Impact of the performance management process on employee motivation and performance in the Chinese banking industry

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Impact of the performance management process on

employee motivation and performance in the Chinese

banking industry

Abstract This study examines the relations among the use of performance management process, intrinsic and extrinsic motivation, and performance in the Chinese banking industry. I draw on self-determination theory and theories developed in an Anglo-American context to explore the relation between four components of using a performance management process and motivation. The data from 113 respondents in the Chinese state-owned banking sector is applied to verify a structural equation model. According to the results, employees’ intrinsic motivation is positively affected by the practice of prerequisites and performance planning, while their extrinsic motivation is positively affected by the implementation of performance review. In addition, there is a positive correlation between performance and both intrinsic and extrinsic motivation. The findings also highlight that the Chinese cultural factors have a negative effect on the performance management practice in the Chinese banking industry.

Changqi Wang Student number: S4212770 Supervisor: Paula M.G. van Veen-Dirks

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1. Introduction

Human capital factors are virtually aligned by every business with achievement of strategic goals. In other to increase their competitiveness, businesses also seek to maximize employee skills and contributions. Performance management is usually viewed as a key to the attainment of such goals. It is a continuous process of achieving the strategic goals based on the measurement, identification and development of teams’ and members’ performance (Aguinis, 2009). Daniels and Bailey (2014) argued that the performance management process is the foundation for the effective and efficient attainment of goals. In the performance management framework by Aguinis (2009), prerequisites, performance planning, performance implementation, performance review, performance evaluation, as well as performance re-contacting and renewal are all included in the ongoing process of performance management.

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involved in research of performance appraisal (Zhang & Lovegrove 2009). Therefore, this study is to examine how intrinsic motivation and extrinsic motivation are affected by the practice of performance management process and how they in turn affect employee performance in the Chinese banking industry.

Currently in China, as part of human resource management, performance management viewed as a modern concept from the western world. However, China has been identified in literature as a collectivist society with cultural characteristics like high power distance (Huo et.a., 1995), Confucianism (Child, 1994) and other characteristics. Therefore, there are some differences between China and other nations in terms of performance management system, and it might be problematic for China to directly copy western theories of performance appraisal (Zhang & Lovegrove, 2009). As indicated by Gu and Nolan (2017), the implementation of western performance management practices is subject to the influence of Chinese cultural values, suggesting that there will be differentiation and divergence in their utilization, effect and results. In particular, there has been much interest in whether or not the Confucian authority chains (Child, 1994) and the informal social networking—guanxi may increase the difficulty for the implementation of some elements of western human resource management (Nolan, 2011).

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supervisor-subordinate guanxi, Zhang et al (2016) noticed that employees are less likely to talk openly with their superiors about performance due to the respect for authoritativeness and the elderly. In addition, Cooke (2013) argued that the pursuit of group harmony might increase the importance of team effort, loyalty, punctuality and other ‘softer’ performance criteria, regardless of performance.

Chinese personal relationships have given rise of the use of the term guanxi (Gu & Nolan, 2017). In modern practice, guanxi may influence the trust between supervisors and subordinates. Farh et al. (1998) noticed that guanxi affects organizational life in many communicative aspects, including preferential actions, favorable peer evaluations caused by special relationships, frequency of communication and interpersonal trust.In addition, due to potential conflicts of interest in organizational settings, many problems would be brought in the application of guanxi in performance management (Chen, Chen, and Xin, 2004). To illustrate, a supervisor might prefer to highly appraise an employee, who has well-developed guanxi but actually underperforms in the workplace. This process, may, in turn, negatively affect employees who have no well-developed

guanxi but outperform in their daily work, since it is almost impossible for them

to be fairly evaluated.

Furthermore, performance management practices in China are also under the distinct influence of other characteristics of Chinese culture, such as modesty and self-discipline (Cooke, 2013) as well as face saving (mianzi) (Wang and Seifert, 2016). Cooke (2013) found that the appraisal system is affected by the norm of self-discipline and modesty, as self-evaluation and criticism are major components of the appraisal process. Similarity, the need to save face in the performance management progress exactly mitigates against critiques by supervisors and assessments by peers (Wang et al. 2017).

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egalitarianism and modesty might influence the link between performance management and motivations. Thus, in this thesis, I want to investigate that how the performance management influences employee motivation and whether the relationship between the performance management and motivations is consistent with self-determination theory in a Chinses cultural background.

