FEEDBACK, GOAL SETTING AND PERFORMANCE MANAGEMENT IN A FAST-CHANING ENVIRONMENT - A study of employees´perceptions

Abstract

Purpose: This thesis aims to study how employees perceive their feedback environment and goal setting in relation to performance management. Theory: This study is based upon the theoretical understanding of the mechanisms by which the feedback environment and goal setting affect performance. The theory of feedback-seeking behavior (FSB) provides a good foundation for the analysis as it looks at feedback not only from the organizational perspective but also from the individual's view. In addition, goal setting theory offers an understanding of how individuals can improve their performance by having a positive goal setting strategy, which adds a supportive ground for the analysis of this paper. We also based our work on control theory which provides a meaningful framework to analyze the relationship among performance, goal setting, and feedback environment, which are the main subjects of this study. Method: The study employs qualitative research methodology and the empirical data is based on interviews of employees in a case company and a questionnaire which is used qualitatively. Results: The study revealed that feedback environment and goal setting played an important role in employee´s performance. There are various mechanisms by which these two factors influence performance. Four dimensions were found to be important in feedback environment: frequency of feedback, sources of feedback, content of feedback, and encouragement of feedback-seeking. Besides, alignment between employees' goals and team and company directions as well as personal capabilities, content of goals, flexibility, and transparency were found to be the fundamental dimensions of goal setting in employees' performance. There is an interdependent relationship among feedback, goal setting, and performance where the lack of either feedback or goal setting will negatively impact performance. It is suggested that the human aspect should be central in performance management and that the mindset of actively working with feedback and goal setting will lead to performance development.