Discussion
The development of suitable and valid operational performance metrics is challenging because the metrics need to include enough context-specific idiosyncrasies to be meaningful to the employees and managers who use the metrics. The main goal of this research is to find out how managers can ensure that PM participation will have positive effects on employee job performance. We investigate the mediating mechanism between PM participation and employee job performance, and specifically look at variables from a management point of view—that is, PM quality as rated by the manager and use of PIs for different incentive purposes. The analyses show a statistically significant positive indirect effect from PM participation to employee job performance if the performance metrics are used for evaluation purposes. Use of PMs for monetary compensation or nonmonetary rewards do not seem to mediate the relationship between PM participation and employee job performance. As the overall contribution,these findings on the indirect effects indicate that organizations might benefit from including operational employees in the development of performance metrics. In practical terms, the results advise managers to improve the quality of the performance metrics by involving employees in their development. Another piece of advice that emerges from the overall results is that managers should use these co-developed performance metrics for evaluative discussions about performance with their employees. With the help of such a set of performance measures, the manager and the employee could discuss the employee’s performance, any problems the employee needs to address, favorable unexpected events, actions taken, improvement ideas for the next period, and so forth. The results did not show an effect on employee job performance of using the co-developed performance metrics for monetary compensation or nonmonetary rewards. Given the diverse findings of earlier research on the use of extrinsic rewards, managers are advised to first investigate what type of incentives work best for their operational employees within their organization, before using the performance measures as a basis for monetary compensation or nonmonetary rewards.