ABSTRACT

This research has done examining managerial perceptions of the relationship between target setting system (TSS) and managers’ attitudes and behavior. On the basis of the Expectancy-Valence (E-V) theory of motivation, a model is developed and a number of propositions are advanced about the interactive effect of participation, target attainability, target specificity and commitment on managerial motivation and performance. We set this research by using a partial least squares (PLS) methodology, there are 47 samples, was collected directly and used clustered random sampling. The perceptions of 47 middle managers in a Central Java manufacturing companies are analysed. The results partially support the model. They show that participation tends to affect the perceived commitment to the targets directly, through the perceived commitment tends to managers’ performance. Target specificity has a significant influence to be attainable for setting the targets, however, target attainability doesn’t have a significant influence on managers’ motivation and subsequent performance. Further, managerial perceptions of the specificity and attainability of targets appear, not to contribute to target commitment, which have a negative effect on managers’ performance. Overall, the study’s findings are different from the consistence of conclusions of goal setting theory about the motivational potential to be attainable on performance targets. However, as well as with the literature on the participation in the target setting process has important implications for the way targets are set within the performance measurement, evaluation and reward system (PMERS).

Key word : middle management motivation, incentives, target setting, performance