Effects of a Psychologically Based Management System on Work Motivation and Productivity

Introducing group work as a principle of work organisation to increase productivity in organisations operating in a globalising economy requires new methods of measuring performance in groups. This study describes the introduction of a measurement instrument as part of a participative productivity management (PPM) system in a medium sized factory producing rubber compounds. Using a simple quasi-experimental design, the PPM intervention was found to produce an increase in productivity and was also related to goal clarity, but not to higher group cohesion. It is concluded that PPM helps to increase productivity mainly by increasing task and goal clarity, and that increases in productivity can only be reached reliably when no competing system of performance appraisal exists besides PPM.