IS SELF-EFFICACY POSITIVELY RELATED TO PERFORMANCE?

Is Self-Efficacy Positively Related to Performance? A Review of the Literature Miguel Manuel dos Santos Vemba The Pennsylvania State University

Author Note This paper was prepared for the MBA program course MGMT501 Organizational Behavior, lectured by Dr. Denise Potosky.

IS SELF-EFFICACY POSITIVELY RELATED TO PERFORMANCE? Is Self-efficacy Positively Related to Performance? A Review of the literature

It is often said that the road to success is paved with determination. Warren Buffet, one of the foremost business thinkers in the financial industry, was rejected by the Harvard Business School. In an interview with the Wall Street Journal, he said that although the rejection was crushing at the time, it turned out for the better, when it prompted him to go to Columbia. He further added, You learn that a temporary defeat is not a permanent one. In the end, it can be an opportunity (Shellenbarger, 2010). Like Buffet, Rowling also had her fair share of rejection; her book, Harry Potter and the Philosophers Stone, was rejected by twelve publishers before being picked up by a small London house (Beck, 2008). Richard Fuld Jr., the former CEO of Lehman Bros., was equally determined; his rise to power saw him connected to five board members in five different organizations across five different industries (Bloomberg Finance LP, 2002). However, unlike Buffet and Rowling, he did not ultimately succeed; arguably, he led the 2008 financial collapse. Given that success is but the outcome of good performance, the argument can be made that he did not perform well either. Researchers agree that good performance involves the individuals problem solving prowess (Kirton, 2006); however, how performance is enacted is still researched to date. While theres agreement on the importance of the individuals physical, social, and psychological well-being to the achievement of personal and therefore organizational performance, consensus dissolves around what mechanisms should be enacted to promote individual performance. This literature review examines one mechanism used to promote individual performance self-efficacy. The paper addresses the enquiry of whether self-efficacy is positively related to performance in general, and work performance in particular. In the main

IS SELF-EFFICACY POSITIVELY RELATED TO PERFORMANCE? body of the paper, a brief explanation of the self-efficacy mechanism is provided first; followed by its main assumptions, hypotheses, and implications; and, in the end, the counter instances to the espoused positive relationship between self-efficacy and performance are discussed. This

line of inquiry points out to some limitations of the advocated positive relationship between selfefficacy and performance, and suggests the need for a more systemic level of analysis. Understanding the Self-Efficacy Mechanism Self efficacy refers to one's belief in one's capability to perform a specific task (Bandura, 1977). It arises from the gradual acquisition of complex cognitive, social, linguistic, and/or physical skills through experience (Bandura, 1982). There are three important aspects of this definition; first, self-efficacy is a comprehensive summary or judgment of perceived capability for performing a specific task; second, the efficacy judgment changes over time as new information and experience are acquired; and third, self-efficacy reflects a more complex and generative process involving the construction and orchestration of adaptive performance to fit changing circumstances (Bandura & Wood, 1989; Gist & Mitchell, 1992). Self-efficacy is developed through the use of four categories of experience: enactive mastery, vicarious experience, verbal persuasion and physiological arousal (Bandura, 1977; Gist & Mitchell, 1992). Each source of efficacy information (category of experience) has its own influence on efficacy, but may also draw, to a lesser extent, on one or more of other sources of efficacy. Enactive mastery is based on personal experience; successes raise mastery expectations repeated failures lower them. Vicarious experience is based on observation and modeling; seeing others perform threatening activities without adverse consequences can generate expectations in observers that they too will improve if they intensify and persist in their efforts. Verbal persuasion is based on social evaluation; people are led, through suggestion, into believing that

