Understanding Heterogeneity in the Performance Feedback – Response Relationship: A Meta-Analysis

2021

Strategic Organization

Although managers’ perceptions are core to the Performance Feedback Theory, few empirical studies measure managerial perceptions of their organization’s performance and theorize on the (in)consistency between perceptual and objective performance feedback. Based on longitudinal survey data of Canadian organizations, we examine how this (in)consistency affects the propensity for innovation in organizations. Our analysis broadly validates that inconsistency between the two types of feedback it dampens innovation. Second, positive perceptions strengthen the relationship between positive objective performance feedback and innovation, leading to increased innovation, whereas negative perceptions strengthen the relationship between negative performance feedback and innovation, echoing the problemistic search hypothesis. We also find that perceptions moderate the effect of objective performance feedback differently in the social and historical dimensions as well above and below the aspiration thresholds.

Section: Resultsmentioning

confidence: 81%

Section: Discussionmentioning

confidence: 99%

Section: Theory Developmentmentioning

confidence: 99%

See 1 more Smart Citation

How do managerial perceptions of performance feedback affect innovation?

Saraf

Dasgupta

2021

Strategic Organization

“…However, recent meta-analysis and reviews show that the empirical results are much more ambiguous (Kotiloglu et al. , 2021; Verver et al. , 2018), especially for performance above aspirations (Blettner et al.…”

Section: Resultsmentioning

confidence: 99%

“…Our study's exploration of generic strategy offers a resolution for the conflicting empirical results for organizational responses to overperformance feedback (Kotiloglu et al. , 2021; Verver et al. , 2018).…”

Section: Introductionmentioning

confidence: 99%

What role does generic strategy play in how managers adapt their aspirations in response to performance feedback?

Ruckman

2022

JSMA

PurposeWhen managers set aspirations for their firms, they typically compare their own firms' performance to past aspirations as well as to the performance of social reference groups. The authors explore how firm generic strategy affects managers' adaptation of firm aspirations in response to feedback from three social reference groups that vary in terms of breadth (population average, strategic group, and one direct rival).Design/methodology/approachThe authors propose that firm generic strategy (low-cost or differentiation) functions as an organizational information filter through with managers interpret performance feedback. The authors test for whether generic strategy has a moderating effect on the influence of performance feedback from social reference groups.FindingsBased on a longitudinal sample of US airlines, the study shows that all firms are influenced most strongly by their strategic groups. Low-cost and differentiation generic strategies differ in terms of which social reference group motivates a larger reaction when overperforming: low-cost firms are more influenced by the population average which is contributed to by the entire industry than are differentiating firms, while differentiating firms are more swayed by the narrow focus of their direct rivals than are low-cost firms.Originality/valueAlthough firm strategy represents a core decision at the firm level, to the best of the authors’ knowledge, performance feedback research, surprisingly, has not yet integrated generic strategy into its models.

Self‐Assessment versus Self‐Improvement Motives: How Does Social Reference Group Selection Influence Organizational Responses to Performance Feedback?

British J of Management

Kotiloglu

Lechler

2023

The performance feedback theory (PFT) proposes that organizations compare their performance to other organizations (i.e. their social reference group) and initiate responses based on this comparison. While social comparison represents a core element of the PFT, it is not well understood how organizations select social reference groups and how this selection may affect organizational responses (e.g. risk‐taking, change, innovation). We propose that the motives that organizations use to select their social reference groups impact their responses to performance feedback. Our meta‐analysis of 99 empirical PFT studies focuses on two motives underlying the selection of social reference groups for performance feedback: self‐assessment and self‐improvement. While self‐assessment through comparison requires the selection of a relevant set of referent organizations, self‐improvement relies on the selection of the highest performing referent organizations. Our results show that organizational responses to performance feedback differ depending on which motive‐based reference group is selected for comparison. These differences are more evident when performance is above aspirations. This finding has important implications for PFT researchers to predict organizational responses more precisely.