Performance evaluation environmental uncertainty and organisational effectiveness

• Main Authors: Gan, Stephanie Seow Wee, Sim, Theresa May Ling, Tan, Bee Pheng
• Other Authors: Goh Chye Tee
• Format: Final Year Project
• Language: English
• Published: 2015
• Subjects: DRNTU::Business::Operations management
• Online Access: http://hdl.handle.net/10356/63661
• Institution: Nanyang Technological University

This research seeks to determine appropriate performance evaluation styles to be adopted by organizations in the assessment of the performance of their managers so as to effectuate higher organizational effectiveness. As the study is conducted in the local context, the results obtained would hold greater relevance for management executives of large organizations in Singapore. In this study, two hypotheses are to be tested, namely: (I) Under conditions of high environmental uncertainty, superiors of business units would tend to use a more subjective performance evaluation style, whereas under conditions of low environmental uncertainty, they would tend to use a more formula-based performance evaluation system, and (2) The relationship specified in (I) would be stronger for more effective business organizations than for less effective ones. Basically, the study was performed in three stages. First, a review of the literature in the related fields ·of study was done. This provided the factors that were used in the measurement of the three key variables of our study; namely performance evaluation style, organizational effectiveness and environmental uncertainty. Next, questionnaires were distributed to companies of diverse nature; operating in various sectors of the economy such as manufacturing, service and retail. Finally, the data collected was analyzed using descriptive statistics and linear regression. The results obtained are supportive of the two hypotheses that are put forth in this study. Though a direct relationship between performance evaluation style and organizational effectiveness could not be found, some factors, one of which is environmental uncertainty, could produce a moderating effect upon the contingency framework linking such intervening variables and organisational effectiveness. Under conditions of high environmental uncertainty, the use of a subjective performance evaluation style would result in higher organizational effectiveness and vice versa.