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Revisiting the Functional Properties of Self-Efficacy: A Dynamic Perspective

Gillian B. Yeo and Andrew Neal
Journal of Management 2013 39: 1385 originally published online 21 May 2013
DOI: 10.1177/0149206313490027

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490027JOMXXX10.1177/0149206313490027Journal of Management / Month
XXXXYeo, Neal / Revisiting Self-Efficacy
2013

The Journal of Management continues to invite com- Journal of Management

mentaries on the issues presented by Bandura (2012),
Vancouver (2012), Jackson et al. (2012), Bledow
(2013), and Yeo and Neal (herein). Please submit to
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DOI: 10.1177/0149206313490027
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Guest Editorial

Revisiting the Functional Properties of Self-

Efficacy: A Dynamic Perspective
Gillian B. Yeo
University of Western Australia
Andrew Neal
University of Queensland

This paper is a response to Bandura’s 2012 Guest Editorial, which defends the functional prop-
erties of self-efficacy by criticizing published studies that have demonstrated a negative rela-
tionship between self-efficacy and performance at the within-person level of analysis. We focus
on the theoretical and methodological criticisms that Bandura has made in relation to our (Yeo
& Neal) 2006 piece that examined the dynamic relationship between self-efficacy and perfor-
mance across levels of analysis and specificity. In doing so, we explain the importance of
designing and analyzing studies involving self-efficacy at the within-person level of analysis. We
then demonstrate how the concept of resource allocation can explain the co-existence of positive
and negative dynamic self-efficacy effects across the between- and within-person levels of
analysis. We acknowledge the great strides that researchers have made in understanding the
complex and dynamic processes involving self-efficacy and encourage researchers to continue
this collective effort.

Acknowledgments: This work was supported by Australian Research Council Grants DP0984782 (Chief
Investigators Gillian Yeo and Shayne Loft) and DP120100852 (Chief Investigators Andrew Neal, Gillian Yeo, and
Hannes Zacher).We would like to acknowledge the valuable feedback provided by James Beck in the preparation
of this manuscript.

Corresponding author: Gillian Yeo, Business School, University of Western Australia, Crawley, Perth, Western
Australia 6009, Australia.

E-mail: gillian.yeo@uwa.edu.au

1385
1386    Journal of Management / September 2013

Keywords: self-efficacy; performance; resource allocation theory; multi-level analysis;

within-person processes

This paper is a response to Bandura’s (2012) Guest Editorial, which defends the func-
tional properties of self-efficacy by criticizing published studies that have demonstrated a
negative relationship between self-efficacy and performance at the within-person level of
analysis. Other responses have addressed inconsistencies in Bandura’s arguments
(Vancouver, 2012), his misconstrual of trait constructs (Jackson, Hill, & Roberts, 2012),
and development of an opponent process model to explain self-efficacy findings (Bledow,
in press). We focus more narrowly on the criticisms that Bandura has made in relation to
our (Yeo & Neal) 2006 piece that examined the dynamic relationship between self-efficacy
and performance across levels of analysis and specificity. Bandura’s central criticisms
regarding this study relate to our theoretical framework. He also accused us of selective
reporting of results and presented some other comparatively minor criticisms. The aims of
this paper are to address Bandura’s theoretical and methodological criticisms of our work.
The notion of self-efficacy as a dynamic, within-person construct is central to our argu-
ments. Therefore, we begin with a discussion of issues relating to levels of analysis within
the context of social cognitive theory. We then demonstrate how the concept of resource
allocation can explain the co-existence of positive and negative dynamic self-efficacy effects
across the between- and within-person levels of analysis and respond to Bandura’s (2012)
remaining criticisms regarding analysis, design, and measurement.

