To what extent do the three Work Related Basic Needs mediate the direct
effect between Employee Perception of Performance Management
Effectiveness and the degree of Autonomous Motivation?
BY
Hylkje Terpstra S2729474
University of Groningen Faculty of Economics and Business
MSc Business Administration Management Accounting & Control
Supervisor: W. G. de Munnik
Abstract
TABLE OF CONTENT
1. Introduction 4
2. Literature review 6
2.1. Employee Perception of Performance Management Effectiveness 6
2.2. Autonomous Motivation 7
2.3. Work Related Basic Needs 10
2.4. Conceptual Model 13
3. Methodology 14
3.1. Data collection and sample 14
3.2. Measurement of Variables 14 3.2.1. Independent Variable 14 3.2.2. Dependent Variables 15 3.2.3. Control Variables 15 3.3. Regression Model 17 4. Results 19 4.1. Direct Effect 20 4.2. Autonomy 22 4.3. Competence 24 4.4. Relatedness 26
4.5. Total Satisfaction of Work Related Basic Needs 28
1. Introduction
In management accounting literature, a lot of focus has been set on designing and implementing management control systems. Designing performance management systems from organizational perspective has been extensively studied, but these are still not always perceived as being effective by employees (Sharma, Sharma, & Agarwal, 2016). According to Otley & Berry (1980), the three primary objectives of management control are goal alignment, adaptability and integration. These three objectives can help in achieving an effective management performance system, which are crucial for organizations in order to be successful (Blizzard, 2014; Cooke, 2008), and can lead to long term outcomes for a firm, including motivation of employees (Selden & Sowa, 2011; Kuvaas, 2006). When an employee is autonomously motivated, meaning to feel motivated because of the activity itself and the free choice to engage in this activity, this increases important personal outcomes like vitality, affective commitment, performance, personal initiative, effort, but also the possibility of emotional exhaustion. (Gagne et al., 2015).
It is important to keep in mind that the effectiveness of the performance management system can be perceived different when looking from an organizational perspective, compared to the perception of effectiveness from the employees. An understanding of the employee’s perception can help in creating and implementing performance management systems that are acceptable for the employees and the organization (Sharma et al., 2016). This can lead to a performance management system that involves all employees in working together, to pursue the right objectives in the right way for everyone in the organization. This change in focus, from design to perception, can yield rich insights and is widely suggested to take into account in future research (Sharma et al., 2016). Next to that, the increase in knowledge about employee perceptions can be used by managers and organization to identify and correct shortcomings in their current use and design of performance management systems.
effectiveness is at a standstill. They state that previous research has been based on concepts that do not exist, are hard to measure or not properly defined. One of these concepts is the perception of employees regarding performance management system effectiveness. Biron, Farndale and Paauwe (2011) also stated that employee perception of performance management system effectiveness has until so far not been adequately conceptualized and operationalized. Next to that, this study will delve deeper in a possible relation between the employee perception of performance management effectiveness and autonomous motivation. The concept of autonomous motivation is widely studied with regards to the Self-Determination Theory. Here, three basic needs are constructed that need to be satisfied in order for an individual to be autonomously motivated (Gagne & Deci, 2005). Therefore, this study will take the three basic needs in account, to find out if these concepts mediate the effect between the employee perception of performance management effectiveness and the degree of autonomous motivation of that employee. From this, the following research question arises:
To what extent do the three Work Related Basic Needs mediate the direct effect between Employee Perception of Performance Management Effectiveness and the degree of Autonomous
2. Literature review
2.1. Perception of Performance Management Effectiveness
As previously said, Performance Management and Performance Management systems are widely studied concepts with various definitions attached to it. For example, DeNisi (2000) defines performance management as a set of activities that is adopted by an organization in order to enhance the performance of their employees. To manage the performance of their employees, organizations develop performance management systems or processes that motivate employees (Selden & Sowa, 2011). Den Hartog, Boselie and Paaiwe (2004) state that the goal of a performance management system is to align performance of individuals with organizational performance. This makes that the process should inform employees about the goals, priorities and expectations of the organization, and to what extent an employee can contribute to this. This is also in line with the definition of Management Control as presented by Otley and Berry (1980): “Those procedures which act to maintain viability through goal achievement, those concerned with the coordination and integration of differentiated parts, and those which promote adaptation to both internal and external change.” Next to this, Otley and Berry (1980) find that Management Control is aimed at increasing three main objectives: goal alignment, adaptability and integration. Goal alignment indicates the aim for predictable and efficient achievement of organizational goals (Simons, 1995), adaptability refers to the way organizations respond to changes in external environment and flexibility (Simons, 1995), and integration relates to the coordination amongst different parts of an organization to achieve shared objectives (Barkiri & Pinsonneault, 2005).
objectives. Cohen (1993) adds to this that effectiveness is always context specific, meaning that in different contexts the effectiveness of a system varies.
