Performance theories

Abstract

Choosing a dimension of performance as a basis for reward, staffing, or development decisions implies that it is important for an organization because it affects its current and future performance. Perceived relationships between different performance dimensions and organizational performance are referred to as performance theory. Performance theories may be spelled out explicitly in company documents. More often, they only exist in the minds of individuals throughout the organization — consciously or subconsciously. They evolve over time as the individuals observe performance and its effects throughout their careers, and they provide structure whenever these individuals assess performance, formally or informally.