Employee satisfaction is a further PI dimension that that the current study suggests falls in the outcome domain. According to Spangenberg and Theron (2004, p.23) employee satisfaction “centres around satisfaction with the task and work context, empowerment, and career progress, as well as with outcomes of leadership, e.g. trust in and respect for the leader and acceptance of the leader’s influence”. This dimension is categorised as an outcome latent variable that is related to the work and the freedom that the work unit and the individuals within the work unit have to act in accordance to their judgement. Further, the conceptualisation of satisfaction as a work unit outcome latent variable refers to an important aspect that hasn’t been suggested yet, namely that of a leader. A leader is one of the most crucial factors of the work unit. An influential leader will encourage the group to perform better and the satisfaction with such a leader will contribute to the satisfaction of the work unit. The current study would suggest that leadership should not be included in the organisational work unit competency model as a separate latent variable. Rather leadership should be seen as a separate competency model that articulates in series with the organisational work unit competency model.
The manner in which a competency model was defined earlier as a three-domain structural model created a rather stark distinction between outcome latent variables and competency potential latent variables. Moreover, as conceptualised thus far, competency potential latent variables are seen to influence the level of proficiency that is achieved on competencies and that, in turn, affects the standards that are achieved on the outcome latent variables. The standards achieved on the outcome latent variables are, however not without consequence. They do not leave the unit and its behaviour unaffected. This line of reasoning firstly suggests the existence of feedback
loops between organisational unit outcome latent variables and organisational unit competency potential latent variables. A case in point would the path proposed by Theron et al. (2004) from market share/standing to capacity. It seems reasonable to argue that the reputation that an organisational unit has in the market will affect its ability to attract scarce financial and human resources. The question should, however, also be posed whether the strict/sharp separation between outcomes and competency potential latent variables is justified in all cases. Can outcomes latent variables also act as competency potential latent variables? Phrased differently the question is therefore whether in some cases the level of competence achieved on competencies do not directly feedback onto competency potential latent variables without the mediating effect of outcome latent variables?
Satisfaction that is currently proposed as an outcome variable presents a relevant case in point. Should satisfaction not rather be treated as a competency potential latent variable that is directly affected by the level of competence that is achieved on the competencies? Satisfaction can legitimately be argued to affect performance (i.e., competence achieved on the competencies) via its influence on effort exerted via its effect on the valence of high performance via its effect on the valence of the rewards that performance is instrumental in mediating (Van Eerde & Thierry, 1996). According to the expectancy theory of motivation (Van Eerde & Thierry, 1996), satisfaction is also affected by performance. The current study would argue from this latter perspective that satisfaction should remain as an outcome latent variable that feeds back onto a one or more competency potential latent variables. Motivation to perform could be on a higher level of aggregation an example of a competency potential latent variable that is affected by satisfaction. On a lower level of aggregation satisfaction would more specifically affect the valence of performance and through that the motivation to perform.
The suggested categorisation of the current eight PI performance dimensions in one of the three competency model domains is summarised in Table 2.2.
Table 2.2.
The categorisation of the Performance Index into domains
Dimension Domain Summary
Production and efficiency Outcome latent
variable Quantitative outputs such as meeting goals, quantity, quality and cost- effectiveness, and task performance. Core people processes Behavioural
competency Organisational effectiveness criteria such as goals and work plans, communication, organisational interaction, conflict management, productive clashing of ideas, integrity and uniqueness of the individual or group, learning through feedback and rewarding performance.
Work unit climate Outcome latent
variable Psychological environment of the unit, and gives an overall assessment of the integration, commitment and cohesion of the unit. It includes working atmosphere, teamwork, work group cohesion, agreement on core values and consensus regarding the vision, achievement-related attitudes and behaviours and commitment to the unit. Employee satisfaction Outcome latent
variable Satisfaction with the task and work context, empowerment, and career progress, as well as with outcomes of leadership
Adaptability Competency
potential latent variable
Flexibility of the unit’s management and administrative systems, core processes and structures, capability to develop new products or services and versatility of staff and technology. Overall, it reflects the capacity of the unit to appropriately and expeditiously change.
Capacity Competency
potential latent variable
Internal strength of the unit, financial resources, profits and investment, physical assets and materials supply and quality and diversity of staff. Market share/standing Outcome latent
variable Market share, competitiveness and market-directed diversity of products or services, customer satisfaction and reputation for adding value to the organisation
Future growth Outcome latent
variable Index of projected future performance and includes profits and market share, capital investment, staff levels and expansion of the unit.
(Spangenberg and Theron, 2004, p.23)
2.7 ADDITIONS TO THE PROPOSED WORK UNIT PERFORMANCE MODEL (OR