Sharma et al. (2016) mention that a performance management system can’t be seen as effective, unless employees respond to this system in the way they are expected to do. In addition to this, when looking at the core elements of a PMS, where goal alignment is one of the biggest achievements, it is also important to look at the employee perspective. It is important for an organization to keep in mind individual employees do not always react to signals in the same way as another, or as they are expected to. (Ilgen et al., 1979). Because of this, it is of great importance that a firm takes into account how employees can respond to certain performance management systems (Selden & Sowa, 2011). Also, Guest (1999) suggests that the impact of performance management, and thus the effectiveness, depends on the perception of the employees. This leads to a crucial point for organizations: they need to understand their employees and the thoughts and experiences they have.
Concluding, Performance Management Effectiveness is an integrated process, which aims at setting goals, measuring and reviewing achieved goals and is providing continuous feedback from employee to organization and the other way around (Den Hartog et al., 2004).
2.2 Autonomous Motivation
The Self Determination Theory (hereafter: SDT) distinguishes motivation in two types: autonomous motivation and controlled motivation. Both types of motivation are intentional, and contrast with amotivation (Gagne & Deci, 2005). Autonomous motivation includes individuals that experience to have a choice whether to engage in an activity or not, it involves acting with a sense of free will. Intrinsic motivation, which is defined as doing an activity because it is interesting and enjoyable, is an example of autonomous motivation. In this case, individuals act wholly volitionally (Gagne & Deci, 2005).
regulated. (Ryan, 1995). In line with this, Gagne and Deci (2005) define internalization as: “people taking in values, attitudes, or regulatory structures, such that the external regulation of a behavior is transformed into an internal regulation and thus no longer requires the presence of an external contingency.” They also mention that internalization is an overarching term, which refers to three different processes: introjection, identification and integration. In figure 1, the SDT continuum can be found to summarize the different types of motivation, and the degrees of internalization of extrinsic motivation.
Figure 1. The self-determination continuum (Gagne & Deci, 2005)
Introjected Regulation
Identified Regulation
When doing an activity because an individual identifies with its meaning, and accepts this meaning as his/her own, this contains identified regulation. With identified regulation, people act based on the meaning individuals perceive of this activity, related with their personal values (Koestner & Losier, 2002). Identified people feel greater freedom and volition, because they perceive the actions as compatible with their personal values and identity (Gagne & Deci, 2005)
Integrated Regulation
Integrated regulation is the fullest type of internalization of extrinsic motivation. It allows extrinsic motivation to be autonomous and involves the integration of an identification with another aspect of oneself, this can be values, interests or other identifications. People feel like the behavior is a part of who they are and is self-determined. (Gagne & Deci, 2005). In other words, people identify with the value of an activity, in a way that it becomes a part of the person’s self and habitual functioning (Gagne et al., 2010).
In short, integrated regulation is the most developed form of extrinsic motivation, and shares qualities with intrinsic motivation, which are both types of autonomous motivation. However, integrated regulation does not become intrinsic motivation since this type of motivation is not characterized by the person being interested in the activity, but by the activity being important for personal goals (Gagne & Deci, 2005). Looking back at the continuum as presented by Gagne and Deci (2005) in figure 1, the continuum is broken in the middle, where external regulation and introjected regulation represent controlled motivation. Identified regulation, integrated regulation and intrinsic motivation represent autonomous motivation (Gagne, Forest, Gilbert, Aube, Morin, & Malorni, 2010).
Employee perception of Performance Management Effectiveness and Autonomous Motivation
autonomously motivated. Next to this, an employee can also have the opportunity to make own decisions when firms have internal flexibility. This also enables the employee to internalize extrinsic motivation or being able to do more intrinsically motivated activities. Lastly, when an employee feels integrated in the organization, meaning that he feels involved and there is communication between different layers of the organization that try to achieve shared objectives, this also gives the opportunity to internalize extrinsic motivation.
In contrast to this, we assume that when someone feels his goals are not aligned with the organization, there is no room for own input or flexibility and he feels not integrated in the organization, most of the activities that are involved in his work will be done because of external factors, such as rewards or punishments, and thus will have a low degree of autonomous motivation. These assumptions lead to the following hypothesis.
H1: Perceived Performance Management Effectiveness is positively associated with the degree of Autonomous Motivation
2.3 Work Related Basic Needs
Next to the continuum for motivation, the SDT proposes three psychological needs, which have to be satisfied in order for individuals to thrive. These needs are autonomy, competence and relatedness. All these three needs are important for flourishing of the individual (van den Broeck, Vansteenkiste, de Witte, Soenens, & Lens, 2010). The satisfaction of these psychological needs is assumed to be an essential nutriment for optimal functioning and well-being and is often compared to biological needs (Deci & Ryan, 2000). Baumeister and Leary (1995) and White (1959) found that all individuals are likely to benefit from having the psychological basic needs satisfied, no matter the age group or different cultures of these individuals.