The purposes of this paper are to investigate the impact of use of performance management on intrinsic and extrinsic motivation as well as work performance. My first contribution is to advance previous research by exploring the relations among the practice of performance management and detailed motivation types and work performance in the Chinese banking industry.Second, this research finds that Chinese specific factors (e.g., guanxi and Confucian authority) have a negative effect on the performance management practice. And that, in turn, affects employee’s motivation and work performance.

Research question:

how does the use of performance management influence intrinsic and extrinsic employee motivations? And how, in turn, do these two types of motivation influence employee performance.

Sub-questions: What is motivation?

What is the performance management process?

How does the use of performance management (i.e., prerequisites, performance planning, performance assessment and performance review) influence intrinsic and extrinsic employee motivations?

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In the next section, I present the theoretical background of the study, describe the Chinese state-owned banking industry, and develop the hypotheses. The research method is introduced in the third section, followed by the presentation of the findings in the fourth section. The findings are discussed in the fifth section according to the existing literature. I also analyze limitations of the study and present my conclusions in the fifth section.

2. Literature review

2.1. Performance management in the Chinese state banking industry

China’s state-owned banking industry is the setting for this study. The adoption of performance management in the Chinese banking industry has been investigated in some studies (Gu et.al., 2020; Gu & Nolan, 2017; Zhang & Lovegrove, 2009). In the recent two decades, China's financial market has been opened up, and commercial banks face cruel competition and urgently need to improve their management and market competitiveness (Zhang, 2009). According to Xie (2001), highly committed and motivated employees contribute greatly to the Chinese state-owned banking industry. In market orientated economic systems, as suggested by Akhtar, Ding, and Ge (2008), there is a progressively close relation between the quality of human resources and corporate performance. Thus, a key factor for the Chinese banking industry turns to be effective human resource management.

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and is basically more market orientated (Rowley, Benson, & Warner, 2004). However, some researches identify problems in the performance management process in the Chinese state-owned banking sector. For example, Gu (2020) notices that bank employees lack recognition and understanding of performance management and thus they are not enthusiastic about participating in and cooperating with performance management. Since objective standards, mutual influence, transparency, and openness are generally absent in performance management in China, employees tend to resist the implementation of performance management and hold a skeptical attitude (Benson et al., 2000). Hempel (2001) notices that Chinese cultural factors including guanxi (personal relationships), group orientation, harmony, respect for hierarchy and the elderly, mianzi (face saving) and Confucianism may be the major causes of such failure in performance management. Moreover, Ngo, Lau and Foley (2008) stated that conflicting stresses from trade unions, the central government and the local government, and other persistent institutional factors may also affect the implementation of performance management in the context of China. Finally, the limited techniques and experience of managers in state-owned banks make it more difficult to initiate changes, especially when pre-reform values and norms are still valued by many supervisors and employees (Ngo et al., 2008).

These studies prove Chinese factors may influence the practice of performance management in state-owned banks. However, we do not know how performance management in China is affected by these factors. Therefore, this study is primarily focused on China’s state-owned banking industry, the perception of employees in the industry and the relation between performance management and employee motivation and performance.

2.2. What is motivation?

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to motivation (Solomon, et al., 2010). Those individuals who take action to accomplish their goals which have been clearly defined are called well-motivated people (Erez & Zion, 1984). Extrinsic motivation and intrinsic motivation are the two types of motivation commonly defined in literature. The former is manifesting behaviors not for the acquisition of inherent pleasure, but for the achievement of a particular end, like perceiving the sense of belonging in a social environment or obtaining praise from others (King, 2009).The latter is about particular behaviors to acquire personal satisfaction and internal enjoyment (Gkorezis & Panagiotis, 2008). To illustrate, it is the motivation to engage in the performance of a behavior for the purpose of acquiring the sense of accomplishment and joy that could the behavior itself could provide (Deci, Connell, & Ryan, 1989). People, driven either by intrinsic or extrinsic motivation, would take particular actions and develop specific behaviors with the attempt to achieve a clearly defined objective, which is actually a kind of motivational response in a broad sense (Salem, 2015).

2.3. Self-determination Theory

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Kuvaas (2009) tests how individuals’ work performance is affected by their intrinsic motivation. In addition, Guo (2007) employed SDT to investigate the influence of characteristics of performance management on autonomous and controlled motivations among employees in a survey study in university. I use SDT and the theories developed in an Anglo-American context in the following section to examine how motivation is influenced by the performance management system in the Chinese banking industry.

