performance management

1. Management
PuttingResearch
intoAction
Performance
James
W. Smither
and
ManuelLondon,
Editors
lB*?*Lilf:l-

2. i oprrlr t 2004btrloFn s ld & bn,. Ini ll nBhnre'^^l
c{ eal0}l7al-}ar josb.s.otr'
No pan of dL publicrrio' mavbt r€Produ..d, r.r.d in a r€tic2l s
or bi .nv ntaq .l€.hni., ddhmnal, Photr.tDinS, r€.ordi4, (mn'ns or 'otRu €! 'pt r
pemnrd under :iedDn l0t or lo3 ol rh€ 1976unitd sb..5 c,Drighr A.r' {nhod €nh.r lhe Prior
nrntd p€rnision of $c pdblnh€. or Nrh.rtanon thrcush parm.nr or thc ,Pp'.Pn:F lrr{oP! I"
to d. cop.{ishr cl.d.e u.nr.
Itsi4C86O0, .r dn lne r|?b arr*:top)riShr .on R.qu.ns b .h. p{blnh.r lor P'mision should
b. rld( $*d b the Pemi$i..r DrFm€nc John $'Js." & 9'q Inc.. I I I Rnt sft( HotDL'n, NJ
07030,201 t43{{rr l. tu 201 t435x13. or onlin. araa !ir9.om/3o/p.mns'ons
R.rdeE lhould & trwr€ tbar Incmcr $lb jd ofi.rdl s .ihdons andlor btrt€s nr tu'de'
inromarion nar btrvt tbmg€d or diePp.r€d h.k.n ln. rin€ thi
Umn orl.i,biljry/Di$laim.r,fltdml)] rlniL rht pub|nh( r"n n'
in pr€panng thn bool. rh nDr. no r.?r.$nadoB orEfrrdrs "ith.€sPe( t b thc a"uraq
or :on,pl.renes or rh. ..nt .6 or $n lxx* md sF.iri.allr didrin any imPlitd N:.Rnries or
!'r(hmhbint or 6h.s ror a Pannuhr pupoc No {]lrfl! mar b. .tacd or ext.od'd ta sles
rep.eknhnrh .r rritkn sal€snarri2L Th. adi.c Md frt.*i6 onhin.d h.rein mr not h
;rhk iq r.r situanon YD should .onn . sid' r Proresionil *her. aPPrcPrift' N'ith'r ']t
publiitrr nor aurhor :hrll bt lj2bl€ ror mv l(K or prolit or rnr .tn.. .onnrr.ial dmas6. in'luding
bu, n.t linned ro sP(.iai, in.identl, .on?qtrmrirl, or oth.r dmag€!
Josey Bs b@Lr rd P.odR! a amilrbl. drousl mdr breldo6 ro .onhd JrM,FBas dir'dr
."rr .". C*--- c-. u.p".-.nt fithin th. U s 3ur9567719, oucid. rhc rr s' ar 3115?2'3s46
Jds,+Bas ale pubhb.! ic boors in r wtn or.l€.hmi. romaa s,nr cont€nr rha' rPpta6 'n
prinr mar nor bt aailable n cldronic booL!
UbEy or co.rt6 Cidro3i.Gi.nrbbddd De
P.domm.. nrn4.m.nt : p nns rer.b inror.rn n /Jm€s $l smitherrnd ou'l
p. .m -lTk proftstunal pa.nr€ sri6)
ISaN s7a{-17cl9r52rl (clorh)
l. cr.€.ddelopmcm. 2 linpr,,rt.noritidon I. snidtild6| ll. r'ndon.
Pdntedin d. UniFd sdt.s ol An€da
l 0 c 3 7 6 5 , 13 2 1

3. AN EXPANDED
VIEW
OFPERFORMANCE
MANAGEMENT'
Herman
Aguinis
AnExpanded
Viewof Performance
Management
The purposr of this ch:rpreris ro pr1)irte.tn cJran.te.t!'c ot the
perlormancc nr:rD;rqcIlrenr
pfoccs that subsuDres
rhc lrldiri()nal
I/O pqcholog pcifonn:ur.c apprai! lilclature. Ii is ar)cxpiur.tcd
iiew in relarion ro dle traditioDalI/O ps.chol(,t^oeatrrlenrof
the topic irl fitc dillercnr avs. Fir.sr.
ir goesbcvorrrtan allrost
exclusiteemphasis,so re rLould 5a alnrost aD obressi.trr,on rhe
meaurenlcnt ol pcrfor.n arrce aDd in.Lrdcr a considcratii)n oi
what happens bt'fbre and iticr pertirn ance is nr(.asure.t (lhat
is, the role ol lirne an.l .i) tcxr). S(c(rrd. alth()ugh the I/a)
*Thisresearchas(oDdu.t.di.pr hit.tie,nruguirnl,et(trh.Nt..)r.rl{1,n,
Tem Profes$xhiu nr hnagrrnenr rh. t-!nertis o' (:olorarloI).n.f nrxl
visiling
appoinrne.tsat th. t lne.ih ol SihIrarxi (spanrrrnd lrDn.rih (n
PuenoPjco.lrharl(.barl.s1.lier(c.tan!ell_on{r.D.iDd.lnn'sDrirheri(,
.ommenb on preriou dlari!. Tl,;.brpro n(h(L.s rn oi.t f,on, .rr.l is trased
on llre tolloring boofr r$rlni. H l!(lr)!r) Pa/ontn,n,marq.nar! enn cn.).
Upp€r SaddleRtr.r. J: Ilrn,r P.en!.. tt.,ll
Add.e$.on.spond€rx. r.r Ilenu.ur flrinir. ]'lolc*, ,,f OrgrDtIi.,rrl
Behariorod Hunran Revntr..s atrd De.nr. R.a,&L Itotie,r lielle strir .l
&^inN, Indima tlnirer sn t.nrail: lknlnri@ indi.x,a.cd,,)
CHAPTER

4. 2 rtrrorurrceMrucrurxr
ps)cholosv
lirerature
reats
*:':l':
t,nHr*T'oPil:J ;::-#
#.:';:#*1T.,-fl
,l",tii:::.T,1;,{*."
*:;il*
nizational psycholog domains {cf Agun
*llfl*il:m::;x;;ig,r';]:nfl
,r;'#Tffii
5"".'"*11'flT;1',#i
jiT$il*si;;;andclonsidersthe
i::l:lll
ri"*"w'r
ffln:'ffi;ill:
ilixHt'
T"-l
u:1,:x:l,x:':r;xHi::'i::."-'on,informadons!
m:m:l*,*"::'[H
;i:fJ:il
ffi,ffi
:*ilil$
#'il*i*h*,Ti:.':^*fi
'ffi:T:;i'ff
I':irtr':
,n. .iJ"* ", *? **ncipractice gapin theareaof performance
manag€ment
TheScience-Practice
Divideand
PerformanceManagement
IH:"',,j*1:nffi:#x, ETff"
research
conducted
bv
^J"J""J1izoro,,*"-'*.11gT,ilit{
*hxih
-iltut#*$igi';i*
[.l:,'.'ilffi,ff]ff.illil'lT'l?*;' . Br"""r'
2002:
R'ne'
L:f;
i: ; ffi;.
-;t
7) Mu(hinskY
.(2004
) notli,$i,l;JJll;;
lXf
'H::'fr
::::J,Tfili#;,-iill;;;;;r,",-'se"
*:*'**:'ru'+Y;".m"r*'H":'f:]:
"l;ffi*:iilf1:ST*s
kii*red,,B'
to"nea.other'
onemight
;:11'"*f
'l;::"T:":1T1$t$il:'1$:
lii:.3"J

