,086 ,106 -,009 ,036 ,254 ,225 -,024 (,745) (,530) (,439) (,948) (,793) (,059) (,096) (,860) LOC ,137 ,180 ,139 ,132 -,061 -,042 ,257 ,315* (,314) (,183) (,312) (,330) (,658) (,761) (,056) (,018) Perf ,212 ,170 -,210 ,155 -,096 -,170 ,012 ,255 (,117) (,210) (,124) (,254) (,487) (,210) (,933) (,058)
Pearson correlations appear below the diagonal, non-parametric Spearman correlations appear above the diagonal
* Correlation is significant at the 0,05 level (2-tailed).*
31 5.3 Preliminary analysis
In this paragraph the preliminary analysis will be performed.
A factor analysis will be utilized in order to examine if any variables should be excluded for the final constructs in the analysis. First, a preliminary analysis will be conducted to tests if the sample is suitable for a factor analysis. Second, factors will be extracted and presented.
The factor analysis is used to see if different items indeed reflect different underlying factors, as they should. However locus of control and self-efficacy share strong similarities. Individuals who judge themselves as capable of performing well (Self-efficacy) should see themselves as having control of their environment (Locus of control) (Judge, Locke, Durham and Kluger, 1998). The factor analysis will show if there are two different underlying factors that explain the item scores, or if instead there is only one factor or there are more than two. In addition, the rotated factor matrix shows if all the items really belong to the construct that they are supposed to reflect and do not fit better with some other construct.
To ensure a good factor analysis, Field (2005) suggests that several correlations should be above .3. The correlation matrix (appendix C) was therefore scanned, and this requirement was satisfied. Next the correlation matrix was scanned for correlation above .9, this were not found, none of the variables correlate perfectly. To conclude it was not necessary to eliminate any of the variables.
The Keiser-Meyer-Olkin (KMO) measure tests whether the partial correlation among variables are small. The minimum criterion is ,5 (Field, 2005). In this case the KMO for all the variables is ,612, which is mediocre.
Bartless’s measure tests the null hypothesis that the original correlation matrix is an identity matrix (Field, 2005). In this case the test is significant (p = ,000 < p = ,001).
A principal axis factor analysis was conducted on the 18 items with oblique rotation. An initial analysis was run to obtain eigenvalues for each factor in the data. 5 factors had
eigenvalues over Kaiser’s criterion of 1 and in combination explained 65,46% of the variance. The scree plot (Appendix D) was ambiguous and showed inflexions that would justify either 3 or 5 factors. In this case I retain 3 variables in my thesis namely locus of control and self-efficacy, but locus of control could be split into internal locus of control and external locus of control what gives us three variables.
32 Table 5 shows the factor loadings after rotations. The items that cluster on the same factor suggest that factor 1 is self-efficacy, factor 2 is locus of control and factor 3 external locus of control. Because locus of control and self-efficacy are closely aligned the table shows that there is not a very clear division between the factors.
33 Table 5: Rotated factor Matrix
1 2 3 4 5
Self-efficacy: Even when things are though I can perform quite well
,868 ,115 -,102 -,094 -,059 Self-efficacy: When facing difficult tasks, I am
certain that I will accomplish them
,767 ,184 -,059
,141 ,065 Self-efficacy: I am confident that I can perform
effectively on many different tasks
,765 ,054 -,180
-,101
,079 Self-efficacy: I will be able to successfully
overcome many challenges
,747 ,183 ,002 ,013 ,254 Internal locus: When I make plans, I am
almost certain I can make them work
,504 ,458 -,026
,202 ,061 Self-efficacy: I will be able to achieve most of
the goals that I have set for myself
,453 ,434 ,021 ,142 ,326 Self-efficacy: Compared to other people, I can
do most tasks very well
,416 ,030 -,024
,158 ,338 External locus: Many of the unhappy thins in
people’s lives are partly due to back luck
-,077 -,880 -,112 ,325 ,025 Internal locus: Becoming a success is a matter
of hard work; luck has little or nothing to do with it
,064 ,482 ,439 -,107
,097
Internal locus: In my case, getting what I want has little to do with luck
,221 ,466 -,057
,136 ,084 Self-efficacy: In general, I think that I can
obtain outcomes that are important to me
,302 ,336 ,135 -,091
,110 Internal locus: In the long run, people get the
respect they deserve in this world
-,004
,203 ,800 -,114
,306 External locus: Unfortunately, an individual's
worth often passes unrecognized no matter how hard he tries
,176 ,042 -,626
,156 ,130
Internal locus: What happens to me is of my own doing
-,065
,003 ,610 ,091 ,008 External locus: Who gets promoted often
depends on who was lucky enough to be in the right place first
,057 -,061 -,091 ,661 -,038 External locus: Most people do not realize the
extent to which their lives are controlled by accidental happenings
,046
-,248
,114 ,616 -,175 External locus: Many times I felt I have little
influence over the things that happen to me
-,025
,128
-,088
,512 ,052
Self-efficacy: I believe I can succeed at most any endeavour to which I set my mind
,227 ,144 ,132 -,223
,825
