How Do Performance Gaps Affect Improvement in Organizational Performance? Exploring the Mediating Roles of Proactive Activities

Abstract

According to the extensive literature on performance gaps, the various reference points of the problem identification process affect the managerial decisions of public managers. In this article, we propose a theory about the public management decision-making processes based on the roles of proactive behaviors, specifically regarding how identifying such problems (performance gaps) leads to performance improvement. Using panel data from Korea covering 2005–2014, this analysis provides support for our assertion that not all reference points are equally important to public managers’ proactive responses; however, we find evidence supporting the importance of perceiving the external reference point of problem identification as a significant precedent for successful organizational performance. Our results also indicate that practitioners need to become involved in greater feedback processes when searching for proactive solutions that remedy poor organizational performance. This suggests that the creation of diverse and sophisticated performance feedback systems can strengthen public managers’ abilities to find solutions for organizations. Ultimately, the findings enhance our understanding of the relationship between performance gaps and performance improvement by examining the role of public managers’ proactive behaviors.