CHAPTER 2 LITERATURE REVIEW
2.1 Theory Literature Review
2.1.2 The AMO Theory
(1) The development process of AMO theory. The development of AMO theory has been a long process. Ability (A) has long been believed to be the main predictor of performance. Then, Vroom (1964) puts forward Expectancy Theory, believing that employee performance not only depends on the ability of employees to complete work tasks, but also on the motivation of employees to complete work tasks, i.e., performance
=f (ability×motivation). Later, through a large number of literature analysis and field
observation, Pringle and Blumberg (1982) believed that the (ability×motivation) provided by Vroom's expectancy theory was not enough to explain employee performance because it neglected a crucial factor, which is opportunity. Therefore, they believe that performance can be influenced by three aspects: capacity to perform, willingness to perform, and opportunity to perform. Moreover, these three factors interact with each other, so they proposed the following model: P=𝑓(𝑂 × 𝐶 × 𝑊). In other words, the three factors influencing employee performance include capacity to perform, willingness to perform and opportunity to perform. They must exist simultaneously and any of them cannot be thought to zero because assuming that any factor is zero, the performance will be zero. Similarly, assuming that any factor is too small, the performance will be significantly low. However, this breakthrough contribution was not highly regarded by scholars at that time. For a long time afterwards, when studying human resources and organizational performance, people still selectively neglected the role of opportunity in employee performance (Boselie, Dietz,
& Boon, 2005). Until 11 years later, Bailey (1993) emphasized the important role of opportunity in employee performance through an empirical study of employees in the garment industry, and pointed out that employees' ability (highly skilled), motivation (fully motivated) and job opportunity (employee participation and commitment) jointly promote the improvement of organizational performance. Seven years later, Appelbaum, Bailey, Berg, and Kalleberg (2000) reaffirmed the view that employee performance are the function of ability, motivation and opportunity through in-depth interviews with workers and managers of manufacturing industries and questionnaire survey on employee performance data. This contribution is often considered to be a sign of the formal emergence of AMO theory. Through interviews and questionnaire surveys on managers and employees of 45 enterprises, Bailey, Berg, and Sandy (2001) found that incentives, skills, and opportunity to participate were three important factors influencing employee performance and earnings. In this study, skills are equivalent to ability (A), incentives are equivalent to motivation (M), and opportunity to participate is opportunity (O). Therefore, it can be regarded as an echo of the AMO theory. Since then, the AMO theory has gradually become a classic theory in the field of performance research and strategic human resource management in the early 21st century (Boselie et al., 2005).
(2) The main contents of the AMO theory. The AMO theory has three components, namely ability (A), motivation (M), and opportunity (O). According to the theory, the three most important factors influencing employee performance are ability (A), motivation (M) and opportunity (O), which can be expressed as Performance = f {employees' ability, motivation and opportunity}. In other words, employee performance mainly depends on the following three factors. Ability (A), that is, employees need to have relevant knowledge and skills required to complete work tasks.
Motivation (M), it is not enough for employees to only have the knowledge and ability to complete the task. They also need to have the motivation to perform the responsibility and complete the task, so as to bring their actual ability into play. Opportunity (O), it is not enough to have ability and motivation. From the perspective of strategic human resource management, it is also necessary to provide appropriate opportunities and support for employees to ensure that they can effectively complete their tasks in the organization and work environment.
With the development of the AMO theory, two different views and models have emerged. The first one is represented by a formula, that is P = ƒ (A × M × O). According to this view, the three factors that influence employee performance, namely ability (A), motivation (M) and opportunity (O), interact with each other and exert influences on employee performance as a whole through their final interaction. In other words, neither ability (A), motivation (M) nor opportunity (O) can independently ensure the performance of employees. In extreme cases, if any of the three factors is absent, that is, if one or two or three factors are zero, employee performance is impossible (Pringle
& Blumberg, 1982; Delery, 1998; Lepak, Liao, Chung, & Harden, 2006). The second one is represented by a formula P = ƒ (A + M + O). AMO's interactive model has ample theoretical support, but has never been empirically validated (Siemsen, Roth, &
Balasubramanian, 2008). Therefore, some other scholars believe that any of the three factors can independently influence employee performance, and are not affected by other factors (Cummings, L. L., & Schwab, 1973; Boxall, P., & Purcell, 2003).
(3) Brief summary. To sum up, the current academic consensus on the AMO theory is that ability (A), motivation (M) and opportunity (O) are indeed the most important factors affecting employee and organizational performance. But whether these three factors work independently or interactively is debatable. Since there is no
empirical evidence for the interaction model, the independent additive model is adopted in this study, namely the three factors: ability (A), motivation (M) and opportunity (O), all of which have independent influences on performance (P). At the same time, according to the research purpose and the characteristics of the public sector, this study operated ability (A) as public service self-efficacy, motivation (M) as public service motivation, opportunity (O) as organization service climate, performance (P) as employee service performance, and tested the applicability of the AMO theory in China's public sector. Then, this study explored the relationship between servant leadership, public service self-efficacy, public service motivation, organizational service climate and employee service performance, and uncovered the "black box" that showed servant leadership affects employee service performance.