Interplay between performance measurement and management, employee engagement and performance

Purpose - The literature recognises the importance of the interplay between performance measurement, performance management, employee engagement and performance. However, the nature of this phenomenon is not well understood. Analysis of the literature reveals two dimensions of organisational control, technical and social, that are used to develop a conceptual framework for studying this phenomenon. Methodology - We conducted explorative action research involving pilot and control groups from two departments of a UK bank.
Our Findings show that an intervention on the social controls has led to changes in technical controls of the performance measurement system resulting in significant improvement in employee engagement and performance.
Limitations - The research was undertaken with two cases from a single organisation. Further fine-grained, longitudinal research is required to fully understand, in a wider range of contexts, the interplay between performance measurement, performance management, employee engagement and performance. Practical implications - Our work contributes to the wider theory on performance measures and gives practical guidance on how organisations might design their performance measurement systems to enhance employee engagement and performance. Originality - Our study makes three main contributions. First, we introduce a new theoretical framework based the organisational control theory that provides a robust theoretical basis for future research. Second, through nine propositions we establish a clear causal relationship between performance measurement, performance management, employee engagement and performance. Third, we identify a gap in knowledge concerning design of organisational controls in the context of the process that is being managed.