Considering the Manager in Performance Feedback Theory: Towards a Multi-Level Theory

Abstract

The Performance Feedback Theory (PFT) explains how organizational responses are motivated by organizational performance above and below aspirations. As such, it is formulated as an organization-level theory. However, numerous researchers directly or implicitly refer to individual-level theories and factors when developing empirical models or interpreting empirical results. Drawing on 114 empirical PFT studies, we address these incongruences and explore the empirical PFT literature to better understand the role of an individual-level perspective in explaining organizational performance feedback. Our review of the empirical PFT literature highlights the confusion about the role of the individual decision-maker in PFT models. We perform a meta-analysis to quantitatively separate effects of individual-level factors (and theories) from organizational-level factors (and theories) on organizational responses to performance feedback. We demonstrate that the effects of individual and organizational factors differ for performance above and below aspirations. We present empirical evidence suggesting the conceptual necessity for a multi-level theory (individual and organizational) to more precisely explain the organizational performance feedback process. This result provides an opportunity for future empirical studies to further explore specific individual-level factors and to extend the PFT.