5. 1 hp1.'r, D '1f (n prRron! ( I ttr 1Gr.rGr 3
implcfilenra(ion. Ihis ilcreasing scicnce,pmcriceschisDris parrjc
ularh puzlling in rhe cascof t/O pschol:rg hcause rhe fit ld Nas
crcated iurd secrnsro bc predicated lilndajncr)raliv on rhe prin
crplcsol the scientist-pra.riti.nrer
Dvfiel (Rass tq74: nrnrkffe.
1990:lclIenl. 2007:lrrryh & Sarl, t!)90;Rrrpp& Beal,2007).
Thc genefalscienccPracriccsap is particrrla.lcviden{in the
area ol peflinrnancc lnanagcnlenr.ptacorroltcrsare lntcresre.l
rn sc|eral issuesdiiccth rclated ft) perfirrar)(e ma|agenlenl,
including talenr nr:rnascrenr. lcadership de'elopn)eDr.
in(cn
sificaticrn
oi l)r'ka cnrploefs rn () incrcaseproductiit with
tewer rmploccs. ancl nranagingdrangc (Fa: 2006; Schr.amm,
2006;Schwiud. 2007). On rhe orhcr haDd. a reie{ b cas.i()
,r'r,lqrri'ri.,..iririx.U
.lr.r1l rlr,,rr1,,.
t;e rrr,,,r
p,,prrt.ir
r,,p,i,.
published in ttie Joutut of ttppti{t ps.ttdos,i (J,p) fi c,Il) 2i)03
lo 2007 :rrc (t ) job s:lrifirtn)D,atritu.tes./inoh.emcDt/conrnril
trert: (2) rvofl eroups/reams:(3) pertbr.rnance
appraisa]/fced,
back;(.1)ofganirari(,nalculrrrr.cs.
clinr:rrcs.
policics,cirizcDs)rip;
and (5) beha'x)r,p.cdicrion ot pr.occsses.
and out.o )cs.Th^r
samerelicl linrnd drar (he fie nro5tpoputar n)pi(s publish(.d
i Per.a,d Pst.holagi(PP!ch) also bencor 2003 ar)d 2007 rre
(l) behavior'.
prcclictionof proccsres
and olrtconrcs:(2) perfor
mance rplrraisal,/fcedblckr (:l) p5chomcrric,/resling issuesi (1)
testvalidit'/?lidatiur issue;and (5) for( groups,/teams (Ctascio
& Aguilis, 2008a).
Three conclusionscrn bc drarrn from rhis i))t(r.ma(ic,n.
Firsr.
gircn that Clas.io arrrl Agrrinis (2008a) corlcd rhe articles pLrl>
lished in JAP and PPsch using fifr dilltreDt carcBories,rhc con_
gruencc ben{ccrr the li!c, lisls of rhe rop 6e I)ost popular (L,pics
is remarkablc and sLLgeests
rhat thesc publicarioD rrencls are
soundindicarorsol cornnmn, unrlerhing o.endsin rhe rcsearch
produced in the field ol I,/O ps'.holos: Secrnrd,a ..rnllarison
of rhe topics in which practiriurer.s are inrcr.cstert.irh those in
which academics are intcresred rlro{s rangenrial orer)ap onlr:
r!'hilethe k)pic peflbfmalce applaisal,/fccdba.k.'s iDclu.ted on
tlte lists fi)r borh joufnals. the majoril of articles addressropics
that arr nor suflicienrh broad lo address pracrili.)r)u con.cnls
abotr talent nlanaflementand lcadershipderelt4rrncnt,to mcn
tronJustrrr().
The rhird conclusio| is rharpracririoDcrs
inrercsrcd
in implemcnting sourrrlr.est'alchbascdpertin-manceman;rqcrnenr

6. 4 ruronNscr {errcwnm
tT:ffi;TJ'.1#"*:;Hil1.::"#':"Lil
[H,T:-
iJ.?
";.
;;:i;;i;J;d berween
practitionirintelesbandpubrica-
il^ trla. i" t/o Psvchologv'
rhereisa needto gobeyond
HRM
;;*l.""'#Tin:ff
:i'f#3,T'i.,:i"illlin"o^
a.in." p..fo.-utt.. management and describes six kev Pur-
li:ffi"*l'r:*.d*".-;ryT#.
*::,::l *ll ;:",ii.11;'il'i,"liji'li; each
o'iieiss'es
dis
iussedin thischapter,s€eAguinis(2009)'
what lsPerformance
Management?
Considerthe followingsituation(Aguinis'2009'p 2):
;::t';;:'ii':fi
i::#i::f
'.i:',ffi'trff
'-:l''iJ:#'
lit"^.""^. i*t.' iJ"ains reviewingthebudsetsheislik€lvto be
:l'i'"'::::n'm*:u.-"mffru1'#f
*:*:::l"Ly-*mxi;5;;i
;[7,'flffi
:::'
.*"
;*::';::u""1'l'E:"m[]H
f:F::
ift''*
;:mrum;m;:,;;"lliii
ffii'i'""-|
il
"''::.
**:{';j"um*r,i591il:;:"H:*;1T
,i. ir-.. ,cJG', "h.Lo*" "b'* tt''i'"Pe'f**' b..b&'
sales
6sures,whichdePendmoreon I
*;m::;)#n";:;**6#ift
*:::n.
of rewards,regardlessof her raungs'
"*-ftttr"",l"a *ftty adjustmen6 are bas€don s€niority rather
hlt,ll;:**p"::tT"f
i:''',#lf;
.;,[T!5*".:.
';il'"TTl"Tll"sfi
#iL'?:T:;"i"'Ti.;'1iil"
ffi;il.;;;;;;; ;e wn nothave
; dear
withcomPrajnrs

7. s E r r r r ! ) ' , l s , t r P ! r + o R M 1 N ( : ,
1 A 1 ( r r r l
or lolknv{rp meerings.
Salh lllls ou1rhelirrns i,r lrsslhaDnfenl
nunutes
andselsbackro bef icalt()b."
,ts is ilhrsrnred b this lii{ncltc. lhich des.ribcs a sirrrrlil,l
that i painfulh t:nliliar r() DraD.eadetJ.p.rtbrDlnn(c rrrr!rag.
ment svtemsafe ('f(c Lrnder-ulili/cd
arrd also|risusrd. ID la.l,
rn man organizarIon,
poorh iDrplcnrcnred
perlbr.niu)ce
man;Hc-
ment svstems
can do rnore hrrm tl)ar)good, asrfasdenxDslr.utr'(l
bv a legalcasc in the consrrrcrirm indust. (I'fl (ir.p().xrior).
2000).A {inrale empbcc rasprom()lcd cleral rim(s an(l sllc,
ceededuntil shesraf{cdorkine Indcr the supeNis;(,Iofa Der
managcr She latcd iI her lasuiltl)at.oD.e shc $as lrrom(,lcd
and reportedlo thc nerr m:rnt{er. thal boss;gnoredher.and dnl
not gne her rhc anreslrppoi (,) oppornrnilicsfor rrainine (hirr
her malecolleacucs
receired.lfrer eighr nrontl)sol re.eiin!.ll(t
teedback
Irom hcr rnanaecr.
lihr rtasc:rllcdiDto Ii olti.c. rlhcre
the mlna{cr told her rhat she Nasfhilins. resnltinc iD a demo,
tion and a $20.{XX}
rc(lucri(xrin hcr irDrualsalan.'lren sheron
hrr.e{lirirninrr',,n Inr'ir.,,i,,' ,sarrie,tlr,irqt .l r,,i i,,,,i,l
emotionaldislrcsand e.on.nnic darnaee.
In addition tc,an in.rc:bcd isk ol li(i!.arior. rhefe al.c crral
other detrinrcntalortco nrcsof poor]r irnplcrmcn
re.l s.sl
cnrs.; )clLrrl,
ing ernploec burnour an(l -iob dissalisfirctic,n.
damaecd rclatx)n-
ships,and i cre:rs€drunrcer (Rrofn &-llenson, 2005; (;abris &
Ihrke.2001). In addirion, rhere is ir large oppor.tDit cosrbe.arsc
poorly rmplemented slstemsrrasrc rirne and rcources. iD.lldiDs
Befole dcsigning a pcrfonnan.e nraDagemeDl
slcllr. tlrere
needsto be a clear definiriotl ol perlirr.rrance nritDr(crJl(.nt.per,
formancemanagenrenris a coDtirLrousprocessoI identilring,
measurine.
and dercloping dle pcrforrnaD.eof iDdiidnals:urd
teamsand alignin{ perfirrrnancc 1ith rhe slrarcgic goals ol lhe
organization (Aguinis.2009. p. 3). Nolc rhar the ker.c{rnrlnF
nentsof $is definition arc rhar rhis is a conriDuo s pt1xes:rDd
that there is an alignirc t r'irhsl.a(egicgoals.U a 'ltanager.
I;lls
out a lbnn once a ciu becauselhis is a reqnircilent ol the "HR
cops,"thcn this is ccnainlL nor a c.rntir)Lronspr.occss.
Also, er:rhr-
ating emploee pcrformrn.e (lhat is, perfb.nrar)ce appmisal)
withoutclearconsilerationsof the exren(ro rr.trich
an indiridual

8. 6 rtrrorurce Mrucrvrxr
is contnbuting to unit and
about how Performancewill
consistent
with thisdefinition
organizadonalPerformance and
improle in the future ls also not
of performancemanagement
Why lmplementa Performance
ManagementSystem?
Performancemanagements)stemscan
poses((t. Cleveland& MurPhy' 1989)
summar)).
s€ne six imPofiant Pur-
(s€e Exhibit l.l tbr a
Sn**,r r, ttrr* *. organization's goalswith individual goals'
h"i..rt" i.i"i"..i"! behatior" consisrtnt with the atainment
Exhibit 1.1 Summaryof Six Purpos€sof a Performanc€
MaDageme SFtem'
ongoing basis.
o,goni-ai*t,*tntn*ng'
ltv"l9:t"bj11,":11Y."*'.li:
;;ffi1#ffi;J'Jpo*n'."l -a u"i
gn.":l
1'::::l
:il:;i'"fid;i; il trsed
inworkroice
pranl:13^-1"-"
of organizational
goals'
Adninisriattue|r isa sturce ofralid and useful infornation for
makinederisionsaboulemPlovees'
includingsalarv
adjusl-
*.t"lp-.",t""t. ttPlovee retenuonor lerminatron
..."*i i"" "f ."p*.iperformance' identificauon of poor
oerf6rmers, layoffs' and merit increases'
Cnmmun/.al')n:
lt allows
employees
to be informed aboulhow
"""*"ji
,it.'"-. a"t.'g' ro 'eceiu' i"fo'murion on specilic
"."".in^, -"y ".Ja lmprovement' and to learn about ttre
l.n"nirurto,t t unOtftesupervisor's
exPecudlionsand
whal.
".i"." "f*"* tftr.*Peftiv:lr brlietesaremostimPortanl
Deltel(hntntat:lt nclrdesfeedback' which allowsmanagersto
"""'JJ
"-or"v.o u"d help them imProvePerformanceon an
lin*mT:mm:"*llxTiH:H
i***:*,*[:ru;:r:n[r.r#i";$
in a training Progmm)'

