What gets Measured Gets Done: Contextual Effects of Performance Measurement and Product Completion on Performance

• In Event: Internal Reporting

Abstract

In this study, we investigate the effectiveness of performance measures on employee’s performance under different contextual factors. More specifically, we analyze product completion as an essential aspect of task context. We hypothesize that the effect of performance measurement is stronger when the task context represents a completed product rather than a noncomplete product. Using a free-choice experiment with a folding task, our results indicate that the availability of a self-reported performance measure has a positive effect on employee’s quantitative performance when employees work on complete products but has no such effect when employees work on noncomplete products. Based on a causal model, we provide further evidence that product completion is positively associated with intrinsic motivation since it adds emotional attachment to the product, which in turn evokes feelings of competence. Our results extend research on contextual factors within firms by adding the dimension of product completion. In addition, our study has important implications for design choices of performance measures in firms.

Authors

• Nicole Nikiforow, Ruhr-Universität Bochum

• Sebastian Wagener, Ruhr-Universität Bochum