2.4. The performance management process

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Figure 1. Performance Management Process (Aguinis, 2009)

The prerequisites include a good understanding of the mission and strategic objectives of the company and the relevant job.Performance planning includes a development plan and the consideration of actions and outcomes. When it comes to performance execution, employees should proactively seek feedback from their supervisors and devote themselves to attaining organizational goals. Performance assessment is conducted by both supervisors and other

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employees. The performance review emphasizes the past, present and future and works through the appraisal meeting. The final component involves performance renewal and recontacting in which adjustments are made based on the data obtained in the review stage.

Kathryn (2013) developed the Performance Management Behavior Questionnaire (PMBQ), which does not include measurement of performance excitation as well as performance renewal and reconstructing. Following Kathryn’s work, I focus on the prerequisites, performance planning, performance assessment and performance review components in the framework put forward by Aguinis (2009).

Prerequisites phase

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contributions, rewards and results for a particular job or position that is available in a company (Leon Rohr, 2016). As a detailed job analysis, job description is supposed to correctly describe what a job-applicant would actually do after being admitted in the illustration of required job activities. According to Scott (2011), performance management relies on job description to some extent. In the process of performance management, both employees and supervisors have access to transparency with the help of job description. As suggested by Leon Rohr (2016), they can thereby understand the exact expectations on performance.

Performance planning phase

The consideration of results and behaviors in a performance planning discussion enable people to under the performance management system thoroughly (Aguinis, 2009). The outcomes that should be produced by employees or what should be done are contained in the scope of results. Performance standards are the major content of the discussing on results. According to Locke and Latham (1990), performance standards are identified as a rule formeasurement and evaluation, which means that the extent to which an objective has been achieved by an employee is evaluated according to performance standard. Bobko (1994) suggests that explicit performance standards are usually connected to employee performance expectations that may be communicated by organizations. Consider the job of bank employees, for example, instead of being phrased in terms of corporate goals and desired outcomes, standards describe specific desired behaviors.

Performance assessment phase

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manager and the peers generally have different perception of one’s performance (Latham, 2004). For example, due to the limited chance for a superior to observe each employee, it is impossible for the superior to have a totally objective and comprehensive evaluation of an employee’s performance. On the other hand, employees’ self-appraisals are based on their biased perception of their abilities (Latham, 2004). Therefore, the multisource appraisals provide the next phase of performance review with comprehensive and accuracy information.

Performance review phase

To receive feedback on performance, the manager and the employee need to engage in the appraisal meeting (Aguinis, 2009).This process is also known as performance review. In general, a review of the past is conducted in the appraisal meeting to identify the results and the behaviors. Through investigating over 150 institutions in Scotland, Solatani (2003) revealed that of the past is emphasized by over more than 80% of institutions. Moreover, the compensation that an employee can receive if he performs well in the workplace is also disclosed in a good appraisal meeting. For conducting an effective performance review, six recommendations were offered by Grossman and Parkinson (2002), for example, citing certain positive behaviors to identify good performance, using cases of negative behaviors to present poor performance, and explaining how to overcome current performance problems through the use of skills applied in past achievements.

2.5. Performance management and motivation hypotheses

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listening skills), and abilities (e.g., ability to multitask). Millette’s (2008) research shows that workers’ engagement, satisfaction and intrinsic motivation can be enhanced via job design. Through the guidelines to increase the job’s Motivating Potential Score (Hackman and Oldham, 1975), it is important to generate a well-defined job description or a clearly described mission that enables employees to understand the contribution of their performance to the accomplishment of the organizational mission (Millette, 2008). Similarly, Edward (1970) found that the intrinsic motivation attitude items are significantly related to job description. Furthermore, the prerequisite phase also enables employee’s goals confirm with those of the organization. It ties the individual objectives to the organization mission and vision. This is in consistence with SDT: relating to the organization satisfies an employee’s need for relatedness. SDT argues that employees’ intrinsic motivation is enhanced through satisfying their need for ‘relatedness’ (Ryan and Deci, 2000).