9. . EprDrD1r$ (tr PrR!oRrl(.I: lANr(,!^rl:Nl 7
Dorutnentatiott:
It |irl<ls data rhat can be used to asscss
dre
predictive accuracvof nerrh proposed scicctioll instrumenr-s
aswell asimportant admin'suaricdccisions.
This
inlormation can b(:cspccialh uselirl iD rhe cascof litigation.
L Sbakgi( lu4n e. R! linking the orgaDizarion'sg.rals$irb indi
idual goals. thc pcrfonnance managerrenr svstcnrrcinfrrrces
behaviors consistent with rhe arrainrnent of orgrnizational
goals. Nloreoier. een il fbr somc reason indiidual goals are
not achieed, linking indiidual goals Lith organi/arional
goals senes as a wa,to crJmnruni.ate $hat arc thc trrost cru,
cial brNincss strategic initiaties. ,{s ar) illustration of how
perlornra'r,
r rLrrraBemenr
can c11e
d rfdrr
qi, purpoc.r,,l
sider the cascof Seal.s
Holdings (lorporarion, rhe third largest
broadline retailer in thf tlritcd States($55 billnrn in annrral
reverrues,about 3,900 rctail stores in the Unite.l Slales and
Canada) and thr leading home appliance rcrailcr a]j $cll as
a leader irl tools. la$Tl arrd garden producti. horne electron,
ics. and automotile repair and nrainrcr)aice (Belner. 2(X)5).
Following the melger ol Kmart Corp. and Sears.Roebuck &
Comparrr: Avlwil B. l.c$is nas pronrotcd to chiet execntie
and tzLsked
with a stratcgic culture change iniriatie in hopes
of reinr,igorating the struggling retail companr A srratcgic
objectie is to move liom an inrrard fo.us to a crrstoner ser
tice approach. A second kc obj(tie is to bring about an
entrepreneutial spirit rvherebr store managersstlie lbr linarr-
cial literacl and are challeDged t() identili opportunities lb.
greater profits. Sclcral aspectsof the perlormance manage-
ment svstcrnare norv being used ro achirre thcsc stlatceic
objcctives.For eremple, emploee dutics and c'bjectiles are
being rerised so drat emplotccs will spend lesstime in back
rooms and more tin)e interacting $ith customers to lacili-
tate pu.chascs and undersLrnd customer needs. In addition,
leadership conlmunicati()n r!ith emploees and facc-ro-facc
intrraction are being encouraged. l-e$'s sp.nds rhrcc davspcr
neek in storeswith emplolees and frequcnth quizzesrrarag
ers on their knoi!'lfdge, such as asking about pro6t maryins
for a gien department. The greatest compliment emplovees

10. 8 PrRroRM^Ncl:MsNActnNr
receive is to be referred to as
"commercial" or someone who
i*"',*y;'m:llrl.i",i'"Jllf
;tl'Til.'1!r*'lili
*l.mll*ll,S::
j:l..fjil:;.::::""".i;fi
T::.i:li
r,ffi;nn;j;:::TiT:#1,':Ti:#::i
..,*,,r'"
p".ro.-."..
-{'g'T'"1
ii]il'ili$il'#f.J
i.'.T:'fl
i'[l'.:.:llli'"i'*Toli;* *'ariorr
as
rriricar
to
,t..o.prnr'. "t'ttttt in lhe martelPlace'
"llru*lg'rur:J;JillilHT.Tir-.ff;:
i
u".'a.i.,"".-ail"t tmPlo.vees Su'h administrative decisions
:**ru:m*v::["J:"."ilil'.:fi
:ffi
*:1.'":
*;**:tL::r::fi
i:HI"J;:TTlsi'rs.T
lli*'"'n:m'ru:*lx"*'rT:ff
::i'Til::;ili
i"" i"." "", tt^'e a good Performance management sfsrcm
ilpr...'J-'""'*i*:11':..':TJfi""*'J;:"i.:
ilJ":ffilX-ff;:!::'el"oi";;;;."hr'1vre'Ieuntror
,i"'i-f
i.,'i'",:.r""
"i-"--:":tfr
.1;:Iiii:::^t;;li:i
ffiffi:rfu;*"S"x$T*i
*n:';g:m'l'1."3:il;ffi
ffi::JJ"*':i:ffi:
*l*l*i;'f,n"n:$H;'rn:t"Jx*ilJ
in:rix"m';':;i,ll
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i*:
il*ni*'ffl,Ji;;:ro1.{x:,9;n
n'.*runl*tlY,lHlil;;lo.H;;;;o;;
o"**
.'o.'
formance management sisrcms'

11. I
A EpaNDrD VrEs oF l'ERlotrM^Ncr trN^cr:MrNt y
3. Communicalionputpore A performance management s)stem can
be an excellent communication device. EmDlolees are informed
dbour hun well ther are doing and r.,.ile inlormarion on
specific areas that mar need to be improled. Also, related to
the strategic purpose described abor€, per{brmance manage-
m€nt s)'stems
are a conduit to communicate the organization's
and the supenisor's expectationsand $har aspectsofivork the
supenisor believesare most imporranl
4. Deo?lofupntallru4x$e. Feedback is an imporranr component ot a
well-implemented performzrnce m:rnagement sstem. Managers
can u-s€ feedback to coach employees and improe perfor-
mance on an ongoing basis.This feedback allows for the iden-
tificaiion of strengths and weaknessesas well as the causesfor
p€rformance deficiencies (which could be due to ind idual,
group, or contextual fhctors)- Of course, feedback is useful
onlv to the extent that remedial action is taken and concrete
steps are implemented io remed), any de6ciencies (Aguinis &
Ikaiger 2009) . Another aspect of the developmental purpose is
that emplo,yees receive informadon abour themselves thar can
help them indilidualize their career paihs. Thus, the develop
mental purpose refers to both short-tcrm and long-term asp€cts
of development.
5. Oryaniultimnl nnint"nan? purpoc.An impor tanr componenl
of any workforce planning effort is the talent inlcnton, which
is information on current resources (lor example, skills,abili-
ties, promotional potential, and assignment hisrories of cur'
reni emplovees). Performance management s,vstems
a.rethe
primary means through which accurate talent iNentories can
be assembled. Other organizational maintenance purposes
served bv performance management systemsinclude ass€ss-
ing future training needs, eraluating performance achieve-
ments at the organizational level, and evaluating rhe
effectilcness of HRM intenenrions (for example, whether
employees p€rform at higher levels after participating in a
training progmm). h_oneof theseactivitiescan be conducted
effectivel)' in the absence of a good performance manage-
ment system.
6. Dorxtnenlatiar Pu4nse. Performance data can be used ro assess
the predictile accurac! of newlv proposed selecrion instruments

12. 10 Pruonurce Msrcev*.'r
lcis{io & Asuinis,2008b) For examPle a newlvdereloped tesl
"i*."-o",.i fi,.*.y ."n br adminisered !o all adminisratre
o..*"Ji.f. S.".." "n the tesl 'an dlen be pairrd wi r srores
collected through the p€rformance management ststem rl
scores on the teit and on the Performance measure are corre-
i"iJ, ,rt.t tre test can be us€d with future aPplicants for the
administratr€ positions Second, Perfornance management
*.L-. "1"* f,i. m aocumenation of imporhnt adminisua_
i'"-i*iJ""l rrli" i"formation can be esPecialty useful in the
caseof litiFauon.
As ,roied earlie.' many Performance management s'srcms
are under-utilized and' hence' do not sen€ all ol these slx
;;;;;;. F";.,."-Ple resuls or a sunev o[ industrial and
orqanirational Psychologisls working in human resourcrs
a..rurt-.nt" in more than one hundred diflerent organt-
zations indicated that the two most frequent purposes
-are
aJministrative (salaiy decisions) and developmental (to iden-
tifi €mplovees' weakness€s and strengths) (Cleveland &
vil.prtyl rsssr' rhere is muchro gainil organizarions
are
able lo usr their perlormance mana8emenl svslemslor all
six ourooses- This would have an important imPact on orga-
,rirjtio.t" u. well as possibly entire countr:ies' grven the per-
vasiveness of Performance management systems worldwide
For example, a recent suwey or almost l'000 HRM profes
sionals reveated that 96 Percent of Australian comPanres cur_
rcnllv implemenl some rypr of Perlormance managrmenl
*.i.'" irl".l.^* & Compton, 2006) Similarly resuls ol
"."*.t a 278 organiations aboul iwcdlirds of which are
multinational corporations lrom Ffleen diJlerent countnes'
indicaredt}lat aboul 9l pertent ol olganizadonsimplem^ent
a lormal perlormance mani€emenl Vslem (Lasclo zuuo)
14".""*.,'".grft.Oons with-formal and ststematrc Perfor_
mance manaSement sl"slemsafe 5l pfrcenl mofe like lo
oerform bettir lhan the other olgani'/alions ln lrre sample
'reeardine
financialoulcomesand 4l percent mole llkell lo
De"rform-betlet than the olhel organizations in lhe
-sample
legard.ingother outcomes including customcr sallsla(lron'
..iolovei r.tention. and other imporonl metncs