Social Cognitive Theory and Levels of Analysis

Social cognitive theory has been, and will continue to be, influential in the field of manage-
ment and related disciplines. It is widely accepted that self-efficacy plays a critical role in self-
regulation (e.g., Schmidt, Beck, & Gillespie, 2013; Sitzmann & Ely, 2011). There is
overwhelming evidence, from both correlational and experimental studies, showing that highly
efficacious individuals tend to set more challenging goals (e.g., Robbins, Lauver, Lee, Davis,
Langley, & Carlstrom, 2004; Sitzmann & Ely, 2011), strive harder (e.g., Colquitt, LePine, & Noe,
2000; Sitzmann & Ely, 2011), persist for longer (e.g., Multon, Brown, & Lent, 1991), feel better
(e.g., Judge & Bono, 2001; Sitzmann & Ely, 2011), and achieve better results than their counter-
parts (Moritz, Fleltz, Fahrbach, & Mack, 2000; Multon et al., 1991; Sadri & Robertson, 1993;
Stajkovic & Luthans, 1998). However, these meta-analyses, as well as the majority of primary
studies included in them, were conducted at the between-person level of analysis, which does not
provide a complete picture of self-efficacy’s role in self-regulation. Lord, Diefendorff, Schmidt,
and Hall (2010), for example, observe that although “between-person research consistently
shows positive associations between self-efficacy and performance . . . within-person research
finds self-efficacy can be negatively associated with subsequent performance” (pp. 544-545) and
argue that between-person research “may do little to inform our understanding of within-person
self-regulatory processes” (p. 545).
 Yeo, Neal / Revisiting Self-Efficacy    1387

The problem that Lord et al. (2010) referred to is known as the “ecological fallacy”
(Chen, Bliese, & Mathieu, 2005; Cooper & Patall, 2009; Robinson, 1950)—it involves
equating findings that are based on aggregated data to findings based on disaggregated data
that ignore group membership. Robinson’s (1950) seminal work demonstrated that literacy
rates were higher in U.S. states with a greater percentage of foreign-born individuals (r =
.62) but that literacy was negatively correlated with foreign birth when the data were exam-
ined at the individual level (r = –.12). This example of the ecological fallacy involves indi-
viduals nested within groups; however, the ecological fallacy also applies to situations in
which repeated measurements are nested within individuals (i.e., the individual is the
“group”). For example, individuals who exercise frequently tend to have lower blood pres-
sure than those who exercise less frequently; yet for any given individual, an increase in
exercise can increase blood pressure.1 As these examples show, it is essential to design and
analyze effects at the level at which they are expected to operate.
Social cognitive theory describes a set of processes that operate at the within-person level
of analysis. Self-efficacy is defined as an individual’s belief regarding his or her capability
to succeed and attain a given level of performance (Bandura, 1977). Social cognitive theory
identifies two mechanisms by which this belief influences motivation. Bandura (1977, 1997)
terms these mechanisms “discrepancy production” and “discrepancy reduction.” The argu-
ment is that high self-efficacy causes people to set more challenging goals, thereby creating
a discrepancy between the current and desired state. The person then acts to reduce this
discrepancy by applying more effort and using more effective strategies. These are dynamic
processes that unfold within individuals, over time, and should thus be observed and ana-
lyzed at the within-person level.
Although Bandura (2012) identified a number of requirements for the test of social cogni-
tive theory, he omitted one important condition, namely, that any empirical test of a theory
must be conducted at the appropriate level of analysis. A problem with empirical tests of
social cognitive theory is that, until recently (e.g., Vancouver, Thompson, & Williams,
2001), most studies analyzed effects at the between-person level rather than the within-
person level. The issue of levels of analysis is central to the debate over the functional
properties of self-efficacy, because mis-specification of levels may produce spurious results
(Sitzmann & Yeo, in press). Aggregating within-person variance to the between-person level
can mask the true direction and/or magnitude of effects at the within-person level.
Aggregation is particularly problematic for situations in which a given construct (such as
self-efficacy) could have opposing effects across levels of analysis. Analyses conducted at
the between-person level are useful for addressing research questions that relate to static
differences between individuals. For example, such analyses were appropriate for Bandura’s
early work that examined whether individuals with higher self-efficacy were more likely to
overcome phobias than those with lower self-efficacy (e.g., Bandura & Adams, 1977;
Bandura, Reese, & Adams, 1982). However, between-person analyses in isolation cannot
assess how changes in self-efficacy within an individual relate to subsequent changes in
performance. In the next section, we demonstrate how the concept of resource allocation can
explain the co-existence of positive and negative dynamic self-efficacy effects across the
between- and within-person levels of analysis.
1388    Journal of Management / September 2013

