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Evaluating Performance Norms

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Newman and Azevedo argue that performance targets are usually set as absolute targets for agents to reach, which are known to the agent prior to the period when performance will be reviewed. The absolute target may be specified in for a level of the performance indicator or a change in the indicator. Ideally, they say, one would want the probability of achieving target to be due solely to the effort. There should be no systematic tendency for an agent with a given set of characteristics to succeed or fail in reaching the target. However, there are different initial conditions that are present and that do affect the probability of achieving the target, and not taking them into account in the setting of the target will generate a systematic pattern in ex post observations of whether the target is achieved or not (Newman and Azevedo, 2013, p. 3). …show more content…

Franko-Santos and Prof. Bourne have assessed several theories in order to evaluate the effects of performance targets on behavior and performance. The conclusions they came up are that most theories underline the importance of attainability of the targets. Motivation theories propose that when people think that their targets are unattainable, this perception affects their motivation in different ways. It may either increase it (Locke and Latham’s goal-setting theory) or it may decrease it, as proposed by Vroom’s expectancy theory and Atkinson’s achievement motivation theory. Decision-making theories and behavioral agency theory propose that when people perceive their targets to be unattainable it increases their risk-taking behavior (Franco-Santos and Bourne, 2008,

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