13. t
I
. UprDr D -rrr o. l:RroRu() laNA(,firtsN r ll
N4aximizing
the Purposes
5erved
by Performance
lvlanagement:
|||ustration
There afe ntlnrefousc:llr)pl(s ()f r)rlairriTations
that irnple)nenI
perfofnra cc t"n?rgenrent svterns lhat allijrl thern to accorl
plish rhe mrLltiplcobjcctircr dcscriberiabore.(h,rrsiderthc casc
of SEt,ClOGedit Unnrn in Lugere. Oregon. a not-tir.proiit con
sumcr cooperative that Nas establisiredin 1936 (Fandl' 2{)01).
SELCO'seight bran.hes sene nearlr .ight lhonsand mcm-
bers. SEL(]() ollcrs man of thc san)c scr'iccs ollcrcd b othcr'
banks, inctLdine personal chcckiug and sarilgs accounts, loans,
and cfedit cards. Recentll SELCO scrapped an old pertonnance
appraisal svsternand replaced it rith a Derr nlrltipurpose and
Norc cffcctive perfomrance nanagemenl sslem.Firsl. the timing
ofthe ncw svstcnris nor aligned lith the busiDess
cvcle,insteadol
the empk)ee s d:rte o{ hire, (o eDsrue lhat busiress needs al.c
alignedwith individual coals.This alignnrcnt scr'csboth str'atcgjc
and infbrmational prLrpc,scs.
Second, rnanagersare gnen a pool
of moncy that the' caD$ork ith to arard bonuses and laises as
necded,rrhich is nore ellectie than rlre co'nple set ol matrices
that had been in place ft) calculatebonuses.This inrproved the i,rav
in rvhich the s'sten is used lor aliocadng re$ards an.l rherelbre
s€nes an adminisrrarive purposc. Third, rnaraecrs are rcquircd
to hae regular convc.sat;ons
$ith thcir cmplolces about their
per(brmancc and rlake ote of all problems that arise. lbis
gilcs the emplorees a clear sense ol areas in $hich the need
improvement and also pfoides documen6rion il disciplinaN
action is needed- This componcnt scrlcs both irfornrational and
documentation purposes. Finalh, thc linrc that rLa-s
prcvioLrslr
spent lilling out coorplicatcd matiices and forrrs is no$ spcDl
lalking rith thc cmplorecs about horl thel can improve their per
formance,allowing for progresson an ongoiDg basis.This sel1es
a developmenralpurpose.
Manl organizations mai halc a sG(allcd pcrforrrar)cc man-
agementsvstem,bur this ma! l)c a pcrfrJrmaDcc appraisal at bcsr
and an administrarir'c hurdle imposcd b thc HR departmcnt ar
$'orst.So it is not sufficiort to hac an Npe ofperfornrance nral
agementsvstcm,but one should hare one that serrcs as man' of

14. 12 Prrrorurrcrl-qucwtlr
the six purpos€s described above as possible The next section
addressesa'performance management process that allo$s orga-
nizations to maximize the benehts oftheir ststem'
As noted earliet t)erforrnance management is a conunuous process'
However, when i system is first implemented, the process follo s
rhe following stages(Aguinis, 20)9; Grote, 1996): (I ) pre-requisites'
(2) performince planning, (3) performance execution, (4) perfor-
-r,r.. """.o-.ni, (5) p€rformance reliew, and (6) Perfonnance
renewal and recond'f,cing. Each of these stages is descdbed next'
Th€ flow of the p€rformance management process ls deprcteo
graphicallyin Figure l.l.
Stage1:Prerequisites
There are two imPortant prerequisites. ihat are needed befbre
a Derforrnance managemenl syslem is implemen(ed: t l) knowl_
eiee ol the o.ganiru-tion. mission and slrategic goal' and {2'
knirwledge ol r}e job in question. lf there is a lacl of (larir)
resardin"s
whererhi organizalionwanGlo go or the Ield(ionshiP
tretween the orsanization . mission and strdlegiesand each of its
unit's mission ind strategiesis not clear, there will be a lack of
clariq regarding what each emplovee needs to do and achieve to
helo the ,rrganiralion get thcre. An org:rnization s mission and
straregi( go;ls are a resull ol strategrcplannin8' whirh allo$' an
organizatron to clearly define its pur?ose or reason ior exrsong'
.nh... it *uttt. to be in the future' the goals it wants to achieve'
and the strategiesit will use to attain thes€ goals Once the Soals
fbr the entire organization have been established' similar goals cas_
cade do$'n*ard, wi(h departments setting objectives to support
Performance
ManagementProcess
Figure l.l Flow of the Performance Manag€ment Process'

15. lpntl-rLs (tr PnRroRlj(.I:I{N( fMr:NT 1l
the c'rganiration s olerall mission and objectics. The cascading
continues downwatd until each ctnPloee has a sct of goals com
patible$ith thoscofhis or her unit and lhe organizatio
ls an cample, Exhibit 1.2 sho{s lrof the Ke Bank of Ltah
successfullrdcveloPed a Perfonlan.e managen)cnl stenr tha(
Exhibit 1.2 Cascading of Goals from the Organizationat to the
Deparhnental and Individual lrvel at Key Bank of Utah.
Organizational Level
. .Xlisliontut,,ttnt'fl].e mission ol dre corPoralior is to oPcrate
asa high pcrfo.nring financi:rlinslinrtionpIoliding a ridc
rangeof profitable,competitic,arrdsuPerio finrncial
services
in orLrmarket-
. Godb:To attract and tetain an olrtstandiDg staff$ho are
highh nrotivated and productile and Jro liSorotrsh Pursrre
rerenueaencrarirrgand , ol_rc.hr,
Ii.'n l ratcqir'
. ,Str.rlzg':
(lfiticall) rc,icr| our existing branctresand
departments() ensurc(ha(all branchesare coDsis(enl
in
rh.rrgoal..wrarrgr...
anrlPrnlilul,tc'lie.
Depar'tmental Irvel
. iIission(d?Potn.a ln?I/: $e $ill increrLse
thc knorledgc'
management skills,and de':ision-making abilitics ol our
branch managels so that {e rill mininriTe lossesand other
oprr:rting epenses $hile rnaximizing thc prolitabili( ol our
blanching svstcms.
Individual (Supervisor ) Level
. Potitun des(ription
lu 111irrrarraga:
Administers a
co rprehensive human resoulccs Plograln in tlre dilision to
ensurc the expertisc. ellectiveness,motivation, and depth
(including ptoriding appropriate IrranagementsuccessroD)
to the diision's staff rnembers.
Individual (Employee) I-evel
. Indit luat Pe'fon a .c InfbunatioD on various resPor)sibilities,
standardsexpected, goals to be rcached, and acti()nsto be
taken ro improve perfo.mance in thc firture

