The Impact of Target Setting on Managerial Motivation and Performance
Amalia Rachma Sari
Universitas Islam Sultan Agung, Semarang
Muhammad Jafar S.
Universitas Islam Sultan Agung ,
[Jurnal Akuntansi Manajemen – SNA 13]
This research has done examining managerial perceptions of the relationship between target setting system (TSS) and managers’ attitudes and behavior. On the basis of the Expectancy-Valence (E-V) theory of motivation, a model is developed and a number of propositions are advanced about the interactive effect of participation, target attainability, target specificity and commitment on managerial motivation and performance. We set this research by using a partial least squares (PLS) methodology, there are 47 samples, was collected directly and used clustered random sampling.
The perceptions of 47 middle managers in a Central Java manufacturing companies are analysed. The results partially support the model. They show that participation tends to affect the perceived commitment to the targets directly, through the perceived commitment tends to managers’ performance. Target specificity has a significant influence to be attainable for setting the targets, however, target attainability doesn’t have a significant influence on managers’ motivation and subsequent performance. Further, managerial perceptions of the specificity and attainability of targets appear, not to contribute to target commitment, which have a negative effect on managers’ performance.
Overall, the study’s findings are different from the consistence of conclusions of goal setting theory about the motivational potential to be attainable on performance targets. However, as well as with the literature on the participation in the target setting process has important implications for the way targets are set within the performance measurement, evaluation and reward system (PMERS).
Keyword : middle management motivation, incentives, target setting, performance.
Management control theory prescribes that the motivational impact of any incentive scheme for middle managers depends largely on the correlation of the ex-post measurement and evaluation of managerial performance with a desirable reward carries some value for managers (Hopwood, 1976; Otley, 1987; Kominis and Emmanuel, 2007).
Within agency theory, the conflict of interests and goals between the self-interested middle managers and the organisation is considered to be bridged through performance-related contracts (Baiman, 1982, 1990). That is tightly fastened systems of performance measures, which identify the scopes that are essential for the organisation?s success , such as targets, which define the organisationally desirable level of achievement in all these essential parts ; and rewards, which are expected to stimulate managers? motivation and performance.
However, we see (Locke et al., 1988; Locke and Latham, 1990) argue that there is a different argument that the majority of people are innately goal-oriented, even when target achievement is not linked with monetary rewards, widely spread in the organisational behavior literature, this is based on the fundamental premise may serve as an external standard against which personal success is judged (Merchant, 1989), it means that through which the individual?s conscious intentions are channelled and motivation is activated (Latham and Yukl, 1975). ….