Performance management and its impact on organizational social capital: A pan European executive perspective

This paper explores the relationship between the use of performance management instruments such as performance appraisals, management by objectives and strategic planning and organizational social capital (OSC) across European... [ view full abstract ]

This paper explores the relationship between the use of performance management instruments such as performance appraisals, management by objectives and strategic planning and organizational social capital (OSC) across European public administrations. The presence of organizational social capital is characterized by employee networking and interaction, trust, and a common goal and mission. It is an important factor for organizational research as it has been linked to positive outcomes, including enhanced performance and innovation. However, little research exists that explores OSC in public organizations and how it is affected by performance management. Against the backdrop of NPM research warnings of the unintended consequences of managerialisation on employee attitudes in public organizations, we argue that management instruments can have a positive impact on OSC if they are free of political interference. Applying a multilevel regression model to executive survey data collected from 19 different European states, we show that performance management reforms have a positive relationship to OSC, while high politicization has a negative effect. Moderation analysis suggests however, that this relationship is reversed in cases of high strategic planning. Further findings and implications are discussed.