16. 14 Pmroruerctr'texrcrn*r
is alicned wi(h the srategic Plan of the organization (Addams &
F.mblr'. 1988). To do this' the bank 6rst involcd managers at
all hicrar, hnal lelels lo devrlop an orFrni/atjon mlsron stdlr'-
mcnl. Next. fiev defeh,pedEoalsan'l su?t(giesthal $ould hclp
achieve Key Bank's mission. The mission statement' goals' ano
.,*i"gi." "i th" organizational lerel sen'cd as the foundation for
develiping the strategiesfor indilidual dePanmeits -and
unils
To develop these, s€nior managers met with each dePartment
*.nue". to ai...,o Oe olganization's goals and stmtegies and to
explain the importance of haring similar items in Place in each
deoartmcnt. Subsequendy earh ol the departmenul maraqer'
mer wi$ his or her employees
lo derelup r dcprlunenl mision
statement and goals. One imPortant premis€ in this exercrsewas
that each depJment's missionstatementand objectiles had to.be
aligned rnithihe corpoiate mission statement' goals' and strategles
ie, "reattirod.nai and departmenLJ goal arrd ualegies ^(re
alil.ned, managelsand emPlores rriewe'l indiidu'Jl job descrrP
tio-n,.Eachi.u"dernption wasuilored so thar indiriduallob tc'pon
sibilities weie cler and contributed to meeting the departmenfs and
the orsanizations obiertile' tnrohing emplo)eesin this Pro(€ss
ft.ro.i,rt.- ro gain a cledr undersrandingol ho$ lheir pelfor-
mancr aflecred rlie departrnenl and. in lum the orydni"adon'
The second important prerequisite befbre a Performance man-
aeemenls]stemii implementedis lo undrrstand lhejob in ques-
rion. This is d.ne r}iough lob anurlrsisJoh analrsis is a ptoce*
o[ delermining the key romponens ol a pattr(ular 'loD_In( luo-
ing activities, ta.ks, p.odu.s' s€nices, and Processes There are
,r.r-'me.,r..sqpes oflott analltic tools' including some that focus on
soccific oersonalii trarls needed lol lariolls Positions {Aguinis
v-rrt i"*.t. & Heggestad.2009) A job analvsisis a fundamen-
tal prerequisite of an"yPerforrnance m?rnagement system' Withoxt
" iif urtutrti., it is iiiB."lt to understand what constitutes the
reiuired <iuties for a panicular job lf we don't know what an
.-ito-r"" i. ".rpp{)."a to do on thijob, *e won't know what needs
to be eraluated and how to do so'
Stage2: Performance
Planning
The performance planning stagehas the goal for emPloyees to hale
a thorough knowledge of the Perfofinance management qstem'

17. . t - r r t r i ) ' r ' o r l , ! R r r l R ! { r t { 1 ( r r r r i i
ln lact. nt the bceil)niDg ()l each FrlirInincc (clr. tl)e npcnisc,
and the emploee meel lrr disclrss.
rncl alrree()n. 'ha(Dccdst() be
ddle rnd how ir shl)rLltl
be ctonc.This pertomra (c planDinedis
cuisiur in.hL(lcra consi(l(ri(i(nrol (l) r.sulr. (2). b.hai('s. aD.l
(3) derel,,p'nenr
plaD.
licjlrrr. Rerrrftsreler r() what needs ro be d(De of lhc out
cornesarr enrpk)i1r rur prorhr.c. coDsi.terari(nr
of resutts
needs (f ilclude lhc ke! ac.()[n(al)ilitie.or broa(l areasol a
job lbr $tich rhr cnpk)vec i rcp)nsible lin.producing resrl(.
A discussion
of resulrsxlso irclurles spcci6r obje.ri.r's
thar the
cnrplovccrill achierc 1 piur ol each lccounrabililr. Objcctlres
are s(alcrrenlsol irriporranrrnd nlcasurableo lcornes.t'iDalh.
div rr*rrrcr',r rlr..rl'urrr..rr.(li' ,j*,rl- I'Frt,,r,r.,r,
c .r,,1,t.r,1..
,A.
pfffornrance s(tndard i.r :rrclrickuse.ll{) cvaluateh(nf wcll
emploeeshrrt a(hiere.t er.h objecrre.P.rfonIla,.re srandirds
provideinlbfnrrtion aboLrr
lrcepribl( rnd ur)a..eprrtrlcpcrf{)r,
nrance(lor canrple, quirlit,quanril. (o1. an.t rimc). (i)Dsi.ter
the.job of unnersir profassor.
Tr!(, ke acco nrabilitiesare )
teaching(prepirutiorl and dr.lit.l ol insrrncrionalmarefials(o
srudcnts)rn.l (2) research(crfation an.l disserniDari('r
()f rcr
knor,!ledge).An objecrive f1,, reaching c{)uld be 1() obrai,i a
slrtdrnt ev:rlua(ion()1rea(hing perlornr:rrrccot 3 oD a l poinl
scale.,n (ibjrctie lor rcscarchcoul(tbc to publishxo articles
in schola|lr reiefeed jourllals per car: Pe).tormanrcraD.tar.ls
colrldbc 1o obtain I srlrdenr
caluati()nol reachiri{r
perlorlnancr
ol at lcast: on a lpoi[t scalc ar)d 1o publih ar ](.asrone iiicl( in
scholarh felrrced joufnrl IJrr ear. Thu. rhe obje.ri( j the
dijsiredlecl of perlbrnrarrce.
rhere;tsrlre san.tafd is usuali :r
"ri in,,'r',
.,,, ' prJhl-lc, I ur prr i,,|'r,.,I(
, .
B.r.n,n,r. Afthortgh it ir irnpomnt 1(,n)easurercnrtl. aD exctrF
sir€emph$is on fesulrstan gire an incorrplere pictLrc olenlptt)ec
perlornrirnce.This is lralti.ul;rh rrue r()d.t lrcausc. in conlrasl lr)
I n el r i | r . r r r
l r i ' : r l
" r q . , n r / . U i , , r , l r . r r r , , l
r l l i - , o r l I e r r 1 1, , r q , rr / . ,
tion,the 2Is({cnrlrl'i oflrirrji,,ation
is lar rrx)rcliLeh ro lrok like a
ifeb: a flal. ilricareh (^cI n)rm rhlr links pa Dcr.s.
crnplo?es,
txtemal c{,ntri{ctors.supplier. an.l .usr(nnersin r io s collab(r.a-
tions ((iascio&-rI.uinis. 2008b). A..or{ljngli: lor sonrci(,bsit nlar
be diliicult to est^blishpreciseobjccrircs an.t srlndirrds. tor.olher.
jobs.cnrplovees
nravllae c(n(.ol oer ho.rhc do rheir j(nrs,
bur
not o'cr dle renll of rheif bchaiors. For catDple, the sJes ilsurcs

18. l6 Prrroruarcni'l,srcennr
:*ffiTili"T:i,nfTff
il"fi
"b**il'tr:iff
*'fil
tr.Ttr"l:?i;U'#'ryi****m
::hT",:jr"ji:i[',j"#,,Tl"fr
T,"uil;A;lrettilor,n,pa'k
t'
I'lll:ff f^i'l;itll'*n"r.o," incrudes
dis'usins
(omPrten-
.*'.-r'i.r'l*meaurabre
crusrers
ollllil'ii-l'Ill]i,lil,iti
::ffi.':ffi
IJlil,il'ilx".:1'l"rffiil*-ires
o'|
c'rmperen
;;;""i.;.. ".'ruice,*"ritten or oral communicauon'creanve
[*:]l*"tril*l',t-.:ll]:i!f
'].JT
jfuffi.,;;
::si^",1:?;'T.:'::J#:l'ffi
"'Ji:'':J*tl.**iffr
i"tr*
lH'ffi
iiFJi:::*$r"i::'I#"*
skills (for examPle' in the chat room) '
;ir',rq;rtlru":*T+i:Jff
"f
**..1;.*
ilI'.lXl
*:: illT,H;:l'".1f
li,ilg'
ili.i"*,.n'"".0
*.;*'n*iim*1ff
H';:;
J'#,:l
lT'Ifi
i:il"#i:
kn:;F*:m:ffi
;"','n'*;lrut:;"'
;;.1;;;;i;
";J "io"*'*.1::l;
i:*a":n:l
JIX:1':
:iff:i:;
:l:1.';lH;[il."l",.,.lrii:Tii,i::t
J,'J,,:
delelopmenr plans allow employee
questrons:
. How(an I contrnualtylearnand growin de nex(yearl
. Howcan I do belter in the future)
. H.r*."n t u"oia ptrformance problemsfacedin the Past?

19. l
:
I
I
h
Errtr rl [ $ (, PrR]oRr1( I taN 1r,rN! NI ll
Inlbrrnatior to be uscd in clesigningrtelelop )rDr plaDscomes
Iiom the appnisal lir.rn. Specificalhr a dcrelopnrent plan can bc
dcsignedhasedon cach ol rhe pc.firr)rance rtinlensi()ncalu
atecl.For ermple. i{ thc perkrlnrancc di )cnsion comn]lrnica
tion" is rate.l as substandard. dris arca rr.ould be rargercclbr the
de!clopmentplan.In acldition,
horrercr:clcrelopmenr
plansfocus
on the knor'lcd!.e aud skills nccclcd li)r rxn.e lons-trr'm career
aspirationr.
In atldition ro irrprorcd perlormallcc,rhr inclrsnnl
ol declopmeDtplans and, ir rrlore eeDcralrcnns. the identifi-
cation of empl()vec strengths and Neakncsscsas parl ol lhc pcr
tornunce nlrnagcmcnt ssrem ha.c anolher importanl bcnefit:
entploreesare rlore likeh ft) llc : isfieclr.irhrhe srslcnr(Bo$!ell &
Boudre:ru,2000).
The direct supenisor or linc Inallagerlrasan irrporrant role
in the crea(ionand conrpletiur of the emplo.ecs clrelopmeDr
plan. This actie role $ill help the superrisor understaD.trhc
processfrom the emploees perspectilj,:urticiparepolenti:rl
roadblocks and defcDsie atrirudes.and create a plan in a collal>
oratie Iashion (Dunnnlg. 200.1).!'irsr. rhe supenisor r)e€dsro
explain lhat $orrld be re.tuircd for tbe ernp)orc.crc,achiele rhe
desiredpeffbrmancelerei, inclrrdirrgdle srepsrharan ernpl(xee
must take to improie pe.fornrance. This inforJnati{D needs
to be providerl togerhc. rrith irfi)rmation o,) rh€ probabilin ot'
success
if the empklrcc conrpleres rhc sLrggested
sleps. Sccorrd.
lhe supenisor has a priman lolc iD refe:r.ing rhe c plolec ro
appropriate dcrelopment acliirics rhar can assisr$c crnplovee
in achievineher goals.This inclrrdes
helping rhc ernplovee
setect
a mentot appropriarc rcxdnrg resour.cs, courses.aDd so lbl.lh.
Third, thr supenisol rericNs and nlakcs nrggesti(rrs aboul thc
deleloprrent objectirt. Specilicalh; rhc' supenisor. helps irssurc
lhc goalsare achicvable,spe.il;c, and doable. Follr.rh.rhc srpeni,
sorh:rspriman resFmsibili[ fbr checkiDgotr rhe cn)ploee'sprog,
resstor?rd achieing thc dcelopmerr goals. For ex:unple, dre
supenisor c:rrrremind thc empftx€e ol duc datesand reise goals
il needed.Firudl; lhc supenivn needs to proride reinlbrccmcnrs
so thc enrplolee will be motiared lr) achi$e rhe .terelopnrcnt
goals.Reinlorcemcnts can be exlrinsic:u)d iDclude rex.ardsluch
as tFnuses and ildditi()nal beDefirs,b r reiD{arcemenrscan also