to be included in a group and to be loved and cared for (Baumeister & Leary, 1995). According to Deci and Ryan (2000), the need for relatedness is satisfied when people experience to be part of a community and develop relationships
Perception of Performance Management Effectiveness & Work Related Basic Needs
When an employee perceives a performance management system to be effective, this is likely to increase their feelings of competence, autonomy and relatedness. In the first place, when the performance management system is perceived as effective, the employee is most likely received feedback that is positively perceived. This feedback is beneficial for all employees, since it satisfies the need for competence (Mouratidis, Vansteenkiste, Lens & Sideridis, 2008). Next to this, the need for relatedness is also expected to be more satisfied when employees perceive the performance management system as effective. This because, one of the biggest focus of performance management systems is goal alignment (Otley & Berry, 1980). When an employee perceives the system as effective, they perceive most likely, the goals of the employee and the organization to be aligned. In this case, the employee might feel related to the company and other co-workers for sharing the same goals. Lastly, the need for autonomy is also likely to be satisfied when employees perceive the performance management system to be effective. When a PMS is effective, it should also be adaptable according to Otley and Berry (1980). This adaptability also means to focus on the feedback loops and input from employees, which enables them to make changes and make decisions that they personally favor. All the above combined, leads us to the following hypothesis:
H2: The degree of perceived Performance Management Effectiveness is positively associated with satisfaction of the Work Related Basic Needs
This hypothesis is split out in 3 sub-hypotheses, so that the satisfaction of the three Work-Related basic needs can be tested separately. The sub-hypotheses are:
H2b: The degree of perceived Performance Management Effectiveness is positively associated with satisfaction of the need for Competence
H2c: The degree of perceived Performance Management Effectiveness is positively associated with satisfaction of the need for Relatedness
Work related basic needs & Autonomous Motivation
According to Gagne and Deci (2005) and Van Den Broeck, Vansteenkiste, and De Witte (2008), autonomous motivation is conducted by the three basic needs. Gagne and Deci (2005) also found that intrinsic motivation, as well as integrated regulation are processes that require nutriments to function optimally. These nutriments are, according to the SDT, the three Work Related Basic Needs. From this assumption, four hypotheses are developed and will be explained in the following section.
Gagne and Deci (2005) state in their research that satisfaction of the need for competence and the need for autonomy determine intrinsic motivation. They state that people need to feel autonomous and competent in order to maintain intrinsically motivated. From this statement, hypothesis H3a and H3b are derived;
H3a: The level of satisfaction of the need for Autonomy is positively associated with the degree of Autonomous Motivation
H3b: The level of satisfaction of the need for Competence is positively associated with the degree of Autonomous Motivation
H3c: The level of satisfaction of the need for Relatedness is positively associated with the degree of Autonomous Motivation
Next to all basic needs separately, also the satisfaction of all three basic needs combined is assumed to influence autonomous motivation. Because they separately enable an individual to feel autonomous, related or competent, together also enhances individuals to internalize extrinsic motivation or fully enjoy intrinsic motivation (Gagne & Deci, 2005). This leads to the following hypothesis:
H3d: The level of satisfaction of the Work Related Basic Needs is positively associated with the degree of Autonomous Motivation
2.4. Conceptual Model
When combining all beforementioned hypothesis, the conceptual model as shown in figure 2 is conducted and can be seen below.
Figure 2. Conceptual model Employee Perception of Performance
Management Effectiveness Autonomous Motivation
Level of Satisfaction of the three Work Related Basic Needs
3. Methodology
3.1. Data collection and sample
The data for this research is collected from an existing database. The questionnaire that is used is constructed by combining several frameworks and validated existing instruments to measure the variables. These instruments will be elaborated later, when explaining how the variables are measured.
The questionnaire was completed by over 500 participants from 4 different higher professional educational organizations in the public sector. For this research, 250 respondents are taken into account, who are employed at two different institutions. The respondents are from different layers in the firm: management as well as supporting staff. In the dataset, one missing value arose, which lead to dismissal of 1 observant in this research. This leads to a total number of observations of 249 individuals.
3.2. Measurements of Variables
3.2.2. Dependent Variables. Autonomous Employee Motivation will be measured by the variable AUMOT. This measurement will be according to the Multidimensional Work Motivation Scale, as validated by Gagne et al. (2015). In this questionnaire, several questions were asked to rate each type of motivation as existing in the SDT continuum (figure 1) by Gagne and Deci (2005) in their framework, Gagne et al. (2015), did not include items for integration, since it has been difficult to psychometrically distinguish integration from identification. Because of this, the questions regarding identification and intrinsic motivation where rated on a scale of 1 (to an extremely low extent) to 7 (to an extremely high extent). These numbers are added up, and together make the degree of autonomous motivation of an individual.
Work Related Basic Needs will be measured according to the framework of Van den Broeck, Vansteenkiste, De Witte, Soenens and Lens (2010). In their framework a questionnaire is conducted with questions relating to each of the three basic needs. These questions where rated on a 5-point Likert scale, where 1 is the lowest degree of satisfaction and 5 is the highest degree of satisfaction. 8 questions where reversed, these questions where transformed to measure in the same direction, and subsequently all variables matching one of the basic work needs need where added up. This formed the variables: autBN, comBN and relBN. Next to this, the variable totBN was conducted by adding up all scores from all questions regarding basic needs to calculate the total level of Work Related Basic Needs satisfaction.
categories: 1 = primary education, 2 = bachelor degree, 3 = master degree or higher, 4 = secondary education, 5 = secondary vocational education.
