CONSIDERING NONLINEAR CONNECTIONS IN THE INDIVIDUAL PERFORMANCE MANAGEMENT MODEL

Abstract

To discuss nonlinear connections between constructs of the conceptual model of individual employee performance management in Slovenian service sector. Constructs were analyzed with the validated measurement instrument, adapted to the Slovenian context due to preliminary research. Existence of significant nonlinear connections between them was checked by structural equation modeling. The software tool Warp PLS 5.0. based on the Warp2 algorithm was used. Holistic employee development methods significantly improve employees’ work satisfaction, individual performance, and well-being. The quality of the conceptual model obtained with Warp PLS 5.0 supports the consideration of nonlinear connections between constructs. They exist between the constructs of the conceptual model of the individual employee performance management system in e.g. the Slovenian service sector. Results make employees and managers aware that existing performance management systems are inadequate. Hence, one must place this knowledge of the situation and trends of individual work performance as the basis for sensible management action, including new performance management systems based on a requisitely holistic approach, focusing on the individuals and their performance, not on the performance management system. The designed employee performance model is individually oriented and applies mentoring, coaching, sponsorship and intergenerational cooperation. It clarifies how one can use holistic employee development to improve individual employee performance, job satisfaction, and well-being.