Control theory of performance management system

By Priya Chetty on December 2, 2016

The Performance Management system is a vital part of Human Resource Management which aligns and optimizes individual performance with the overall performance of the organization. It can be defined as “a continuous process of identifying, measuring, and developing performance in organizations. It is achieved by linking each individual’s performance and objectives to the organization’s overall mission and goals” (Aguinis, 2011). There are many notable strategies and approaches to performance management systems in order to simplify the process. This also helps to make the performance management process more efficient for organizations. Among different approaches, Control theory is one such approach. Control theory helps in sustaining the performance management system by defining forms of control between the organization and the systems within. According to control theory, the actions of all systems should be in sync with the overall goals and objectives of an organization (Barrows & Neely, 2012).

Overview of control theory

Control theory focuses on control mechanisms that should be imposed at all levels of an organization. There are different forms of control that an organization can use in order to get the desired results such as:

  • organizational structure,
  • behavioural controls like norms and policies of an organization or
  • performance measurement mechanisms.

These results have to be congruent with the objectives and goals of an overall organization (Barrows & Neely, 2012). Control theory has three types of control systems:

  1. Under behaviour control, employers monitor and evaluate the actions of the employees on a regular basis, as per the standards of the organization and then reward them accordingly.
  2. In the case of output control, the performance of an employee is controlled with rewards or sanctions after evaluating it on the basis of organizational standards.
  3. The input control system seeks to control the selection and training process of an employee. However, it is important to ensure the availability of required competencies in the employees as desired by the organization for growth and development (Krausert, 2009).
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Out of these three systems, organizations can use any type of control system or a combination of different models. The selection of the control depends on the structure, norms, policies, and administrative information in an organization (Shell, 1992).

Various standards of desirable performance related to control theory
Shell control theory  Source: (Krausert, 2009)

Managing performance through a controlled process in the system

Control theory helps in performance management by evaluating the output of the system for its consistency with pre-defined sets of parameters. In case of any kind of deviation, it will be adjusted by the controller in the system. This model is popularly known as the Cybernetic model (Barrows & Neely, 2012). This model helps managers to control the performance of the employees. Similarly, it also generates faster and better outputs through regular monitoring and feedback. The cybernetic model states that, if an organization can execute control and performance more effectively and efficiently, it can easily cope with the changes in its external environment.

Improving the performance management system using the control theory
A cybernetic model of control theory     Sources : (Barrows & Neely, 2012

Strength and weakness of control theory

All humans have some basic needs which Maslow defined at several levels. This includes:

  • physiological,
  • safety,
  • belongingness,
  • esteem, and
  • self-actualization.

An employee hopes to meet these basic needs by working in an organization. Once their needs align with the organization’s standards and demands, the desired behaviour will be achieved (Luria G., 2008). Thus, these needs make control theory more applicable as it acts as a controller in syncing employee behaviour with the organizational behaviour standards. Therefore, this will eventually lead to achieving the desired performance.

On the other hand, control theory assumes that employees look at their feedback. This feedback controls the quality of the output. However, it can also have a negative impact, as it could result in decreased motivation and productivity levels of the employee. In control theory employee performance is also controlled by the rewards and recognition that an employee achieves once his performance meets the standards of an organization. However, control theory sounds too mechanical and fails to contemplate that humans are not mechanical objects (Locke, 1991).

Control theory sounds more mechanical in terms of human behaviour and performance. It can go well with a Bureaucratic, strict organisational framework where employee actions are continuously monitored and controlled. But now days work environment has become more dynamic, challenging, and competitive. Employees need to undergo all types of self-learning and skills up-gradation in order to survive.

Application of control theory at the workplace

There are multiple applications of Control theory in the workplace. In order to increase the performance of employees, managers must assign specific and challenging goals to employees that will upgrade their performance. However, organizations should avoid ambiguous goals that do not have specific standards and direct feedback (Campion & Lord, 1982). This is because, without clear feedback and proper standards, employees will not be able to rectify their errors.

On the other hand, regular supervision by the supervisors of the subordinates in the workplace can be analyzed with the control system (Carver & Scheier, 1981). Similarly, managers can use Control theory in management programs “to facilitate the continuous flow of feedback between managers and employees in an organization to track and evaluate achievements as a team” (Pennsylvania State University World Campus, 2016). So organizations can apply Control theory in the areas where there is the evaluation of performances, team meetings, and check-ins. In the case of human resource management, all three types of control systems which are behaviour control, output control, and input control can be utilized to analyze the behaviour and performance of an employee (Shell, 1992).

Nowadays, organizations have open work culture which involves the regular sharing of ideas and opinions. Employee behaviour, output, and input cannot be controlled completely in such present business environments. Similarly, organizations should ensure that employees have the freedom to handle the complexities and challenges they are facing. So, more research is required on control theory to tackle dynamic work culture and environment.

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