The Role of Financial Performance in Motivating Polish Municipal Employees

• DOI: 10.1177/0734371X16685600
• Date: 01 March 2019
• Author: Palina Prysmakova,Michele Tantardini,Tomasz Potkański
• Published date: 01 March 2019
• Subject Matter: Articles

https://doi.org/10.1177/0734371X16685600

Review of Public Personnel Administration

2019, Vol. 39(1) 75 –105

© The Author(s) 2017

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DOI: 10.1177/0734371X16685600

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Article

The Role of Financial

Performance in Motivating

Polish Municipal Employees

Palina Prysmakova1, Michele Tantardini2,

and Tomasz Potkański3

Abstract

This article explores the relationship between employees’ public service motivation

(PSM) and public administrations’ financial performance from the perspective

of human resource management (HRM). The purpose of this article is twofold:

first, we seek to understand the relationship between organizational financial

performance and individual-level PSM by focusing on how financial performance is

associated with PSM. Second, while acknowledging previous findings on the impact

of employees’ work attitudes on performance, we explore the possibility of an

opposite causality. After assessing several theoretical and empirical propositions

that support an additional direction of causality, we use a sample of municipal

employees from Poland to test how financial performance affects individual PSM.

By analyzing five financial indicators, we find that financial performance might

predict individuals’ PSM. We also propose that a negative relationship occurs

when organizations achieve financial goals through HRM practices that negatively

affect employees, such as worsening of work conditions, increased workload, and

inadequate remuneration.

Keywords

public service motivation, financial performance, local government, Poland

1Florida Atlantic University, Boca Raton, USA

2Penn State Harrisburg, Middletown, USA

3Collegium Civitas, Warsaw, Poland

Corresponding Author:

Michele Tantardini, Penn State Harrisburg, 777 W. Harrisburg Pike, Middletown, PA 17057, USA.

Email: mut98@psu.edu

685600ROPXXX10.1177/0734371X16685600Review of Public Personnel AdministrationPrysmakova et al.

research-article2017

76 Review of Public Personnel Administration 39(1)

Introduction

Research on how human resource management (HRM) affects employee and organi-

zational outcomes in the public sector continues to expand; however, researchers must

still gain deeper understanding of several key areas, including the methods organiza-

tions can use to promote individual motivation and the consequences of individual

motivation on organizations.

Understanding the effects of organizational antecedents on performance helps human

resource (HR) managers improve employees’ motivation to achieve desired organiza-

tional outcomes, which is crucial for public organizations to properly function (Brewer,

2008; Messersmith, Patel, Lepak, & Gould-Williams, 2011). One important question

that has only partially been explored in the public administration literature is the relation-

ship between organizational financial performance and employees’ public service moti-

vation (PSM). Meanwhile, the relationship that links HRM practices with PSM and

other employee outcomes has been explained theoretically and has been tested empiri-

cally by several authors (i.e., Gould-Williams et al., 2014). The present article contrib-

utes to the literature by examining global organizational characteristics (i.e., financial

performance) to determine whether and how these characteristics might affect PSM.

Assessing the causality that flows from the organizational level to the individual

level has several potential implications for PSM research and HRM practice. First, in

the reciprocal model, global organizational characteristics significantly affect PSM,

even though these characteristics are somewhat detached from the individual employee

level. Second, in addition to the traditionally studied individual antecedents or organi-

zational antecedents created by employers (e.g., work environment, managerial prac-

tices and attitudes), our study examines the objective variables of the global

organizational context, which are not biased by employees’ perception, yet, might

affect PSM. Third, our contribution to the literature provides better understanding of

the complex interrelations of individual- and organizational-level characteristics

within a public organization.

Below, we review and summarize theoretical and empirical studies on the relation-

ship between organizational variables and individual work attitudes. Next, we link the

concept of PSM with overall public sector financial performance. Subsequently, we

conduct a simplified empirical study on a sample of Polish cities. This empirical com-

ponent further explains the situations in which financial outcomes could be positively

and negatively correlated with PSM. While not without limitations, the present study

illustrates our propositions and invites researchers to further investigate the topic.

Theoretical Frameworks

This article is based on two HRM frameworks that help explain interconnections between

financial performance and employee motivation. The first framework, advanced by

Paauwe and Boselie (2005), proposes three types of HRM performance outcomes.

Financial outcomes such as profits, solvency, and external funding acquisition are

important in the management of public administrations. Organizational outcomes such