First, organizational structure (STRUCT) will be measured by combining five variables that reflect the continuum from mechanistic to organic (Burns & Stalker, 1961), and are derived from several previous researches (Chenhall and Morris, 1995; Covin, Slevin and Heeley, 2001; Leifer and Huber, 1977). All variables are measured on a 7-point Likert scale where 1 is closest to mechanic and 7 is closest to organic. Subjects of the variables are communication of control information, accessibility of operational information, communication between managers and subordinates, operating management philosophy towards formality and operating management philosophy towards specialization and initiative.
Second, strategy is measured according to the research of Bedford and Malmi (2015). They state that strategic planning involves long term goals, expectations and courses of action (Langfield-Smith, 2008). In their research, strategy is divided in three categories: low cost (emphasis on cost and efficiency operations, results in competition through low price; Chenhall, 2005), Innovation (differentiation through new products; Ittner et al., 2003) and Customer Focus (differentiation through customization and flexible response to demands; Chenhall and Langfield-Smith, 1998). These categories result in respectively STRATlc, STRATin and STRATcu.
3.3. Regression Model
To test the relation between Employee Perception of Performance Management Effectiveness and Autonomous Motivation, and the mediating effect of the three Work Related Basic Needs a linear regression and Process Model 4, as conducted by Hayes (2012) is used. This model can be used to test a simple mediation effect. Every basic need will be tested individually as mediator, as well as all the basic needs combined. This leads to 4 analysis. Previous to this, all measurement variables will be tested if they reach the Cronbach Alpha criterium and accordingly, the variables are checked for multicollinearity using a correlation analysis. In table 1, all the variables used in the tests are described.
TABLE 1
Description of Variables Name
variable
Proxy Measurement
PPME Employee Perception of Performance Management Effectiveness
7-point Likert scale, where 1 is “to an extremely low extent” and 7 is “ to an extremely high extent”.
AUMOT Level of Autonomous
Employee Motivation
7-point Likert scale, where 1 = “not at all and” 7 = “completely/entirely”.
BNaut Degree of satisfaction of Autonomy
5-point Likert scale, were 1 = “totally disagree” and 5 = “totally agree”.
BNcom Degree of satisfaction of Competence
5-point Likert scale, were 1 = “totally disagree” and 5 = “totally agree”.
BNrel Degree of satisfaction of Relatedness
5-point Likert scale, were 1 = “totally disagree” and 5 = “totally agree”.
BNtot Degree of total satisfaction Work Related Basic needs
Name variable
Proxy Measurement
STRUCT Level of Organizational Structure
7-point Likert scale, were 1 is closest to mechanic structure and 7 is closest to organic structure.
CULTflex Level of Organizational Culture – Flexibility
7-point Likert scale, where 1 is “to an extremely low extent” and 7 is “ to an extremely high extent”, added up scores of group and development culture.
CULTcon Level of Organizational Culture – Control
7-point Likert scale, where 1 is “to an extremely low extent” and 7 is “ to an extremely high extent”, added up scores of hierarchical and rational culture.
STRATlc Level of low-cost Strategy 7-point Likert scale, where 1 is “extremely low emphasis” and 7 is “extremely high emphasis”, added up scores of low-cost Strategy.
STRATin Level of innovation Strategy 7-point Likert scale, where 1 is “extremely low emphasis” and 7 is “extremely high emphasis”, added up scores of innovation Strategy. STRATcu Level of customer focus
Strategy
7-point Likert scale, where 1 is “extremely low emphasis” and 7 is “extremely high emphasis”, added up scores of customer focus Strategy. GEN Gender of respondent 1 = Female, 2 = Male
AGE Age of respondent Age in years
4. Results
First the Cronbach Alpha of all variables was tested, to make sure the measurement of the variables is reliable. From these tests, only the measurements of BNcom, STRUCT, CULTcon and STRATlc did in the first place not exceed the 0.7 boundary. BNcom had a Cronbach Alpha of 0,531 but when leaving out one sub question, this value increased to 0.822. Because of this, that sub question is also left out in calculating the BNtot, which leaves here a new Cronbach Alpha of 0.88. The Cronbach Alpha of STRUCT gives a value of 0,695 which does not officially pass the reliability boundary, but for exploratory research a value between 0.6 and 0.7 is acceptable, therefore STRUCT is still taken into account in this study. CULTcon, on the other hand shows a Cronbach Alpha of 0,245 and is therefore left out of these analysis. STRATlc showed a Cronbach alpha of 0.697, but when leaving one sub question out, this value increases to 0.862. Because of this increase, the value of that sub question is left of out this analysis, and STRATlc will be measured by only two sub questions instead of three.
When interpreting the correlation analysis, we see that amongst the three Work Related Basic Needs, some significantly high correlations occur. This is particularly the case with the total satisfaction of the Work Related Basic needs combined with one of the separate needs. This can be explained by the fact that the total satisfaction variable is conducted by adding up the independent satisfaction of the different Work Related Basic Needs.