20. 18 P.RFoRvacLM^N^cEM.r
include the aasignment of more challenging and interesting work
that takes adantaqe of the new skills leamed.
Supenisors themsehes need to be motirated to Perform func-
tions ihat .llill support the employees'completion oftheir deleloP
ment obiectrves.For this to bappen, supenisors must b€ rewarded
for doing a goodjob in helping their employeesdevelop. Consider
how rhis is done at Kl-{-Tencor C,orPorztion, one of the horld's
top ten manufacturers ofsemiconductor equipment (Ellis, 2003).
Af KLA-Tencor, between 10 and 30 percent of supenisors' bonus
pay is direcdy tied ro employee developrnent. Employee del'eloF
ment is measured in terms of employee training and certification
levels. Managers are gilen at least quarter updates on the sta-
tus of their staff development. In addition, employees themselves
are reLffded for engaging in development activities. In fact, only
employees wiih uptodate raining and certrlication levels are eli-
gible for bonuses. Thus, employee derelopment is successful at
KL,A-Tencor because both employees and managers are direcdy
rewarded for employee develoPmenL Alter several years of imPle'
menting these pracuces,emplo.veedeveloPment has become the
norm and is plLnol Kl-A-l-encor'sI ulturr '
As an example of the implementation of development plans,
consider (he caseof General Mills (Ellis, 2004), where individual
development plans (IDPS) are promoted strongly throughout
the company. The Minneapolis, Minnesota-basedG€neral Mills is
an inlernational foods company. Some of the best-kno n brands
include Pillsbury Cheerios, Green Giant, and Yoplait. The for-
mally wrirten IDPS are completed annuallv, but the exPectation
is for ongoing conversaoons between managers and emPlo,vees'
focusing not only on comPetencies that are well developed and
thos€ that are in need of improvement, but also on employees'
carecr aspirations.The romPanvs IDP scason Promoles lhe
process for employees by hosling speake.s, offering web-based
learning tools, and holding workshops for emplovees and man-
agers to get lhe most out of the procei.s Some of these sessions
are specifically tailored to different kinds of positions within the
company with different needs in the development process.Also,
the IDP is kept separatefiom the annual performance apPraisal,
as the b€lief is that development planning cannot be sufficiently
addressedin the context ofappmisal.

21. [prr rJ ft s or PrRroR1( | IlaN (,!N!N1 lt]
!'illalh a ftxrl tha( has bccor)rc polrular in helpiDg empk)rccs,
parli.ulaflr thoe in supeniso'' roles, irnp.oc pcrf()rn)alre b
galhrling inldrnation lrom.iifiil.cnt eroups is the 36(!.tegfce
ieedhx(l svstcrn
(l(nseson. lrrrlnrrl. & tlanrpnri, 2(X)5).
These
ssremstle cirllcd :16(klegreeslsleInsbe.ause irlli)rmarion i calh-
ered liom in.liichal :rllaround rhe eIrlplolee.Spe.i{icalh.inldf-
m;rli()non tal pernrrnrancedinleDsions
.oLrldlr implr^cd i
gathrrcdfronr slrperiors,
peers..usr()rncr'.
nDCl
sub(nclirratc.
Ihis
intornrati(mis usrralhcolkctcti aD(nNnroudrn) nrinin)izer':rtini{
rnflati(m.Empbrccs also ratc thenrselres
on the i{nrsperlor-
nance dinrcnsi(rrsarrd co:npareselherceprionsrLith rhc irJi)f-
malionproideclb others., t{apaDah
sisiscondLrclccl
r(,cxan)i c
the rfcas for which there are l:rrge.lis.rcpancicsbctwcer sclt
perccpuons
rrd the percepli{)ns
ol orhcr.A 36(klcerccfcrdback
svsrcnr.cPtrt unralh in.ludes inlalrrati.r) (rr dirrc sjoll li'r
idrich thereisagreemenl(hallir'lhcr dcrckrprnerrt
isneederl.l his
rnfdrmrri(D is usedro crcltc:r dt'el4rrlent pian. Implemenling
a Sti{trdeerec
fi'cdback s,tlenrshould Dol be.r one-rimc-onl! ccnt.
The sstcr)lsholrld be in ph.e and daLl collcctcd ()cr tiur.()n an
ongojng basis.Ihe imptemerlari(rr of urgoiDg 360tlepee lee<t
back srstcrrrsis sonetimes labcled it 720<lc!.rcc tfcdbacl svstern.
rcfcrrirg to the lacr dr:l rhe c()llccli(rr of 360<legree data takes
place at least rlri.e. In shr)r'l.adrninite llg the slstenl orlh oDce
$ill not be asbcncficitl asachrinistering the ssren repealedl.
()nce (hc prclrquisitesare rrreland the plannine phasc hirs
beencompleted-r'eare rea.lvro bcein lhc ;rlploncntation oftLc
pctfcrrnrance
managerrrenlsrstcrn.This nrcluclespertirrrnance
cxecuti(m.:rssessnrcnt.
rcricr, arrtlrcll$r'alan.l recontracrjnia.
Stage
3:Performance
Execution
On.e thc rcior crcle begins.Ihe enrplo'('cs(ric l() Irroducr
the fcsultsand displ:rvthe behai{)r a!.rccd 0rr earlicr as nell
as to r.ork on .leleloprncnt ,)ccd. Ihe ernpl(xee has primar'
resporsibilin anrl drneirh{r of this process.Empk^ee pani.i-
p:rtion .toes nor bcsin xt thc perfom)ance execntioD srage,h()$-
ever.
,{s noted carlicr,cnrploreeslleed to hae adie inpnr in rhc
deelopm.n( of thc job desc prions. perlbrnlan.c slandafds,
and thc crcation of tlre lating lorm. In addition, at later stage.

22. 20 PiRroRM^NctNr^NActvtrr
employees are actrve ParticiPants in the elaluation process rn
thai thev provide a s€lf-assessment
and the perlormance revlew
inteniew is a t.*o_way
communication p'ocess'
Although the employee hds Primary responsibilities. for
Derforma;ce execution, the suPenisor also needs to do his or
i.. sha.e of the work. Supewi$rs ha€ primary responsibility
ol'er the following issues:
. Obta- olioTtonl do.ltnnlulion suPervirots musl observe and
document performance on a darly basis lt is important to
keeo track ofexamples of both good and poor performance
. t ralr.er.A: r}le oryanization's goalsmav chzLngeit is imPortanl
rJ uodare and tl"i.. ini,int objecti?s standards and ke)
accountabilities (in the cas€ of results) and competency areas
(in ihe caseof behaiioE) .
. Iaadbacft.Feedback on Progression toward goals and coaching
to improve performance should be provided on a regular
basis. and certainlv before the review cycle is over'
. R"sorrt"r. Supervisors should proride employees with rcsources
and opportunilies lo Partrcipale in detelupmcnl activiries
it'"t. ir'.y sh'uld encouragi (and Ponsol ) parti( iPation in
training, .la-...es,and sP€cial assignments Overall' supervisors
have aiesponsibilitv to ensure that the employee has the nec_
essarrsuppliesand tundinB lo Perlorm the iob properlv'
. n"iri-ilrr,^t. supervisorimusr ler emPlovresljto]v rt-ta'
itt.i'. o,tt.t"nalttg performanceis noticedby reinforcing
effective behaliors and Progress toward goals' Also' suPe _
sors should Provide feedback regarding negative Pertornance
and how to remedy the observed Problem' Observation and
communication are not sumcient Performance problems
must be diagnos€d early, and appropriate steps must be taken
assoon asthe Problem is discovered_
As an example of this shared responsibility in an actual or€a-
nization, consider the ca-s€of lnckheed Martin CorPoratron' an
adranced technology comPany that as formed in March 1995
with the merger oitwo of tlre world's Premier technology com-
oanies: t ockhled Corporation and Martin Marietta corPoration'
i,ollfr..a Uuni" ftu. .pproximately l'10,000 employees worldwide