IS SELF-EFFICACY POSITIVELY RELATED TO PERFORMANCE? they can cope successfully with what has overwhelmed them in the past. Finally, physiological arousal is based on emotional state; stressful and taxing situations generally elicit emotional

arousal that, depending on the circumstances, might have informative value concerning personal competency (Bandura, 1977). Although these experiences influence efficacy perceptions, it is the individuals cognitive appraisal and integration of these experiences that ultimately determine self-efficacy (Gist & Mitchell, 1992). In sum, self-efficacy is an important motivational construct. It influences individual choices, goals, emotional reactions, effort, coping, and persistence. Self-efficacy also changes as a result of learning, experience, and feedback (Gist & Mitchell, 1992). The Self-Efficacy Mechanism: Main Assumptions, Hypothesis and Implications The self-efficacy theory is based on the principal assumption that psychological procedures, whatever their form, serve as means of creating and strengthening expectations of personal efficacy (Bandura, 1977). The basic premise of the self-efficacy theory is that selfpercepts of efficacy influence thought patterns, actions, and emotional arousal (Bandura, 1982). It is hypothesized that expectations of personal efficacy determine whether coping behavior will be initiated, how much effort will be expended, and how long it will be sustained in the face of obstacles and aversive experiences (Bandura, 1977). Thus, strong self-efficacy is positively related to higher performance accomplishments. Several empirical research studies have set out to investigate the relationship between self-efficacy and performance. Most of them have yielded consistent findings on the positive relationship between self-efficacy and performance in general, and work-performance in particular. Of note, in the context of this paper, were the initial micro-analytic studies that investigated the effects of self-efficacy on behavioral change (Bandura, 1977), and the meta-

IS SELF-EFFICACY POSITIVELY RELATED TO PERFORMANCE? analytic studies that investigated the relationship between self-efficacy and work performance (Jackson, Judge, Rich, Scott, & Shaw, 2007; Luthans & Stajkovic, 1998). Bandura (1977) was the first researcher to both propose, and investigate the relationship between self-efficacy and performance. To test derivations from social learning analysis of the process of change, he conducted an experiment wherein phobic adults, with fear of snakes, received treatments designed to create differential levels of efficacy expectations; the relationship between self-efficacy and behavioral change was then analyzed in detail. The participants (test subjects) were exposed to two categories of experience enactive mastery and vicarious experience as well no experience at all. Participants exposed to direct mastery experiences were assisted by whatever induction aids needed to engage in progressively more threatening interactions with a boa constrictor. After completing all the therapeutic tasks, which

included diverse snake-handling activities, the subjects engaged in a brief period of self-directed mastery. Subjects exposed to vicarious experience did not engage in any behavior; they simply observed the therapist perform the same activities for a certain period. The level, strength, and generality of the subjects' efficacy expectations were measured at critical junctures in the change process. Subjects privately designated those tasks they considered themselves capable of executing, and rated the strength of their expectations for each of the tasks, from great uncertainty to complete certainty. They also rated their efficacy expectations for coping with snakes of the same variety used in treatment, as well as dissimilar snakes; this enabled the measurement of the generality of their efficacy expectations. Different phobic objects were used to provide a test of the generalized effects of changes in efficacy expectations along a dimension of similarity to the threat used in treatment (Bandura, 1977).

IS SELF-EFFICACY POSITIVELY RELATED TO PERFORMANCE? The results showed that performance changes corresponded closely with the magnitude of expectancy change; participants exposed to enactive mastery produced more generalized increases in efficacy expectations, and more generalized behavioral changes than those exposed to vicarious experience, which in turn produced more increases in efficacy expectations than those participants not exposed to any experience. Moreover, further analyses showed that, in all conditions, the stronger the efficacy expectations, the higher the likelihood that a particular task would be completed successfully. The self-efficacy theory systemizes one important finding; it predicts accurately the magnitude and generality of behavioral change for efficacy expectations induced inactively and vicariously (Bandura, 1977). Various other lines of research, using different moderators, and this same methodological structure for setting up and testing research hypotheses, have corroborated this finding. Luthans and Stajkovic (1998) conducted a meta-analytic study to investigate the

relationship between self-efficacy and work related performance. The authors initially controlled the study for the level of task complexity (low, medium, and high), and then for the type of study setting (simulated-lab vs. actual-field). The results of the study showed that there is an overall positive relationship between self-efficacy and work-related performance. However, they also found that the relationship between self-efficacy and performance is moderated by the level of task complexity; the higher the task complexity, the weaker the relationship between selfefficacy and performance. Additionally, they found that the relationship between self-efficacy and performance is further moderated by the type of study setting (actual vs. simulated) for each level of task complexity; simulated settings produce stronger relationships between self-efficacy and performance, as compared to actual settings, for each level of task complexity.