***, ** and * coefficients are statistically significant at 1, 5, and 10 percent, respectively (based on two-sided testing)
4.1. Direct effect
TABLE 3
Regression Results “Direct Effect”
Variable 1 2 Constant 26,391*** 27,423*** pPME - -0,155** CULTflex 0,309*** 0,330*** STRUCT -0,068 -0,053 STRATlc -0,004 0,013 STRATin 0,173 0,218* STRATcu -0,061 -0,032 AGE 0,030 0,031 GEN -0,511 -0,852 EDB -0,452 -0,406 Adjusted R-square 0,101 0,151 F-value 4,477*** 4,722***
4.2. Autonomy
In table 4, the process analysis as presented by Hayes (2012) is performed, with as dependent variable autonomous motivation (AUMOT), the employee perception of performance management effectiveness (PPME) as independent variable and testing the satisfaction of the need for autonomy (BNaut) as mediating variable. Also, the control variables are included in both tests. In the first column, the direct effect of employee perception of performance management effectiveness on the satisfaction of the need for autonomy is shown. In this test, there is a slightly negative effect (-0,022) found, but this is not found to be significant. In the second column, the mediation effect is tested. In this column, we see that the effect of employee perception of performance management effectiveness on autonomous motivation is negative (-0,144), and significant on the 5%-level. Next to this, the satisfaction of the basic need for Autonomy shows a highly significant, positive effect on the level of autonomous motivation (0,481).
Comparing the control variables in both models, we see that the structure of a company changed from a highly significant positive effect, to a negative significant effect. The flexible culture of a company was, in the first column positively and significantly related. In the second column, this effect slightly increases and stays highly significant. Looking at the strategy, low-cost and innovation strategy both show in the first column a small negative effect, which changes in the second column to a small positive effect, but only the low cost strategy shows a significant positive effect (0.253**). The customer focus strategy, on the other hand, is in the first column found to be positively correlated and significant at the 10% level, but in the second column this changes to a negative value and loses its significance. Age, gender and educational background show no significant results.
The indirect effect of this mediation as tested according to the model of Hayes (2012) shows no significant effect, and therefore BNaut cannot be seen as mediating variable.
TABLE 4
Regression Results “AUTONOMY”
Variable (1=BNaut) (2=AUMOT)
Constant 9,606*** 22,803*** pPME -0,022 -0,144** BNaut - 0,481*** CULTflex 0,191*** 0,238*** STRUCT 0,28*** -0,177*** STRATlc -0,128 0,074 STRATin -0,074 0,253** STRATcu 0,135* -0,097 AGE -0,006 0,034 GEN -0,157 -0,777 EDB 0,297 -0,549 Adjusted R-square 0.422 0,252 F-value 19,39*** 8,004*** Indirect Effect -0,011
4.3. Competence
Next, again the process analysis as presented by Hayes (2012) is performed, and the results are shown in Table 5. Here, the dependent variable is again autonomous motivation (AUMOT), the employee perception of performance management effectiveness (PPME) as independent variable and testing the satisfaction of the need for competence (BNcom) as mediating variable. Also, the control variables are included in both tests. In the first column, the direct effect of employee perception of performance management effectiveness on the satisfaction of the need for competence is shown. Here, a small positive, but not significant effect is shown. Secondly, we look at the mediation effect. The second column shows a significant negative direct effect (-0,157**) of employee perception of performance management effectiveness on the level of autonomous motivation. Next to this, the effect of the satisfaction of the need for Competence shows a highly significant, positive effect on the level autonomous motivation (0.581***).
Comparing the control variables in both models, we see that the flexible culture of a company shows a small positive significant effect (0,095**) in the first column, but increases in impact and significance in the second column (0,275***). The structure of a company shows no significant results, just as the strategy of the company. Only the innovative strategy in the second column shows a small significant positive effect (0,226*). Age shows, in the both columns, a very small, positive effect, but not significant. Gender shows a negative, not significant effect in both columns and educational background is also not found to be significant, and shows in the first column a positive effect, and in the second column a negative effect.
The indirect effect of this mediation as tested according to the model of Hayes (2012) shows no significant effect, and therefore BNcom cannot be seen as mediating variable.
TABLE 5
Regression Results “COMPETENCE”
Variable (1=BNcom) (2=AUMOT)
Constant 17,893*** 17,034*** pPME 0,004 -0,157** BNcom - 0.581*** CULTflex 0,095** 0,275*** STRUCT 0,008 -0,058 lcSTRAT -0,054 0,044 inSTRAT -0,014 0,226* cuSTRAT -0,026 -0,018 AGE 0,027 0,016 GEN -0,573 -0,52 EDB 0,301 -0,58 Adjusted R-square 0,065 0,232 F-value 1,841* 7,1998*** Indirect Effect 0,002
4.4. Relatedness
Table 6 shows the results regarding the process analysis as (Hayes, 2012) that is performed, to test the direct relation between the employee perception of performance management effectiveness (PPME) and the level of autonomous motivation (AUMOT), and the mediation effect of the satisfaction of the need for relatedness (BNrel). Next to these dependent and independent variables, the control variables are included in both tests. The direct effect of employee perception of performance management effectiveness on the satisfaction of the need for relatedness is shown in the first column. These results show a small negative, but not significant effect. The second column shows a negative, significant direct effect of employee perception of performance management effectiveness on the level of autonomous motivation (-0,154**). Next to this, the effect of the satisfaction of the need for Relatedness shows a highly significant, positive effect on the level autonomous motivation (0,319***).