Resource Allocation Theory and the Direction of Dynamic

Self-Efficacy Effects

Bandura accused us of piecemeal theorizing. Needless to say, we disagree. We used a single

mechanism—cognitive resources—to generate predictions regarding the way in which the rela-
tionships among self-efficacy (both general and task specific) and performance may change
throughout skill acquisition. There is a long history in psychology of using the hypothetical
concept of cognitive resources (Humphreys & Revelle, 1984; Kahneman, 1973) as an explana-
tory mechanism. The concept of cognitive resources is useful, because it provides a means of
explaining complex phenomena that would otherwise be difficult to account for. Examples
include the effects of dual-task interference, arousal, fatigue, ability, and motivation on perfor-
mance (Hockey, 1997; Humphreys & Revelle, 1984; Kanfer & Ackerman, 1989; Navon &
Gopher, 1979; Yeo & Neal, 2004).
In the current context, the concept of cognitive resources provides a means of understand-
ing the effects of self-efficacy on performance in a dynamic context—that is, in which both
constructs change over time and thus vary within, as well as between, individuals. Changes
in resource demands over time can be used to explain how the effects of self-efficacy at dif-
ferent levels of analysis may change throughout skill acquisition. Previous results regarding
the relationship between self-efficacy and performance over time have been mixed—the
relationship strengthened in some studies yet weakened or remained stable in other studies
(Lee & Klein, 2002; Mitchell, Hopper, Daniels, George-Falvy, & James, 1994; Vancouver et
al., 2001). Resource allocation theory (Kahneman, 1973; Kanfer & Ackerman, 1989; Yeo &
Neal, 2004) provides a principled basis for reasoning about these effects. The core elements
of this approach are explained below.
Following Kanfer and Ackerman (1989), we assume that individuals have a limited pool
(or availability) of cognitive resources, which can be allocated to on-task, off-task, and self-
regulatory activities. Resource availability is expected to differ across individuals, primarily
as a function of cognitive ability. The greater the pool of cognitive resources, the more
capacity an individual has for setting higher goals, persisting for longer, and using more
effective strategies than his or her counterparts. Resource allocation is expected to vary over
time, due to dynamic contextual factors, such as task demands and task engagement. The
allocation of these limited resources is governed by a compensatory mechanism such that
resources are allocated according to need (Hockey, 1997; Vancouver, 2005). For example,
when task demands are low, an individual will devote relatively few resources to the task.
As task demands increase, the individual will increase his or her allocation of resources to
the task, until he or she reaches the point of maximum motivational potential, which is the
maximum amount of effort that the individual is prepared to allocate to the task (Brehm &
Self, 1989; Hockey, 1997). At this point, the person may change his or her strategy, lower
his or her goal, or withdraw from the task.
Turning to the effects of self-efficacy, prior research suggests that people who are highly
efficacious tend to have higher ability, use more effective strategies, set more difficult goals,
and persist for longer than people who are not efficacious (Chen, Gully, & Eden, 2004;
Kanfer & Heggestad, 1997).2 If so, then people with high self-efficacy should, on average,
allocate more resources to the focal task, and use those resources more effectively, than
people with low self-efficacy. As a result, people with high self-efficacy should learn faster,
 Yeo, Neal / Revisiting Self-Efficacy    1389