IS SELF-EFFICACY POSITIVELY RELATED TO PERFORMANCE? Jackson, Judge, Rich, Scott and Shaw (2007) also conducted a test to determine the

relationship between self-efficacy and work-related performance; they controlled for personality (conscientiousness, agreeableness, extraversion, openness, and emotional stability), intelligence or general mental ability, and job or task experience. Results of the meta-analysis suggested that, across studies, the incremental validity of self-efficacy on task, and especially job performance is substantially attenuated by the inclusion of important individual differences. Specifically, they found that although self-efficacy was moderately correlated with performance, once the individual differences were taken into account, the predictive validity of self-efficacy reduced dramatically (Jackson et al., 2007). Thus, the contribution of self-efficacy relative to purportedly more distal variables cognitive ability, personality (Big Five traits), and experience is relatively small; self-efficacy predicted performance in jobs or tasks of low complexity but not those of medium or high complexity, and self-efficacy predicted performance for task but not job performance. The meta-analytic study presented by Luthans and Stajkovic (1998) , and that presented by Jackson et al. (2007) corroborated the findings espoused by the self-efficacy theory. However, they also raised awareness to moderators that might affect the strength of the relationship between self-efficacy and performance. Taking note of these limitations, other researchers investigated them further and identified counter instances in the self-efficacy paradigm; they advocated that, in the presence of certain moderators, self-efficacy does not only decrease in its predictive strength, but can also have a negative effect on work performance. Counter Instances in the Self-Efficacy Paradigm A new line of research studies have questioned the validity of the espoused positive relationship, and reciprocity between self-efficacy and performance. Specifically, the research

IS SELF-EFFICACY POSITIVELY RELATED TO PERFORMANCE? studies have questioned its validity at a within-person and across-time level of analysis (Putka, Thompson, Tischner, & Vancouver, 2002), across different levels of analysis and specificity (Neal & Yeo, 2006), and under conditions of performance ambiguity (DeShon & Schmidt, 2010). Putka, Thompson, Tischener, and Vancouver (2002) conducted a meta-analytic study with an undergraduate student test sample to investigate the relationship between self-efficacy and performance. To gauge the magnitude and strength of the self-efficacy measure, they asked students to identify in how many attempts they would be most likely to find the solution to a particular game, and to determine how likely they were to find the solution to the game by a

certain stage in the following trial, respectively. The students performance was measured by the stage at which the solution was found. Moreover, to induce high self-efficacy, experimental manipulations were designed to lead students into believing that they had found the solution by a certain stage (usually close to the optimal stage). The results of the study showed that a manipulation designed to increase self-efficacy did increase self-efficacy, but had no overall relation to performance at the between-person level. Moreover, at the within-person level, the manipulation not only increased self-efficacy but also decreased performance in the next game (Putka et al., 2002). The authors concluded that when self-efficacy is relatively high, individuals more readily feel that they have thought through all the feedback. This leads them to commit too early. However, if they commit too early, they are more likely to make more mistakes. On the other hand, when self-efficacy is low, individuals are more likely to be circumspect, and ponder the feedback more thoroughly. Thus, they are less likely to make as many mistakes; hence the negative relationship between self-efficacy and performance.