23. I
t
!_f rr D rl or pi:RroR!rr.r Ur1rror ,ll
l lhc Battiit ! Surr, 2001t). The arc engaecd in thc research.
dtsign. dcrck;pnrt.rrt,
manufacnn.c.
anrt i regmrioD()f adaDce.t
tcchnologr s$tcrlls. pr.rxlucrs. and scr.!ices.I_orkhee.t Ntarrirl s
pok)nnar(r m:rnasementilstenr jrcludes the aclic l)articjpr
txrn of both rr pkxces arrrtrhrir supc|risor.s.
Spcciti.ath.crnplo-
eeswrite rh(ir orrn pcrk)rmirncer)aDlgenen( objectncshasert
on (nsani/atrcnand unir objccries.
Tl)eD,rnaragells
irpprole rhc
objcctnesard:rrc cu.ourrge.t ro gje ong()irrgkcdback atrur
tlre pmsress r(xvar.lnrcctiDqlhe obj(c(ies.Thc acnral p|Itor_
manceapplrrisal
ldrln isan elccrroDic,
('l)e,paec
cornpulerscreen.
'Ihc
progmnr ras clesigned
ro "in.nc
enrptoeein sc[ing rh(.ir
o$n gollls. to m"le dlosc lroals(:1car.
aDd to prolidc reglllar.fcr:rt,
backon theil p|ogress
roirrrl r.hiciDg rhosei{oal.,.
'har derefnrinesrtlrrther an cnrptorceis perfonning {cll or
not?r cornbinirridl of rhree licr().s :rllowssonrcpeoplc 1()pef_
form ar hiflhcr leetr rhan orhcrs:(i)tteclar.arireknoil(.dge.(2)
proccdural k'loltledge. and (3) motjarion. Dec]ar.atjre
kno$l
edgr is infirmr(iclIr ihort iacrsar(t rhings,in.ln(lirrg iDliirrna-
tiorrreeardineir gien tasks requiremenrs.labcls.principtcs.and
goals.ProcetiLr.alknoi'ledge is l colnbillrrj{D (,t knoNins whal l{)
do and hoN ro do ir a,rclin.h,descognilne. phrsical.pcr(rtrnral,
motor'.:rndinrcrpel:(nlirlskitti.t(niarjur iD(tes rhfcc h?es ()f
choicebehatius: (l) choi.c ro eripcndefibrt (Ior.eranrple.
..t
$ill
go to wofr t()da"), (:,1)
choice of lerel of efio (for exa,Iple,
"I
$ill put in mr besrr:fhl r ar rork rcrsus ..t
ljll nor rl ien.
h a ' d , . . , n d. 3 ' , l r , , i . 'r , ,p e r . i , r r r h , c p e r , , t i t |
c n t r l r . , r
t c ! . 1
ofeFort (lbfexamplc, I 'ittsieup aflera lirrlcrrhite..rcFrrsIrvill
persi( no nl:uterrlhar").
BecaLrscperlbl rance i afiectcd b rhc combinctl efiicr 01
threediflcrent lirct(ns,rna|lagers
rnlrsrllDd inlb.rlatjon that rili
allorvthcm ro uldersraDdwhcrher rhc sour.c of the problen is
declar:rrie knowle.lsc, pr.occtlur.al (llo{ledge. moriration, or
somc combi arion of rhrse tl)ree fac&)rs.If an enrpk)eelacks
motiiationbur rhc manaecrbelicesthe s(Jlrrce
ofrhe problon is
declaratire knoledge, rhe manager mav senrl lhr ernplocc ro a
companvsponoredtr.ainingprogmm so thar hc ran acquirr the
lno$tcdge thar is presumabh lacking. OD tbe othrr hand. if nlori_
latron is dre problem. then rhe implcrnenrati.,n()l somc tlpe of
CP plan nrr he a good inrenenli.rn. This js rfh. pcrfonrance

24. 22 Prrrotuxcr t'lrMccun".'r
manasemenlsyslems
need not on to measurePerfolmancebul
alro to'ororide inltrrmation aboul lhe sour(e ol any pel formance
rleficiencies,which is done in the p€rformance :rss€ssment
stage'
Stage4: Performance
Assessment
ln the as.s€ssm€ntphase, both the emPloyee and the manager are
resDonsible
for elaluatingthe exltnt lo which the desiredbehav_
iori hare been displayed.and whethel the desiled resulE hate
been achieved. Although many sources can be used to collect
oerlorman(e intormation (lor examph' Peersor subordinales)
in mo.r care. rne direct supewisor Providesthe inlormadon This
also includes an elaluation of the extent to which the goalsstated
in the dereloPment plan have been achieled This is the stage
of the performance management process that has received the
*"rt."i "tt rrtion from I/b psychology researchers (Aguinis &
Fierce, 2008; Bennett, l-ance' & r,!behr, 2006)'
It is imDortant that both the employee and the manager take
ownershio ol the assessmen
I proress. fhe manager fi lls oul his or
her oooia;"al form, and rii employee should also 6ll out his
". rr.i io.t". Trt. facl lhal bolh parues are invohed in the zssesv
ment prolides good information to be us€d in the review phase'
!hen both the employee and the suPervisor are acu{e p:tl:ncF
pants in the evaluati;n Process,there is a greater likelihood *lat
ihe infor.rtation will be used productively in the future SPeci-
n.lU ttt. inclusion of self_mtrngs helPs emphasize Possible
discrepancies between self-views and the views that imPortant
other; (that is, supewisors) have lt is the discrepancy between
these t-*o views thit is most likely to trigger deteloPment efforts'
Darticularly when feedback frorn the supervisor is more negatlve
ihan are employee self_eEluations.
The inclusion of self-aPPraisals is also beneficial regarding
important additional factors. Self-appraisals can reduce an employ_
ee"s defensiveness during an appraisal meeung arrd increase the
emDlovee's satisfaction with the Performance management sye
i.,ri. * *"tl * ""tt*ce perceprions of accumc-yand farm€ss and
therefore acceptance of the ststem (Shore, Adams' & Tashchian'
1998).

25. I rD.D rlr or I}:RroRrA.F Nl1N1(,rMrNr ll
Ar an illrrstlation, corrsidcr the caseof [.NSR, a tirll-scrice glo
bat pr<xider of cnironnrental and encrg' de|elopment seniccs
to in.hst.t and golernmenr (IaCharce. 2006). ENSRs l$o rhou
sanciprolessionrlspr()ide clienrswirh ..nsulrnrg, engineering.
remediation. and related senices liom Drorc than serenrvr()rld-
$ide locations.including fort,lie in (hc Unircd States.INSR h:rs
createdand utilizesa scorecad ith six categoriesrhar are directl'
linked to its 6e-ve: ision: hcalrh and saien, errploree cngagc-
mcnt, client louln, cost itanagenrent, prolllabilir.r, and re.enue
groN.th.This information is Ised in rhc colnpaDr's elaluation ol
curfent pc.forrnaDce fi)r indi|iduals and groups uith a scorecard
lha( shors cLrrrentperlbrnrancc against "arerage' in(ernal pcrfor
mancc and 'top 25 perccDt pcrforrnance. {anagers a.c cxpecred
to utilize the scorecard i|l discussionsibour perlbrm?r)cc and to
discussthe relationship bctseen the merrics and rhc direclies
and initiariles frorn senior rnanagement. Th( corecard is a i(x)l
used to motiYate emplorees ro achicvc top perf()rnrance an.l lo
proYidc a clear link ben{ecn cach indi|idual and leam acriirr
to thc strategicobjectircr of the organizarion. In surnnar, LNSR
utilirera h.rlan,e,l
vure,ard r, l r,, jir ma|l.tH.
j I'r a5.csrnH
and reiewing perforfilance and ensndng a closc link ro rhe objec,
tivesol the organization.
Stage
5:Performance
Review
The perfonnance reiie slagc inrolres the meering betl,rccn thc
emplolee and the managcr to reier their asscssmcr)rs.
This
mccting is usualh callcd the apptaisal mecrine or disclrssioD.
Thc appraisal meeting is importanr becauseir prrJvidesa fonnal
setdng in rshich thc cmploee receivesfccdbark on his or her.
perfbrmancc. In spite of its imponancc in perftrrrnance nanage-
ment, the appraisal meelirg i5 oftcD regarded as rhe "Achillcs'
heel of the entile process" (Kikoski. 1999). This ir becauscnanY
managers are uncomfortable proiding perlbl.nrancc fcedback.
particularlv rvhcn performarrce is deficicnl (Ghorpade & tlben,
1995).This high k:vel of discomlb , $hich ofie| translatesinr()
arlietr and thc aoidance of rhe appraisal inlcnic$, can be miti
gatedthrough trainirrg those responsibJcfor proridirrg feedback.
Providing fcedback in an ellcctic manner is extremeh important