and reach their performance asymptote earlier, than people with low self-efficacy. These
processes should produce a positive main effect of self-efficacy on performance at the
between-person level that initially strengthens over time as the performance trajectories
diverge and then weakens as the performance trajectories converge (after individuals with
high self-efficacy reach their asymptote).
At the within-person level, this account suggests that fluctuations in self-efficacy during
a performance episode should be negatively associated with the dynamic allocation of
resources. Efficacy judgments are a source of information indicating what proportion of
resources are needed to meet task requirements—a decrease in self-efficacy signals the need
for more resources to compensate for higher task demands (Vancouver, Weinhardt, &
Schmidt, 2010). Consequently, self-efficacy should be negatively associated with perfor-
mance at the within-person level. Note that although self-efficacy and performance trajecto-
ries are expected to be positive overall (as described above), dynamic contextual factors
(e.g., task demands, task engagement) should produce within-person deviations around these
trajectories (see also Sitzmann & Yeo, in press, for a description of this phenomenon). For
example, when task demands reduce from one trial to the next, an individual’s self-efficacy
should increase. This change in self-efficacy should prompt a reduced allocation of cognitive
resources and subsequent decrease in performance. When task demands increase from one
trial to the next, an individual’s self-efficacy should decrease. This change in self-efficacy
should prompt an increased allocation of cognitive resources and subsequent improvement
in performance.
Our results (Yeo & Neal, 2006) are consistent with this theoretical account. Task-specific
self-efficacy was negatively related to performance at the within-person level, whereas gen-
eral self-efficacy and average task-specific self-efficacy were positively related to perfor-
mance at the between-person level. Furthermore, the average level of task-specific
self-efficacy reported by participants during the experiment predicted the shape of the per-
formance trajectory. This interaction is particularly noteworthy—as shown in Figure 1, the
performance trajectories of individuals with high self-efficacy diverged from those with low
self-efficacy early in practice but then converged again toward the end as individuals with
high self-efficacy reached their performance asymptote. This finding is consistent with our
theoretical framework and shows why it is important to consider the dynamics of the under-
lying process when reasoning about the effects of self-efficacy.
Bandura (2012) questioned how it is possible for general self-efficacy and task-specific
self-efficacy to work in opposing directions. We are puzzled by this reaction because the
notion of opposing self-efficacy effects is consistent with social cognitive theory. As
explained above, the role of discrepancy production processes in generating positive self-
efficacy effects is central to social cognitive theory (Bandura, 1977). In parallel, social
cognitive theory also recognizes the role of discrepancy reduction processes and acknowl-
edges that self-efficacy effects may be negative when such processes are active (e.g.,
Bandura & Locke, 2003).
It is important to note that there are boundary conditions relating to the effects described
above. The theoretical explanation that we have presented assumes that people act to con-
serve resources. This mechanism is important in situations in which people have competing
demands and limited resources, but it is not universal. For example, many of the early
examinations of self-efficacy used tasks or settings in which people were asked to cope with
1390    Journal of Management / September 2013

Figure 1
Cross-Level Interaction Between Average Task-Specific Self-Efficacy and Practice

From “An Examination of The Dynamic Relationship Between Self-Efficacy and Performance Across Levels of Analysis
and Levels of Specificity,” by G. Yeo & A. Neal, 2006, Journal of Applied Psychology, 91(5), pp. 1088-1101. Copyright
2006 by the American Psychological Association. Reprinted with permission.

something aversive (e.g., submersing one’s arm in freezing cold water; Litt, 1988) or interact
with feared stimuli (e.g., snakes for people with a snake phobia; Bandura & Adams, 1977).
These tasks do not require people to make choices regarding the allocation of a limited pool
of resources. Thus, an increase in self-efficacy in these tasks is unlikely to signal that the
person can reduce the amount of effort that they are applying.
Sitzmann and Yeo’s (in press) within-person meta-analysis highlighted the importance of
boundary conditions. Their results showed a null relationship between self-efficacy and
performance after controlling for past performance and the linear trend. However, substan-
tial variability was unaccounted for by available moderators, so they urged researchers to
continue searching for moderators to understand when the effect may be positive or nega-
tive. Vancouver, Schmidt, and their colleagues (Beck & Schmidt, 2012; Schmidt & DeShon,
2009, 2010; Vancouver, More, & Yoder, 2008) are leading the field in this regard. To date,
the potential moderators assessed in these papers have been treated somewhat independently.
 Yeo, Neal / Revisiting Self-Efficacy    1391