IS SELF-EFFICACY POSITIVELY RELATED TO PERFORMANCE? Neal and Yeo (2006) replicated the findings of Putka et al.s (2002) research, and added new conclusions of their own. They conducted a meta-analysis to develop and test a theoretical account of the way in which efficacyperformance relations change throughout skill acquisition at different levels of analysis and specificity. Specifically, the aim of the research was to extend Putka et al.s (2002) research; this goal was achieved by using tasks that allowed growth in both task-specific self-efficacy, and performance. Moreover, they sought to examine the effects of general self-efficacy and task-specific self-efficacy in tasks where efficacy and performance

changed over time, and to examine the way in which the efficacyperformance relations changed over time. The results of the meta-analysis showed that task-specific self-efficacy was negatively associated with task performance at the within-person level. On the other hand, average levels of task-specific self-efficacy were positively related to performance at the between-persons level, and mediated the effect of general self-efficacy. The key findings from the research related to the dynamic effects; The results showed that self-efficacy effects could change over time, but it depended on the level of analysis and specificity at which self-efficacy was conceptualized (Neal & Yeo, 2006). DeShon and Schmidt (2010) also investigated the relationship between self-efficacy and performance, with particular interest in the espoused negative relationship of the two parameters, and suggested that performance ambiguity might be a moderator of the within-person relationship of self-efficacy and performance. The authors sought to explicitly compare the within-person relationship between self-efficacy and performance under conditions of high and low ambiguity, and to evaluate the presumed role of effort allocation as a mediating process underlying this relationship. They argued that if effort is a mediating mechanism, the interactive

IS SELF-EFFICACY POSITIVELY RELATED TO PERFORMANCE? effects of self-efficacy and ambiguity on effort should be similar to their expected effects on performance; further, the role of effort as an intervening variable should be borne out more

10

formally in tests of mediation. The results of the study showed that self-efficacy was negatively related to subsequent performance under conditions of high ambiguity but was positively related to performance when performance ambiguity was low. Moreover, they determined that the interaction between self-efficacy and performance ambiguity, and its effect on performance were mediated by task related effort. Conclusion The positive relationship between self-efficacy and performance has been extensively investigated by a variety of methodologies and analytic procedures (Luthans & Stajkovic, 1998; Robertson & Sadri, 1993); evidence from these meta-analytic investigations were consistent in showing that efficacy beliefs contribute significantly to the level of performance (Bandura & Locke, 2003). According to Bandura (2003), efficacy beliefs predict not only the behavioral functioning between individuals at different levels of perceived self-efficacy but also changes in functioning in individuals at different levels of efficacy over time and even variation within the same individual in the tasks performed and those shunned or attempted but failed (Bandura & Locke, 2003). However, despite some criticism, evidence suggesting the contrary was also found to be relevant (Thompson, Vancouver, & Williams, 2001). Neal and Yeo (2006) addressed the methodological criticism that Vancouver et al.s (2001; 2002) research received, and have thus further reinforced the new line of thought self-efficacy can be self-debilitating. Still much research is needed to conclusively end this debate. Trying to provide some enlightenment into the matter, some researchers have suggested that both positive and negative

IS SELF-EFFICACY POSITIVELY RELATED TO PERFORMANCE? relationships are possible (Brass, Lindsley, & Thomas, 1995). Brass, Lindsley, and Thomas

11

(1995), in their spiral theory, argued that the efficacy-performance relationship is both positive and cyclic. That is, performance affects self-efficacy, which in turn affects performance, in a continuous loop. Because of the reciprocal causation, these iterative loops often become deviation-amplifying (Brass et al., 1995). Thus, in a deviation-amplifying loop, a deviation in one variable (say, a decrease in self-efficacy) leads to a similar deviation in another variable (lower performance), which, in turn, continues to amplify; the cyclic nature of the self-efficacyperformance relationship can result in a downward (decreasing self-efficacy and performance) or upward (increasing self-efficacy and performance) spiral. The spiral theory points to the cyclical interconnectedness between self-efficacy and performance, and thus the need for a systemic level of enquiry. Systemically analyzing this relationship requires the consideration of all determinant factors in tandem rather than individually, and cyclically rather than linearly. In the context of this paper, this means accounting for the effects of individual differences, task complexity, cognitive ability, task experience, task specificity, performance ambiguity, time, and the overall environment, all acting simultaneously, and through cyclical feedback structures to effect behavioral change. Such a consideration would help explain the observed counter instances in the paradigm. It is the authors belief that, research that aims to understand the dynamics of the non-linear relationship between all moderators, and their effect on self-efficacy and performance may break new ground, and thus cause a revolution in the paradigm. A revolution in the paradigm would in turn promote its evolution to a more embracing theory.

