The Impact of Government Performance Evaluation on Environmental Performance in Organizations

Abstract Using GPE performance gaps (the difference between actual and standard levels of performance), this article explores the relationship between the GPE outcomes of public organizations and their environmental performance (EP). We utilize Korean GPE data related to qualitative/quantitative and financial/non-financial performance indicators that the government uses to evaluate public organizations. The GPE does not cover every important environmental activity in which public organizations may engage; the EP measure can incorporate results from all environmental activities, even those excluded from the GPE. Our investigation revealed that the EP of public organizations varied according to their GPE performance gaps. Low GPE performers favored GPE-included environmental activities over GPE-excluded environmental activities, but high GPE performers engaged in environmental activities were excluded from the GPE. A negativity bias occurs when public organizations adjust their environmental activities in response to GPE performance gaps. For environmental activities excluded from the GPE, low GPE performers avoided them more than high GPE performers engaged in them. These findings indicate the importance of a well-designed organizational performance evaluation for balanced engagement in environmental initiatives. This article is of theoretical interest to academics and has practical value for practitioners.