Agency autonomy, public service motivation, and organizational performance

While agency theory predicts mixed impacts of agency autonomy on organizational performance conditioned by result-based controls, stewardship theory predicts positive effects. This study contrasts the two views by introducing public service motivation (PSM) to this debate. As the PSM increases, the employees move closer to the ideal type of stewards, and thus agency autonomy should have a larger impact on organizational performance. Using the 2005 and 2010 Merit Principles Surveys, the empirical tests support this proposition. This study bridges the literature on agency autonomy and PSM by highlighting interactions between organizational structures and employee motivations in shaping organizational performance.