However, an implicit theme underlying this work is that a negative self-efficacy effect is
expected when an increase in self-efficacy signals that resources are not required for success
and can thus be conserved (e.g., for people with high average self-efficacy, in easy tasks, and
following prior success or satisfactory goal progress); whereas a positive effect is expected
when an increase in self-efficacy signals that resources are likely to improve the chance of
success and thus be a worthwhile investment (e.g., for people with low average self-efficacy,
in difficult tasks, and following prior failure or unsatisfactory goal progress).
For example, Beck and Schmidt (2012) provided support for their argument that a
negative effect exists for people with high average self-efficacy (those whose judgments
of self-efficacy fluctuate around the high end of the continuum). The authors argued that
these individuals believe that the task can be completed easily, so a momentary increase
in self-efficacy for them indicates that resources can be diverted elsewhere. On the other
hand, Beck and Schmidt provided support for their argument that a positive effect exists
for people with low average self-efficacy. The authors argued that these individuals
believe that success is in doubt, such that a momentary increase in self-efficacy for them
should indicate that there may be a chance of success if resources are allocated to the
task. Interpreting these findings under our framework suggests that both individuals
with high and low average self-efficacy act to conserve resources but under different
conditions and in different ways. Those with high average self-efficacy act under the
premise that resources will not necessarily be required for success, so they will be
expended only when required; otherwise they will be conserved for another task. Those
with low average self-efficacy act under the premise that resources will be required for
success, so they will use them when they are likely to lead to success and otherwise
conserve them for another time during engagement of the current task.

Methodological Considerations

In addition to the criticisms addressed above relating to theory, Bandura (2012) also
criticized our (Yeo & Neal, 2006) work on a number of methodological grounds. We address
these comments below.

Criticisms Related to Analysis

Bandura’s criticism related to selective reporting of results is arguably the most damning.
He accused us of misleading readers as to what variables were included in our analyses,
claiming that affect was included but not reported. This claim is incorrect. Our analyses were
conducted exactly as reported in the paper (Yeo & Neal, 2006). Negative affect was meas-
ured for another purpose (to examine the relationships among Behavioral Inhibition System,
negative affect and performance over time; Koy & Yeo, 2008) but was not included in the
analyses reported in Yeo and Neal (2006).
Stajkovic and Bandura (2010) re-analyzed our data, running a series of hierarchical
linear models comprising various combinations of predictors. Bandura (2012) reported
that in “all of the performance prediction models, . . . self-efficacy was positively related
to subsequent performance” (pp. 32-33). He then stated that the “miniscule negative
1392    Journal of Management / September 2013

self-efficacy effect was obtained by measuring the effect of pretrial self-efficacy on

subsequent performance after controlling for future self-efficacies” (Bandura, 2012, p.
33). Putting aside the inherent contradiction between these claims (the self-efficacy
effect could not have been positive in all models if it was negative in at least one), it
appears that the difference between Stajkovic and Bandura’s (2010) results and ours is
that they did not control for average task-specific self-efficacy (referred to as “future
self-efficacies” by Bandura). When interested in the within-person relationship between
self-efficacy and performance, it is essential to control for the aggregate at Level 2 if the
Level 1 variable is grand-mean centered.3 If this control is not included, the estimate of
the within-person relationship will be biased because a grand-mean centered Level 1
variable includes both within- and between-person variance. Not surprisingly then,
when average task-specific self-efficacy is excluded from the analyses reported in Yeo
and Neal (2006), the within-person effect of task-specific self-efficacy switches from
negative (significant) to positive (non-significant). The negative effect of task-specific
self-efficacy remains significant when group-mean centering is used (with and without
controlling for the aggregate at Level 2). Also, the results found for these various com-
binations of analyses hold when negative affect is included as a control variable.