Comparing the control variables in both models, flexible culture shows a highly significant positive effect. In the second column, this effect is decreasing a little, but stays significant and positive. Looking at the structure and strategy, no significant relations are found. Except the innovative strategy in the second column, shows a positive significant effect on the 10%-level. Age, gender and educational background show no significant results.
The indirect effect of this mediation as tested according to the model of Hayes (2012) shows no significant effect, and therefore BNrel cannot be seen as mediating variable.
TABLE 6
Regression Results “RELATEDNESS”
Variable (1=BNrel) (2=AUMOT)
Constant 12,639*** 23,397*** pPME -0,003 -0,154** BNrel - 0,319*** CULTflex 0,34*** 0,222*** STRUCT 0,049 -0,069 lcSTRAT 0,008 0,01 inSTRAT 0,057 0,199* cuSTRAT -0,019 -0,026 AGE 0,004 0,03 GEN -0,771 -0,607 EDB -0,066 -0,385 Adjusted R-square 0,33 0,194 F-value 13,078*** 5,709*** Indirect Effect -0,001
4.5. Total Satisfaction of Work Related Basic Needs
Table 7 shows the data resulting from the process analysis as proposed by Hayes (2012), to test a simple mediation (model 4). In this table, the results from the direct effect of employee perception of performance management effectiveness (PPME) on autonomous motivation (AUMOT) will be shown, and the mediation effect of the total level of satisfaction of all three Work Related Basic Needs (BNtot) is analyzed. The first column shows the direct effect of PPME on BNtot. Here we find a small negative effect, but this effect is not found to be significant. The second column shows in the first place the direct effect of PPME on AUMOT, which is negative and significant at the 5%-level (-0,148**). The influence of BNtot on AUMOT is found to be positive and very significant (0,313***)
Looking at the control variables taken into account while performing this analysis, we see that structure (0,315***) and flexible culture (0,626***) have a positive and highly significant effect when examining the relation between PPME and BNtot. These effects reduce when testing the mediation effect, CULTflex shows a less positive, and less significant effect (0,134*) and STRUCT shows a negative effect at 5%-significance level (-0,152**). Looking at the strategy, only STRATin shows a significant positive effect in the second column (0,228**). Age, gender and educational background, again show no significant effects.
The indirect effect of this mediation as tested according to the model of Hayes (2012) shows no significant effect, and therefore BNtot cannot be seen as mediating variable.
TABLE 7
Regression Results “TOTAL SATISFACTION”
Variable (1=BNtot) (2=AUMOT)
Constant 40,137*** 14,856*** pPME -0,021 -0,148** BNtot - 0,313*** CULTflex 0,626*** 0,134* STRUCT 0,315*** -0,152** lcSTRAT -0,174 -0,067 inSTRAT -0,031 0,228** cuSTRAT 0,09 -0,061 AGE 0,025 0,023 GEN -1,5 -0,382 EDB 0,531 -0,572 Adjusted R-square 0,435 0,392 F-value 20,421*** 10,303*** Indirect Effect -0,007
4.6. Additional analysis
Some additional analyses are performed in order to test differences between female and male respondents, and to compare outcomes when only employees without managerial tasks are taken into account. The results of these tests can be found in the appendix.
4.6.1. Gender comparison. When looking at table 8 until 12, the same analyses are performed as in the previous tests but here the distinction was made between female and male respondents. In all tables, the first two column represent the outcomes of the tests with only female respondents, the second two columns represent the outcomes of the tests with only male respondents. The most outstanding results from these analyses are that the directions of the effects are in the same direction, comparing female and male results. Next to this, in most cases, flexible culture keeps having a significant effect, just as the previous tests. What stands out most in these additional tests, is that for the female results of all mediation tests, the structure of the company in shows a highly significant, positive effect. When we compare this to the male results, structure only shows a small significant (at respectively 10% and 5% level) positive effect when testing the mediation of respectively the need for autonomy and the need for competence. On the other hand, the strategy shows for females no significant effect, where in the male tests several significant results occur.
5. Discussion 5.1. Findings
In this research, the goal was to examine whether the employee perception of performance management effectiveness has an influence on the level of autonomous motivation of the employees, and to investigate whether the three Work Related Basic Needs have a mediating effect on the before mentioned relation. To answer the research questions as mentioned in the introduction, several hypotheses were conducted.
The second hypothesis reflects on the relation between the perception of performance system effectiveness on the satisfaction of the Work Related Basic Needs. From the results, all the hypothesis concerned with this relation where not supported. This means that there is no relation found between the employee perception of performance management effectiveness and the satisfaction of the three basic needs. The difficulty to measure the perception of employees might be one explanation for not finding evidence of this relation (Hamilton & Chervarny, 1981; Farndale & Paauwe, 2011), but next to that this might indicate that the perception of employees about the effectiveness of the performance management system might have no influence on the work environment itself, and thus does not enable the opportunity to satisfy the work related basic needs. This means that employees can perceive their performance management system as very effective, while his work environment is not giving the opportunity to satisfy the work related basic need.
