The Impact of Management Control on Employee Motivation and Performance in the Public Sector

Posted: 16 Nov 2018

See all articles by Berend van der Kolk

Berend van der Kolk

IE Business School, department of Accounting and Management Control

Paula van Veen-Dirks

University of Groningen - Faculty of Economics and Business

Henk J. ter Bogt

University of Groningen - Faculty of Economics and Business - Dept. of Accounting

Date Written: November 15, 2018

Abstract

This study examines the relations among various types of management control (MC), intrinsic and extrinsic motivation, and performance in the public sector. In this study, we draw on motivation crowding theory as well as self-determination theory to argue that four different types of MC (i.e., personnel, cultural, action, and results control) are likely to have an influence on intrinsic motivation and/or extrinsic motivation. Using survey data from 105 similar departments in the public sector, we test a structural equation model that relates the four MC types to intrinsic and extrinsic motivation, which in turn are linked with performance. We find that the use of personnel and cultural MC elements is positively associated with employees' intrinsic motivation, and that the use of results controls is positively associated with employees' extrinsic motivation. Moreover, both intrinsic motivation and extrinsic motivation are positively associated with performance. Taken together, these findings support the idea advocated by New Public Management proponents that results control can enhance employee motivation and performance in the public sector. However, the findings also highlight an important nuance; in addition to results control, cultural and personnel controls are also important, as they enhance intrinsic motivation and performance. This implies that a sole focus on results control is too narrow and leads to suboptimal levels of employee motivation and performance in the public sector.

Keywords: management control, motivation, object-of-control, control, package, self-determination theory

JEL Classification: M41

Suggested Citation

van der Kolk, Berend and van Veen-Dirks, Paula and ter Bogt, Henk J., The Impact of Management Control on Employee Motivation and Performance in the Public Sector (November 15, 2018). Available at SSRN: https://ssrn.com/abstract=3285295 or http://dx.doi.org/10.2139/ssrn.3285295

Berend Van der Kolk (Contact Author)

IE Business School, department of Accounting and Management Control ( email )

Calle Pedro de Valdivia 21
Madrid, Madrid 28006
Spain

HOME PAGE: http://www.ie.edu/business-school/faculty-and-research/faculty/berend-van-der-kolk/

Paula Van Veen-Dirks

University of Groningen - Faculty of Economics and Business ( email )

Postbus 72
9700 AB Groningen
Netherlands

Henk J. Ter Bogt

University of Groningen - Faculty of Economics and Business - Dept. of Accounting ( email )

P.O. Box 800
9700 AV Groningen
Netherlands
+31 50 363 7191 (Phone)

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