Criticisms Related to Design

Bandura (2012) argued that our design was flawed because we confounded “type of self-
efficacy (specific or general) with degree of performance aggregation (discrete or lumped
together” (p. 32). He challenged the conclusion we drew regarding the positive effect of
general self-efficacy versus the negative effect of task-specific self-efficacy because we
allegedly examined a different form of performance for each construct. That is, he stated that
we tested the effect of general self-efficacy and aggregated task-specific self-efficacy on
“aggregated performance” and the effect of task-specific self-efficacy on “discrete perfor-
mance,” but the conclusion we drew necessitated a comparison between general self-effi-
cacy and “discrete performance” (p. 32). These comments reflect a misunderstanding of
multi-level analysis. General self-efficacy varies only between individuals, so it can predict
only between-person variance in performance. Multilevel modeling is appropriate because it
can examine task-specific self-efficacy as a predictor of within-person variance in perfor-
mance, while simultaneously examining general self-efficacy as a predictor of between-
person variance in the performance intercepts (i.e., individuals’ average levels of performance)
and slopes (i.e., individuals’ performance trajectories).
Bandura (2012) also criticized the absence of goals in our model. He argued that “one
cannot test Perceptual Control Theory without a goal comparator. . . . Without it, there is no
discrepancy for self-efficacy to affect, thereby stripping the feedback loop of its essential
error correction function” (Bandura, 2012, p. 31). We did not aim to test perceptual control
theory but, rather, aimed to examine relationships among self-efficacy and performance
across levels of analysis and specificity. The experimental design that we used was appropri-
ate, given the question that we were addressing.
 Yeo, Neal / Revisiting Self-Efficacy    1393

Criticisms Related to Measurement

Bandura (2012) criticized both of our (Yeo & Neal, 2006) self-efficacy measures. First,
he argued that the general self-efficacy measure should be an aggregate of self-efficacy
measurements across different task contexts. There is debate regarding the best way to meas-
ure stable individual differences in self-efficacy (e.g., Jackson et al., 2012); however, evi-
dence suggests that such differences do exist. Given the demonstrated validity of Chen et al.’s
(2004) General Self-Efficacy (GSE) measure, we believe that it is reasonable to assume that
stable differences in self-efficacy will be captured, at least in part, by the GSE measure. It
is possible that using Bandura’s approach would have led to stronger GSE effects in our
data; however, doing so would not have changed the interpretation of our findings as a
whole.
Second, he argued that our task-specific self-efficacy measure did not include enough
performance levels (i.e., the number of items that are used to create the composite self-
efficacy score) and consequently the relationships involving this measure would be dis-
torted. Prior to each trial, we asked participants to rate their self-efficacy for an easy,
moderate, and difficult level of performance and took the average of these ratings as the
self-efficacy score for that trial. Strangely, the work that Bandura cited to back up his argu-
ment (Pajares, Hartley, & Valiante, 2001; Streiner & Norman, 1989) related to the number
and type of response options rather than the number of items that are used to calculate the
composite scale score. For example, Pajares et al. (2001) concluded that the predictive valid-
ity of a 0-to-100 scale is stronger than a 6-point Likert scale. The three items in our self-
efficacy scale are each rated on a 0-to-10 scale. Despite this mismatch between argument
and evidence, the fact that our measure predicted performance shows that the three items we
used were sufficient for predictive validity. It is possible that a measure based on a greater
number of items would strengthen our effects. However, this is unlikely given that three
items are sufficient to obtain internal consistency and item homogeneity (Hinkin, 1998).
More importantly, Bandura’s argument gives us no reason to expect that doing so would
produce a change in direction from negative to positive. Further, we are not aware of
research that suggests that three items in particular is insufficient for detecting relationships
or that four, in comparison, is sufficient (Bandura was positive about Seo & Ilies’ [2009]
work, and their self-efficacy measure is based on four items).

