Date of Award

8-2016

Document Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Legacy Department

Industrial-Organizational Psychology

Committee Member

Dr. Cynthia L.S. Pury, Committee Chair

Committee Member

Dr. Patrick H. Raymark

Committee Member

Dr. Fred S. Switzer, III

Committee Member

Dr. Sarah Winslow

Abstract

The purpose of the these studies was to develop and validate a grounded theory of performance management in United States family microbusinesses, or businesses with fewer than 10 employees, at least one of whom is a family member. U.S. microbusinesses comprise 75% of private sector businesses and account for 12 million employees (Bureau of Labor Statistics, 2015). Despite their majority presence, industrial-organizational (I-O) psychology research has often focused on larger businesses (Levy, 2006; May, 1997; Tetrick, Slack, Da Silva, & Sinclair, 2000), potentially limiting our knowledge and relevance to considerable numbers of businesses and employees.In Study 1, I conducted semi-structured interviews with 12 microbusinesses managers about managing and motivating their employees’ performance. The central phenomenon driving performance management in these businesses was caring for employees as individuals. Theoretical relationships with other categories influencing or affected by this phenomenon – such as differentiating communication across employees and resulting employee performance – were also grounded in the data. Additionally, participants evaluated the fit of current I-O psychology recommendations for performance management to their own businesses, and generally reported that the same objectives were important (e.g., good employee performance), but the process of managing employees was generally more as-needed or event-based and personalized to suit each employee best. In Study 2, I collected quantitative self-report data from a new sample of microbusiness managers with up to 20 employees (N = 235, including 128 responses from family businesses with less than 10 employees) and largely supported selected theoretical propositions from Study 1. Results indicated that creating a family or personalized environment typically improved employee performance and customer service quality, as well as potentially reduced employee turnover. However, communication differentiation was positively associated with employee turnover, and additional mixed effects were found based on business sizes. These studies extend I-O psychology and the theory of performance management to the domain of microbusinesses and provide concrete recommendations for the practice of performance management in these businesses.

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