The Role of Financial Performance in Motivating Polish Municipal Employees

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.