Looking further at the third hypothesis and its sub-sections, we find H3a, H3b, H3c and H3d all supported with a high significance level. This means that there is a direct positive effect between the satisfaction of all three basic needs separately and combined on the degree of autonomous motivation. This is also in line with the theory of Gagne and Deci (2005), and previous research of Baumeister and Leary (1995). We find that the need for competence shows the highest direct effect, which means that when employees feel competent in their job, they are more likely to feel more autonomously motivated.
needs, only a very significant and already widely studied direct effect of all three Work related basic needs separately and combined on the degree of autonomous motivation.
In addition, separate from the suggested hypothesis, there were some additional results that showed significance and are interesting to highlight. In the first place, the flexible culture of the company shows in all analysis a positive, significant effect on all dependent variables. This means that when employees perceive the culture of a company to be flexible, they are more likely to satisfy their work related basic needs and have a higher degree of autonomous motivation. When looking at a flexible culture of an organization, Henri (2006) found that firms who emphasized flexibility use a diverse performance measurement system to focus attention and facilitate strategic decision making. These firms perceive the ability of their employees to react quickly and make strategic decisions of great importance. These firms are often adaptable, responsive and organic, and find beliefs system as a key role in management control systems (Heinicke et al., 2015). Because this culture emphasizes the autonomy, flexibility and responsiveness of employees, this positive relation on the three basic needs, and therefore also the degree of autonomous motivation can be explained.
Lastly, when comparing the results from non-manager employees with the results of all employees, we find that all results show the same direction only to a lesser degree. This can mean that managers are more able to satisfy their basic needs in the same working environment as non-manager employees. However, this difference can also be due to individual differences instead of the hierarchical level of their job.
5.2. Theoretical Implications
During this research, several theoretical implications showed their importance. First of all, since the definition and framework to measure the perception of employees on the effectiveness of a performance management system is hard to measure. Several researchers mention the difficulty to measure effectiveness, since this concept is dependent on different contextual factors (Farndale & Paauwe, 2011; Donaldson, 2001). This also encompasses a second implication. This research is mainly focused on the self-determination theory, since this includes tools to incorporate perceptions of individuals and the psychological side of decision-making processes (Gagne & Deci, 2005). However, taking into account other perspectives like the contingency theory might increase an understanding in how the design of a performance management system can help in increasing the perception of effectiveness by employees. In extent to that, that understanding can also help in constructing a valid tool to measure the perception of effectiveness of a system.
5.3. Limitations
5.4. Future Research
6. References
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7. Appendix
TABLE 8
Regression Results “Direct Effect GENDER”
Variable 1 (Female) 2 (Female) 3 (Male) 4 (Male)
Constant 27,976*** 28,173*** 24,453*** 24,91 pPME - -0,154 - -0,145* CULTflex 0,298*** 0.321*** 0,335*** 0,348*** STRUCT -0,1 -0,072 -0,049 -0,047 STRATlc -0,098 -0,03 0,069 0,047 STRATin 0,02 0,063 0,273 0,327* STRATcu -0,014 0,002 -0,094 -0,059 AGE 0,056 0,057 0,002 0,007 EDB -0,536 -0,532 -0,506 -0,399 Adjusted R-square 0,074 0,084 0,103 0,118 F-value 2,46** 2,464** 2,975*** 2,999***
TABLE 9
Regression Results “BNaut GENDER”
Variable (1=BNaut) (2=AUMOT) (3=BNaut) (4=AUMOT)
