Employee Performance Management: The Impact of Competing Goals, Red Tape, and PSM

Abstract

Employee performance management (PM) can benefit employees, organizations, and wider stakeholders, but it is often done poorly, and public administrations pose contextual constraints to doing it well. It has inherent tensions between the goal of accountability and development, is complex, and requires alignment across both a formal administrative level and an informal psychosocial level. In public administration, three contextual factors add complexity and difficulty—competing goals, red tape and public service motivation. This study examines how line managers—a neglected group in PM studies—“do” performance management in practice. Data were collected via interviews with public sector managers in the “new public management” influenced New Zealand public sector. Competing goals and red tape make PM difficult, offer little accountability, and inhibit employee development, which often must run parallel to formal practices. They also limit managerial skill development. Failings in one practice, such as setting employee goals, impact subsequent formal and informal practices. Public service motivation provides workarounds. To work well, modern performance management could be reconstrued less as a compliance activity and more as a psychosocial process reinforced by a formal, prescribed organization system. Practical insights into barriers and opportunities, to improve performance management, are identified.