In SDT, it is assumed that needs are universal among individuals, although they tend to have different goals and traits (Sheldon, Cheng, & Hilpert, 2011). Hence, more attention is paid to need fulfillment and corresponding perceptions. Therefore, no reason is given in SDT research to predict a relation between prerequisites and extrinsic motivation. Similarity, Dysvik and Kuvaas (2013) conducted a survey research to explore the relationship between extrinsic motivation and achievement goals. They found no support of the moderating effect of objectives on employee performance and extrinsic motivation. Thus, the relation between prerequisites and extrinsic motivation is not hypothesized herein.

To conclude, prerequisites and intrinsic motivation are expected to have a positive association, because prerequisites could foster feelings of engagement, satisfaction as well relatedness among those employees. Therefore, I hypothesize that:

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associated with employee intrinsic motivation.

In the performance management process, performance planning is usually conducted in order to ensure that employees act according to required behaviors and achieve performance standards Aguinis (2009). Consider the job of bank employees. Performance standards could be achieving high grades in customer satisfaction surveys and opening 25 new certificate of deposit accounts in a month, while standards of behavior could be welcoming new clients with energy and “What can I do for you?” spirit and muting cell phones in the workplace. From the SDT perspective, these standards reduce employee’s freedom to perform their task. They undermine employees’ intrinsic motivation due to the restriction on their autonomy. On the other hand, these standards, as an external regulation, impose a type of extrinsic motivation on employees (Gagné and Deci, 2005). Employees become extrinsically motivated and act in order to avoid an undesired consequence or to obtain an expected result (Gagné and Deci, 2005), which means the employees’ needs are fulfilled predominantly in indirect ways and not by the activity itself (van der Kolk et al, 2018).

In summary ofthe situation for performance planning, I expect that performance planning has a negative influence on employee intrinsic motivation by reducing employee autonomy and has a positive influence on employee extrinsic motivation.The hypotheses below are therefore generated:

H2a: performance planning in the performance management process is negatively associated with employee intrinsic motivation.

H2b: performance planning in the performance management process is positively associated with employee extrinsic motivation.

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appraisal forms Monthly or quarterly. Judge (2003) suggested that employees tend to regard themselves in core self-evaluations as having an internal locus of control, higher emotional stability, higher efficacy, and higher self-esteem. Employees having high self-esteem are more likely to believe that they are valuable, important and competent (Pierce & Gardner, 2004), and their perception of abilities to fulfill a mission usually affects their choice between avoiding the task and seeking solutions to finish it (Bandura, 1997).In addition, individuals who perceive higher self-efficacy are likely to choose more challenging tasks (Bandura, 1997). Thus, positively self-evaluated employees seek for tasks which can give full play to their values or meet their intrinsic interest and goals that are autonomously chosen (Joo et al., 2010). SDT argues that critical component of intrinsic motivation is autonomy, such as the freedom to make an independent choice (Van der Kolk et al, 2018). Therefore, the self-evaluation ispositively linkedto intrinsic motivation.

Furthermore, managers and peers also fill out their appraisal forms regularly. In terms of employee performance, self-views may be different from views given by important others (e.g., the manager and peers) (Aguinis, 2009). This is the reason why some employees have the motivation to receive praise from others, especially when they receive undesired feedback from peers or the manager (Brutus, 1999). This is consistent with King’s (2009) theory that extrinsic motivation is manifesting behaviors not for the acquisition of inherent pleasure, but for the achievement of a particular end, like perceiving the sense of belonging in a social environment or obtaining praise from others.

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H3a: performance assessment in the performance management process is positively associated with employee intrinsic motivation.

H3b: performance assessment in the performance management process is positively associated with employee extrinsic motivation.

Performance review involves the appraisal meeting to evaluate the performance of employees, give feedback and decide the reward on their performance. SDT holds that an individual’s innate psychological needs cannot be met by the attainment of extrinsic objectives (e.g. money incentive and positive feedback) (Guo, 2007). Furthermore, due to the performance review, employeesare guided to pay more attention toperformance measurement and to the targets that are set, which restricts employees’ autonomy and subsequently reduces their intrinsic motivation. From other perspectives, the internal causes of one’s behaviors (intrinsic interest) are discounted when rewards are targeted at performance, while more emphasis is actually put on rewards (external incentives). The loss of intrinsic motivation is then the natural consequence of the ascribing transfer from internal to external reasons (Pierce, 2003). In line with this, the intrinsic motivation of bank employees is expected to have a negative relation with performance review. Given that performance review requires employees to pay attention to the pre-set targets and the way their performance is measured, employee behavior is driven by the instrumentality of the linkage between behaviors and their corresponding outcomes.