IS SELF-EFFICACY POSITIVELY RELATED TO PERFORMANCE? References Bandura, A. (1977). Self-Efficacy:Towards a Unifying Theory of Behavioral Change. Psychological Review, 84(2), 191-215.

12

Bandura, A. (1982). Self-Efficacy Mechanism in Human Agency. American Psychologist, 37(2), 122-147. Bandura, A., & Locke, E. A. (2003). Negative Self-Efficacy and Goal Effects Revisited. Journal of Applied Psychology, 88(1), 87-99. Bandura, A., & Wood, R. E. (1989). Effect of Perceived Controllability and Performance Standards. Journal of Personality and Social Psychology, 56(5), 805-814. Beck, M. (2008, April 29). If at First You Don't Succeed, You're in Excellent Company. The Wall Street Journal, p. D.1. Bloomberg Finance LP. (2002, January 14). Richard S. Fuld Jr.: Lehman Bros. Business Week, p. 57. Brass, D. J., Lindsley, D. H., & Thomas, J. B. (1995). Efficacy-Performance Spirals: A Multilevel Perspective. Academy of Management Review, 20(3), 645-678. DeShon, R. P., & Schmidt, A. M. (2010). The Moderating Effects of Performance Ambiguity on the Relationship Between Self-Efficacy and Performance. Journal of Applied Psychology, 95(3), 572-581. Gist, M. E., & Mitchell, T. R. (1992). Self-Efficacy:A Theoretical Analysis of its Determinants and Malleability. Academy of Management Review, 17(2), 183-211. Jackson, C. L., Judge, T. A., Rich, B. L., Scott, B. A., & Shaw, J. C. (2007). Self-Efficacy and Work-Related Performance: The Integral role of Individual Differences. Journal of Applied Psychology, 92(1), 107-127. Kirton, M. J. (2006). Adaption-Innovation in the context of diversity and change. New York: Routledge. Luthans, F., & Stajkovic, A. D. (1998). Self-Efficacy and Work-Related Performance: A MetaAnalysis. Psychological Bulletin, 124(2), 240-261. Neal, A., & Yeo, G. B. (2006). An Examination of the Dynamic Relationship Between SelfEfficacy and Performance Across Levels of Analysis and Levels of Specificity. Journal of Applied Psychology, 91(5), 1088-1101.

IS SELF-EFFICACY POSITIVELY RELATED TO PERFORMANCE? Putka, D. J., Thompson, C. M., Tischner, E. C., & Vancouver, J. B. (2002). Two Studies Examining the Negative Effect of Self-Efficacy on Performance. Journal of Applied Psychology, 87(3), 506-516. Robertson, I. T., & Sadri, G. (1993). Self-Efficacy and Work-Related Performance: A Review and Meta-Analysis. Applied Psychology: An International Review, 42(2), 139-152.

13

Shellenbarger, S. (2010, March 24). Before They Were Titans, Moguls and Newsmakers, These People Were...Rejected - At College Admission Time, Lessons in Thin Envelopes. The Wall Street Journal, p. D.1. Thompson, C. M., Vancouver, J. B., & Williams, A. A. (2001). The Changing Signs in the Relationship Among Self-Efficacy, Personal Goals, and Performance. Journal of Applied Psychology, 86(4), 605-620.