Conclusion

In conclusion, we are puzzled by Bandura’s reaction to our results, given that social cog-
nitive theory allows for the possibility of negative effects of self-efficacy at the within-
person level. It is hard to escape the conclusion that Bandura is being selective in his
critique, seeking to criticize studies that demonstrate a negative within-person self-efficacy
effect, without applying the same standards to within-person studies that demonstrate a
positive effect of self-efficacy. For example, Bandura (2012) criticized our 2006 paper yet
cited one of our unpublished conference papers (Neal & Yeo, 2003) as one of a number of
“well-designed studies of the role of self-efficacy in within person change [that] verify its
1394    Journal of Management / September 2013

positive function” (p. 18). This paper was cited because it demonstrated that the relationship
between self-efficacy and performance became positive when participants were provided
with unambiguous feedback. We did attempt to publish this work; however, the paper was
rejected for publication because the manipulation of task ambiguity was confounded. It
seems ironic that work that has not passed the test of peer review is viewed more favorably
than work that has.
It is important to note that we are not claiming that the negative effect of self-efficacy at the
within-person level is universal (it is not), and we are not advocating social policies that under-
mine self-efficacy. Like others (e.g., Beck & Schmidt, 2012; Schmidt & DeShon, 2009; Seo &
Ilies, 2009; Vancouver & Kendall, 2006), we are trying to identify boundary conditions that
influence the direction and magnitude of self-efficacy effects on motivation and performance and
to understand the mechanisms that underlie these dynamic processes. Over the last decade,
researchers have made great strides in understanding this complex and dynamic process (Schmidt
et al., 2013; Sitzmann & Yeo, in press). We have no doubt that our collective understanding of
this process will continue to improve over the next decade and beyond, provided we continue to
apply the resources that are required to achieve this goal.

Notes

1. We thank an anonymous reviewer for sharing this example with us.

2. This research refers to situations in general, such that those with high ability tend to have higher self-efficacy
across contexts than their counterparts, presumably because repeated experiences of success foster the development
of self-efficacy (Sitzmann & Yeo, in press; Vancouver, 2005). Within contexts, however, research suggests that the
poorest performers (or the least skilled) overestimate their abilities, whereas the top performers underestimate their
abilities (Dunning, Johnson, Ehrlinger, & Kruger, 2003; Ehrlinger, Johnson, Banner, Dunning, & Kruger, 2008;
Kruger & Dunning, 1999). If self-estimates of ability are viewed synonymously with efficacy judgments, the posi-
tive between-person relationship between self-efficacy and performance may be attenuated in such situations. The
relationship is unlikely to switch to negative, because the top performers in these studies still had higher estimates
of abilities than the poor performers.
3. An alternative method for estimating the within-person relationship in an unbiased manner is to use group-
mean centering at Level 1 without the aggregate at Level 2 (however, see Hofmann & Gavin, 1998, for additional
benefits of controlling for the aggregate). Also note that multilevel-modeling results based on group- versus grand-
mean centered Level 1 variables are mathematically equivalent if the aggregate is included as a Level 2 variable
(Hofmann & Gavin, 1998). Yeo and Neal (2006) used grand-mean centering at Level 1 in order to avoid problems
estimating effect sizes associated with group-mean centering (Snijders & Bosker, 1994).

References

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Bandura, A., & Adams, N. 1977. Analysis of self-efficacy theory of behavioral change. Cogntiive Therapy and
Research, 1: 287-310.
Bandura, A., & Locke, E. A. 2003. Negative self-efficacy and goal effects revisited. Journal of Applied Psychology,
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