In summary of the situation for performance review, I expect that performance review has a negative influence on employee intrinsic motivation by reducing employee autonomy and exerts a positive influence on employee extrinsic motivation by fulfilling employee’s extrinsic needs. Thus, the following hypotheses are proposed herein:

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negatively associated with intrinsic motivation.

H4b: performance review in the performance management process is positively associated with extrinsic motivation.

2.6. Performance-related hypotheses

Many studies have illustrated that intrinsic motivation plays a role of enhancing performance. For example, Grant’s (2008) survey study shows that the way performance and productivity are associated intrinsic motivation is moderated by intrinsic motivation and also proposes that when employees perceive their ability to help others or want to help others, they can have the motivation to benefit others. Cerasoli’s (2014) meta-analysis suggests that performance affects intrinsic motivation in a positive manner. Besides, it is shown in Kuvaas’s (2009) cross-sectional investigation that intrinsic motivation mediates the link between work effort and the perception of investment in employee development. Therefore, intrinsic motivation is considered as one of the sources of the enhancement in performance.

Prior studies have also examined extrinsic motivation and reported its positive association with performance. Extrinsic motivation is found in Yousaf’s (2015) survey study to be positively related both to contextual performance and task performance. Sung (2009) states that strong extrinsic motivation has a positive influence openness to creativity, which is reported to make leading contribution to employees’ performance in a variety of sectors. Therefore, extrinsic motivation is considered as one of the contributors of the enhancement in performance. Thus, the following hypotheses are proposed herein:

H5: Intrinsic motivation is positively associated with employee performance H6: Extrinsic motivation is positively associated with employee performance

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left and are hypothesized to have a certain relation with employee intrinsic and extrinsic motivation. In the meantime, employees’ performance is also hypothesized to be under a positive influence of intrinsic motivation and extrinsic motivation. H1+ H2a- H5+ H3a+ H4a-H6+ H2b+ H3b+ H4b+

Figure 2. Chart of relations studied

3. Methodology

3.1. Survey method

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phenomena regarding performance management and motivation.

The questionnaire consists of two sections. To investigate the characteristics of respondents, six socio demographic items are included in the first part, including: age, gender, educational qualification, the bank the respondent is working in, position in the bank and work period.

In the second part, a 4-item scale, based on the Aguinis’s (2009) performance management framework and Kathryn’s (2013) Performance Management Behavior Questionnaire (PMBQ), was used to measure the four components including: prerequisites (PRE), performance planning (PLA), performance assessment (ASS) and performance review (REV). Further, a 3-item scale was used for the identification of intrinsic motivation (INTM) based on the questionnaire designed by Gagné et al. (2010). Kline (2011) notices that for a questionnaire, a three-item or four-item construct is empirically more preferable than a two-item construct. Furthermore, as suggested by Van der Kolk et al. (2018), it is necessary to examine two important extrinsic factors, namely status and economic certainty. Thus, the extrinsic motivation (EXTM) contains an item “Are you doing this job because of the status it provides” from Van der Kolk et al.’ (2018) questionnaire and two economic items from the questionnaire by Gagné et al. (2010) for the purpose of achieving empirical and theoretical enhancement in the strength of the construct. Lastly, the performance (PERF) consists four items that based on online questionnaires on Questionnaire Star, a Chinese survey website.

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order to consider Chinese culture values, such as “Do you think the relationship with the leader (guanxi) will affect performance evaluation” and “Do you think the performance appraisal is just filling out forms, meaningless”. The full questionnaire is presented in Appendix A.

3.2. Sample and access to research sites

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Table 1 and Table 2 show the descriptive statistics of the demographic data of the respondents. From Table 1, around 60% of the respondents are woman. The age ranges from 26 to 35 have the largest number of both male and female respondents, which was about 45 per cent of respondents.They all worked in Chinese state-owned banks, and about 40 per cent of respondents were from China Construction Bank (CCB). A lot of respondents (43%) had worked in banks for five to ten years. Generally, around 60% of therespondents achieved bachelor and about 30 per cent of respondents had master degree or above.

