Absolute Performance Standard - Definition
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What is an Absolute Performance Standard?
An absolute performance standard refers to a gauge used in evaluating the performance of businesses and employees. It serves as a model standard and seeks to measure how well an organization is performing and how employees are also faring working towards the goals of the organization. Standards should also be specific meaningful and applicable in measuring the quality, cost, quantity, and aptness of organizations.
The Absolute performance standard is attainable only in theory and not in measuring the absolute performance of businesses.
Academic Research on Absolute Performance Standard
- Does pay for performance increase or decrease perceived self-determination and intrinsic motivation?, Eisenberger, R., Rhoades, L., & Cameron, J. (1999). Journal of personality and social psychology, 77(5), 1026. This paper presents laboratory and field studies which examined the relationships of reward for high performance with perceived self-determination and intrinsic motivation. One of the studies found that pay for meeting a performance standard had beneficial effects on college students' perceived self-determination and competence, expressed task enjoyment and free time spent performing the task.
- Relative performance evaluation and risk taking in delegated investment decisions, Chow, C. W., & Haddad, K. M. (1991). Decision Sciences, 22(3), 583-593. This study utilizes a laboratory experiment to test the effect of relative performance evaluation on the risk-aversion of delegated investment decisions. The findings suggest that relative performance evaluation may reduce the reluctance of managers to adopt risky capital investments mostly in firms which operate in high-risk economic or technological environments.
- Interrater correlations do not estimate the reliability of job performance ratings, Murphy, K. R., & DeShon, R. (2000). Personnel Psychology, 53(4), 873-900. This paper uses generalizability theory to show why rater variance is not correctly interpreted as a measurement error and also to show how these systematic rater effects can influence the reliability estimates and validity coefficients. It also presents conditions under which interrater correlations can either overestimate or underestimate reliability coefficients and also discuss the reasons for low interrater correlations.
- Between-individual comparisons in performance evaluation: A perspective from prospect theory., Wong, K. F. E., & Kwong, J. Y. (2005). Journal of Applied Psychology, 90(2), 284. This paper investigates how between-individual comparisons affect performance evaluations in rating tasks. It demonstrates a systematic change in the perceived difference across rates as a result of changing the way of expressing performance information. The paper also draws upon prospect theory to offer a theoretical framework that describes the between-individual comparison aspect of performance evaluation.
- The impact of performance-contingent rewards on perceived autonomy and competence, Houlfort, N., Koestner, R., Joussemet, M., Nantel-Vivier, A., & Lekes, N. (2002). Motivation and Emotion, 26(4), 279-295. This article presents two studies that examine the impact of performance-contingent rewards on perceived autonomy, competence, and intrinsic motivation. The results of these studies aid in resolving the Cognitive Evaluation Theory and Eisenberger Rhoades different position on the impact of performance-contingent rewards on autonomy.