Gender Female Female Male Male
Constant 7,8945*** 24,572*** 9,967*** 19,494*** pPME 0,0623 -0,183* -0,083 -0,1 BNaut - 0,456*** - 0,544*** CULTflex 0,130* 0,262** 0,269** 0,202* STRUCT 0,3426*** -0,229** 0,134* -0,12 lcSTRAT -0,035 -0,014 -0,217 0,165 inSTRAT -0,111 0,114 0,035 0,308* cuSTRAT 0,005 -0,001 0,215** -0,176 AGE 0,008 -0,054 -0,003 0,009 EDB 0,539 -0,778 0,041 -0,421 Adjusted R-square 0,479 0,234 0,417 0,292 F-value 13,671*** 4,01*** 10,01*** 5,085*** Indirect Effect - 0,028 - -0,045
TABLE 10
Regression Results “BNcom GENDER”
Variable (1=BNcom) (2=AUMOT) (3=BNcom) (4=AUMOT)
Gender Female Female Male Male
Constant 7,8945*** 24,572*** 18,454*** 6,447 pPME 0,0623 -0,183* -0,002 -0,143* BNcom - 0,456*** - 1,001*** CULTflex 0,130* 0,262** 0,198*** 0,15 STRUCT 0,3426*** -0,229** -0,112** 0,065 lcSTRAT -0,035 -0,014 -0,255*** 0,302 inSTRAT -0,111 0,114 0,073 0,254 cuSTRAT 0,005 -0,001 0,004 -0,064 AGE 0,008 -0,054 0,01 -0,004 EDB 0,539 -0,778 0,166 -0,565 Adjusted R-square 0,479 0,234 0,153 0,386 F-value 13,671*** 4,01*** 2,532** 7,756*** Indirect Effect - 0,028 - -0,002
TABLE 11
Regression Results “BNrel GENDER”
Variable (1=BNrel) (2=AUMOT) (3=BNrel) (4=AUMOT)
Gender Female Female Male Male
Constant 7,8945*** 24,572*** 12,105*** 18,797*** pPME 0,0623 -0,183* -0,015 -0,128* BNrel - 0,456*** - 0,505*** CULTflex 0,130* 0,262** 0,356*** 0,169 STRUCT 0,3426*** -0,229** 0,085 -0,09 lcSTRAT -0,035 -0,014 -0,212 0,154 inSTRAT -0,111 0,114 0,023 0,315* cuSTRAT 0,005 -0,001 -0,042 -0,038 AGE 0,008 -0,054 0,031 -0,009 EDB 0,539 -0,778 -0,372 -0,211 Adjusted R-square 0,479 0,234 0,336 0,273 F-value 13,671*** 4,01*** 7,092*** 4,635*** Indirect Effect - 0,028 - -0,007
TABLE 12
Regression Results “BNtot GENDER”
Variable (1=BNtot) (2=AUMOT) (3=BNtot) (4=AUMOT)
Gender Female Female Male Male
Constant 7,8945*** 24,572*** 40,526*** 9,06* pPME 0,0623 -0,183* -0,101 -0,104 BNtot - 0,456*** - 0,416*** CULTflex 0,130* 0,262** 0,823*** 0,006 STRUCT 0,3426*** -0,229** 0,108 -0,091 lcSTRAT -0,035 -0,014 -0,684** 0,331* inSTRAT -0,111 0,114 0,131 0,273* cuSTRAT 0,005 -0,001 0,178 -0,133 AGE 0,008 -0,054 0,038 -0,009 EDB 0,539 -0,778 -0,164 -0,33 Adjusted R-square 0,479 0,234 0,447 0,432 F-value 13,671*** 4,01*** 11,294*** 9,364*** Indirect Effect - 0,028 - -0,045
TABLE 13
Regression Results “Direct Effect, non-manager”
Variable 1 2 Constant 27,051*** 28,202*** pPME - -0,159** CULTflex 0,263*** 0,29*** STRUCT -0,044 -0,03 STRATlc 0,056 0,073 STRATin 0,125 0,169 STRATcu -0,054 -0,03 AGE 0,031 0,031 GEN -0,711 -1,039 EDB -0,413 -0,39 Adjusted R-square 0,059 0,077 F-value 2,672*** 2,981***
TABLE 14
Regression Results “AUTONOMY, non-manager”
Variable (1=BNaut) (2=AUMOT)
Constant 8,158*** 24,268*** pPME -0,037 -0,142** BNaut - 0,482*** CULTflex 0,166*** 0,21** STRUCT 0,293*** -0,171** STRATlc -0,002 0,073 STRATin -0,089 0,212 STRATcu 0,154** -0,104 AGE -0,002 0,032 GEN 0,04 -1,058 EDB 0,229 -0,5 Adjusted R-square 0,458 0,213 F-value 19,17*** 5,483*** Indirect Effect -0,018
TABLE 15
Regression Results “COMPETENCE, non-manager”
Variable (1=BNcom) (2=AUMOT)
Constant 18,388*** 18,852*** pPME 0,002 -0,161** BNcom - 0,509*** CULTflex 0,064 0,258*** STRUCT 0,027 -0,043 lcSTRAT -0,015 0,08 inSTRAT -0,051 0,195 cuSTRAT -0,027 -0,017 AGE 0,021 0,021 GEN -0,501 -0,784 EDB 0,373* -0,58 Adjusted R-square 0,054 0,173 F-value 1,29 4,259*** Indirect Effect 0,001
TABLE 16
Regression Results “RELATEDNESS, non-manager”
Variable (1=BNrel) (2=AUMOT)
Constant 14,245*** 24,294*** pPME -0,027 -0,152** BNrel - 0,274*** CULTflex 0,327*** 0,201** STRUCT 0,056 -0,049 lcSTRAT -0,012 0,076 inSTRAT 0,03 0,161 cuSTRAT -0,007 -0,028 AGE -0,017 0,036 GEN -0,727 -0,839 EDB 0,001 -0,39 Adjusted R-square 0,311 0,148 F-value 10,21*** 3,532*** Indirect Effect -0,007
TABLE 17
Regression Results “TOTAL SATISFACTION, non-managers”
Variable (1=BNtot) (2=AUMOT)
Constant 40,791*** 16,503*** pPME -0,062 -0,142** BNtot - 0,287*** CULTflex 0,557*** 0,131 STRUCT 0,376*** -0,137** lcSTRAT -0,027 0,08 inSTRAT -0,109 0,201 cuSTRAT 0,12 -0,065 AGE 0,001 0,031 GEN -1,189 -0,698 EDB 0,603 -0,563 Adjusted R-square 0,437 0,239 F-value 17,615*** 6,385*** Indirect Effect -0,018