Table 1. Demographic descriptive statistics sample

Variable Frequency Percentage

Age respondents (n = 113) 20-25 years 12 11% 26-35 years 50 44% 36-45 years 34 30% 45+ years 17 15% Gender respondents (n = 113) Female 71 63% Male 42 37% Education respondents (n=113)

High school degree 14 12%

Bachelor degree 65 58%

Master degree or above 34 30%

Experience in the organization (n = 113)

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Table 2.Descriptive statistics formain variables

Variables (n=113) Mean Median SD

Prerequisites 6.12 6 0.97 Performance planning 5.66 6 1.26 Performance assessment 4.77 5 1.40 Performance review 5.67 6 1.44 Intrinsic motivation 5.82 6 1.27 Extrinsic motivation 5.52 6 1.24 Performance 5.70 6 1.31

4. Findings

A measurement model in SPSS software was operated on Questionnaire Star for the purpose of testing the unidimensionality of multiple-item constructs. Appendix B shows the standardized factor loadings yielded thereby. I find the chi-square = 395.414, p-value <0.0001. That means that it is a poor model fit, due to the significant chi-square values. So, I standardize the data. After adjusting the data, I found GFI is 1.0>0.9, RMR <0.0001, CFI is 1.0 >0.9. AIC is better from Saturated model. I think it is fitted under the Saturated model. The degree of freedom is 0 in the saturated model.

To investigate the links between performance management, intrinsic and extrinsic motivation and performance, structural equation modeling (SEM) was applied in the analysis. The choice of this method was driven by the possibility for the construction of a model to explain all the relations investigated and the incorporation of multiple dependent variables into simultaneous estimation (Hair et al., 2006). I use SPSS software on Questionnaire Star to assist the implementation of this study.

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motivation. Then I get the trimmed base model. Lastly, the hypotheses were examined with the trimmed model.

Table 3.Base model, trimmed base model and hypotheses Model 1 (Base model) Model 2 (Trim. base model)

Relation Coeffic. P Coeffic. P Hypothesis Support?

PRE→INTM 0.321** 0.000 0.396** 0.000 H1 Accepted

PLA→INTM 0.209 0.238 0.196 0.222 H2a Rejected

PLA→EXTM 0.967 0.042 0.867 0.037 H2b Accepted

ASS→INTM 0.083 0.223 0.082 0.238 H3a Rejected

ASS→EXTM 0.11 0.231 0.11 0.231 H3b Rejected

REV→INTM 0.486** 0.000 0.437** 0.000 H4a Rejected

REV→EXTM 0.2* 0.035 0.195* 0.035 H4b Accepted

INTM→PERF 0.624** 0.000 0.437** 0.000 H5 Accepted

EXTM→PERF 0.32 0.099 0.279 0.075 H6 Accepted

* Significant at 1% ** Significant at 0.1%

The hypothesized relations in the model shown in Table 3 could be verified through examining their p-values and coefficients. The significant positive coefficients of PRE→INTM (p < 0.01) mean that Hypotheses 1 is supported. In other words, prerequisites are positively associated with intrinsic motivation. Meanwhile, hypothesis 2a should not be supported, because the coefficient of PLA→INTM is not significant. Hypotheses 3a and 3b are also rejected. The results reveal no significant association between intrinsic motivation and extrinsic motivation and performance assessment. In addition, not as hypothesized, performance review has a positive influence on intrinsic motivation, since the coefficients are significantly positive (p<0.01), and thus hypothesis 4a is not supported. Nevertheless, given a positive relation between extrinsic motivation and performance review, it is evidenced to support hypothesis 4b (p < 0.05).

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→ PERF (p < 0.01), verifying the positive relation between performance and intrinsic and extrinsic motivation.

Table 4. Respondent's perception of performance assessment

Perception Frequency Percentage

Self-assessment (n=113)

Meaningful 39 35%

Meaningless 53 47%

Not sure 21 19%

Supervisor's assessment (n=113)

Not affected by Guanxi 48 42%

Affected by Guanxi 47 42%

Not sure 18 16%

The Table 4 shows the respondents’ perception of performance assessment. Although around 75 per cent of employees report that they complete assessment regularly, only 35 per cent of respondents think the self-assessment is meaningful and most respondents think it is just filling out forms, meaningless. Moreover, about 40 per cent of respondents believe the relationship with the supervisor (guanxi) affects their performance evaluation.

5. Discussion and conclusion

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intrinsic and extrinsic motivation.

Following the SDT perspective, the study tested the link between performance management and the link among different motivations and work effort. Generally speaking, the results are a bit mixed, however, the effects are either positive or insignificant according to Table 3. For the prerequisites component of the performance management progress, I found that it has a positive and significant relation to intrinsic motivation, which supports the hypothesis 1. This is because well-defined job description and clearly-stated mission enable employee’s goals confirm with those of the organization (Millette, 2008). It ties the individual objectives to the organization mission and vision. It is in consistence with SDT: relating to the organization satisfies an employee’s need for relatedness. SDT argues that employees’ intrinsic motivation is enhanced through satisfying their need for ‘relatedness’ (Ryan and Deci, 2000).

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competence’, and then enhance their intrinsic motivation. What’s more, in China, the work pressure in economic related industries has increased greatly, of which the banking industry is the most stressed (Guo, 2019). Moreover, Zhou’s (2020) survey study finds that Chinese bank employees face the current situation of high work pressure, high workload and intensity of work, and low job satisfaction. In other words, jobs in Chinese banking industry can be considered as high demanding jobs. Therefore, the demand-control model (Karasek, 1996) might explain why the performance planning can increase the intrinsic motivation in Chinese banking industry.

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consistent with my survey results shown in the Table 4, which reports respondent's perception of performance assessment. Although around 75 per cent of employees think they complete self-assessment regularly, only 35 per cent of respondents think the self-assessment is meaningful and most respondents think it is just filling out forms, meaningless. Moreover, about 40 per cent of respondents believe the relationship with the supervisor (guanxi) affect their performance evaluation. Thus, the Chinese culture values may explain why performance assessment do not play an important in the China state-owned banking industry.

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Pierce’s (2003) study might explain the result about the positive influence of performance review on intrinsic motivation.

More in general, performance was observed to be positively associated with intrinsic and extrinsic motivation, revealing the significance for the Chinese banking industry to have a motivated workforce.

Some limitations of my study can be addressed by conducting further research. The limitations mainly lie in the sector focus in the banking industry and the specific geographical scope (primarily in Northern China). A longitudinal study can be carried out in the future to examine the influence of performance management on motivation and performance over time. Besides, the study only focuses on the Chinese state banking industry and neglect city commercial banks and foreign-owned banks. According to Gu (2020), compared to other types of organizations, state-owned enterprises are more likely to receive a greater negative impact of interpersonal connections, seniority and other national cultural factors on performance management practices. Hence, different organizational contexts can be targeted in future studies to broaden and deepen the knowledge about the use of performance management. As indicated by Sheldon and Sanders (2016), daily experience of employees who are involved in performance management practices is overlooked in most researches, since the focus is generally put on the effect of such procedures on corporate performance. Therefore, Chinese organizations are advised to be studied with the “inside out” approach(Gu, 2020).

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affect the association between the practice of performance management and two types of motivation.

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Appendix A – Constructs & Survey Items

Prerequisites

Please rate the extent to which you agree or disagree with the following statements (1 = strongly disagree, 7 = strongly agree):

(a) The bank has a clear development strategy and business goals (b) Employees’ personal performance goals are clear

(c) Job and task descriptions are being used to provide employees with clarity about their tasks

(d) Employees are very clear and timely know leader’s expectations and requirements

Performance planning

(a) Employees clearly understand the bank’s performance management standards (b) Performance management standards are fair and just for employees

(c) The performance management system can be strictly implemented (d) Activities of employees are registered and/or monitored

Performance assessment

(a) Employees regularly self-evaluate their work

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(c) The relationship with the leader (Guanxi) do not affect performance evaluation of employees

(d) Performance evaluation can truly reflect the work performance of employees Performance review

(a) Employees are being given specific feedback about what is good and bad about performance

(b) Employees are being given special recognition for exceptional performance (c) Employees are being rewarded for good results

(d) Employees are being promoted for good results

Intrinsic Motivation

I do this job . . .

(a) because I enjoy this work very much

(b) for the moments of pleasure that this job brings me (c) because I am proud of this job

Extrinsic Motivation

I do this job . . .

(a) because this job affords me a certain standard of living (b) because it allows me to make a lot of money

(c) for the status it provides me Performance

(a) The overall work efficiency of the bank is very high (b) The bank’s employees are very cohesive

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(d) The customer satisfaction of the bank is very high