26. 24 P*ronvercnMrNrccvrM
because it leads not only io perforrnance improvem€nt blrt also
to emDloiee satisfacdon with lhe system' For examplc' a studv
i"r.rri'"n'-".. than two hundred teachers in Malasia' includ-
i"" i"alila"^r. -";,rt distinct chinese, MalaY'and Indian cultural
ir?l*.""ta", found that when the,v receicd effective feedback'
,fr., ?.ooa.d g..^t., satislactionwith the 'rstrm een I'hen lhey
,..ii'.a t"* frtr".-an(e ratings
{Rahman
20o6lAl lhi' Pornr'
io*.n ., t"t .'.-ptt"tlze thatpeopleareapprehensie
almrt both
receiinq and giing Prrformance inlbrmation and lhis dpPtehen-
si.rn reiifor.e" rie intponance ot a lotrnal Perlormdn'e re ier as
oan ol anYperforman( e mani{gemenl svlem For example Ja(r
W.t.t, r".-., CEO ot CE. ha-s
addlesed rhis issuein Inanv ol nrs
oubli. "op.*n....in(e he rehred Al an apprarancein fronl ol
i" l"aiJ'i. | "r abourt*o rhousand
managers
hc astc'irhemil'
their orqanizations had integrity (Rogers, 2fi)6) A5 $as expected'
" "^, -'.1";," "f -."agers'-about 95 percent' raised their hands'
itr"" tt"L[a the saml audience if their organizadon's leaders
Drovide subordinates bith honesl and straighforward Pcrfol_
mance feedbatk. Onlv about 5 Percenl o[ lhe PeoPle rarseo
their hands. Avoiding giving negati€ feedback is ery dangerous
becaus€ it conveys the message that mediocriry is acceptable and
damages the morale of the top Performers'
tn
"*o.,
,t.t, rhc aPpmial meeling is regardedas a rcrcw
ol lhe pasl. lhal is. whal wasdone {resulls) and ho'! rl i'rs oone
it.touio..l. f-.*u-ple a suney including more rhan l50orga-
nizations in Scotland showed lhat Perlorman( r managemenl svs-
;;; i; -;t. than 80 percenr oi organization' empha'i/e the
Dast{Soltani,2003) Howeter' lhe aPpraisal
meeling hould also
include a discussion of the emPloyee'sdevelopment progress as
*.ff * pf"". for the future The conversation should include a
Ji"...rriin of eoulr.rrd development plans that the emPloyeewill
i. .-o..i.a io achieve over the period before the next review
;;ttJ. i; addition' a good appi'isal meeting incllrdes infor-
-o,ion o" what new co-mpentation' if anv' lhe emplovee m2)
be receivjngasa resultofhisorher performance lnhorl lne
appraisal disrussion locus€son lhe Pasl
(whal has been done rnc
how), Ihe pres€nl(whal comPensationis Ieceiled or denied asa
result), uni t}e l,.tu.. {goals lo hr alEined brfore lhe upcomlng
reiew session).

27. A lip1Dn) 'rlr or P.RroR^r4No }{1-Acry^r l5
ln scneral. (;rossman aDd Parkinson (2002) offer.rhc follo$"
ing six recommendarions lbr conducting ellicrive pe.formancc
l. Identih whar the emploree has done l.ell anct poorlv bl. cit,
irg specilic positie and negadre behaiors.
2. Solicit leedback fiom vour cmptovec abour (hese behaiors.
Listen Ior rfacriotrs and explanariorr5.
3. Discussthe inrplirarions of changing, or nor changing, rhe
behariors. Positire ficdback is besr, but an emplovee musr
be made a$are ol $hat i{ilt happen if anr poor pertbrmance
4. Explainro the enrplovechor.ski s usedin pasrachicemen6
can help him or her olcrcomc an.r'curreDt performancc
problellrs.
5. Agree on an action phn. Encourage rhc emplo,veero inesr
in improving his or her pcrforrnance b asking qucsrirrrs
such as 'lhar
idcas do r.ou hare for _?. and ..i{,har
sug-
gestioDsdo You hale lbr _?"
6. Set up a mecrin€Jro folkxl up and agree on (hc behaviors,
actions.and artitudes ro be elaluated.
Stage
6:Performance
Renewal
andRecontracting
The final sragein the perlbrmance processis renewal and recon
tracting. Essentialltthis is idenrical to the perfor.nranceplanning
component. Thc main difference is that the rencwal ancl recon-
lracting stageusesrhe insighl-sand informarion gained fron rhe
orher phases.For exanlple, so[le ol rhc goals mav have bcen set
unrealisticallv high eiren an unexpccted economic do$,nrurn.
This ryould lcad ro setting lcssambiiious goals for rhc upcomiDg
reiew pedod.
The performarrce nranagement proccss incluclcs a cvclc rhat
starls
$ ith prer.,luiirc! an.l e||dsNirh perl,,rman,e renctldland
recontracdtrg.'l-he clcle is nor oer afier rhe rcre$.al and recon-
tracung stage. [n fact. the process srarrs all o€r again: rhere
needs to be a discussion of prerequjsites, including thc organi-
zations mission and srrategic goals aDd rhe job's XSAS.Becausc
marketschange, customcrs' prefcrences and needs changc. and

28. 26 Ptrrorrnrcrueneceurxr
Drodu.ts change there is a need to contlnuously monitor lhe
i..r*to-." i dral perlormance Planning and all lhe sut]
l.ou.n, .oe.r, are consistenl r*rlh lhe organizatron s lraleglc
obiecLires.iecall that in rhe end one of the marn goals ol anv
i]li"r*""." *rn.e.menl slslem is to promole the achievement
ii "tg""t"t,i." *a"" goals bbviouslv' if managers and emPlov-
"." .i. ,to, "r"-. of thes€ strategrc goals' it is unlikely that the
o"at"a--aa --"g"ment systemwill be instmmental in accom_
plishing the strategic goals.
Additional lssues
to ConsiderRegarding
Team
Performance
A tram is in place when two or more peoPlr interacl drlami-
;il;; ;;,J;;;endv and share ^ 'o"on and valued
"li. "ui*i"., .'' -ission (Reillv& M(courw lg9l) Examples
:i;;;;*. from a group ot top managers
working rogerher
i".oi-f".. &r an ongoing uaslswith the goal of achievrng cor-
Jo.u," no"l. ,o u group of Programmers
in India and the Uniled
i;;;;." p.3s.";-i;'s iode rhat eventuallvwill be put
;;;;.' ,; "'J *i*are pro'gramTeamsdo not havero be per'
rnln.nr, -a leam membersdo not havelo br in the samegeo_
sraDhicallocation.ln [acl. leam memtrrs do not nred to have
l..i -"ii" oersonlo br members
of lhe samcteam Aslongas
trt. *"ti id",n... "..a eacholher' and sharecommon Eoals'thev
ureconsiaeia to be membersof lhe same(eam Numerousorgd-
l;;;.;. structured around teams' including teams called
autonomous work groups' ProcessGams' and self-managingwork
teams
(S(olt& Einstein.200l)'
Organizations (hat choos€ to include a team component ln
thJ!..fo.-.rr.. -anagement q/stemmust Provide answersto
lhe following quesrons:
l. How do we assess
relative individual contribution? How do we
' 't"'"*
,i" .*,.", - which particular individuals havecontrit>
.,iJ to i..* ..r.ttar How much hasone member contr:ibuted
in relatioD to the other members?Are there any slackersor
i."otiJ.." "" aft. ,.-? ls everyoneconributing to the same

29. . [ pDr D r! $ rn Pt Rrr,k! 1(r ta1(,] {r ! | 2l
extcnr,or:rrc snrnemcnrbrrscofcr.iDg
up lbr the la.k ol c(nr
rfibutioDof orhers:
2. tlo$ do se balanceinrtnidual and rcar)rlrertb. raucerHow
can $e mo(jvatereanr reDlbersso that the supporr a col,
lcctire missionand collecricgoals?In rddiri('r. h(iw do rLl.
rotivarctcaln mcn)bersro bc accounurbleaD.l .cspoDsibl(.
indnidrullv: In ()therords. hoN rto rt arJrierca goorl tl|l
ance brtrreen rneasuriDe
arrd rearding indiiduats in rcla
(io ro reanrIrerli)rntance:
3. Ho$ do rveidenril indj|i(tual and rearr rneasrrres
of l)ertor-
mancei Flol can e i.tenliji rneasur.es
ot perlirrnranr.e
thar
indicirtein.liiclual per.ibrnrance
rcrsrrsmcaruresot pcrlirr
mancc thar indicarereit|r perlor rancei I'trcrc rtoesindirid
ual pcrtarmance end antl ream pcrli)nnancc begin-: t'ill1lh.
basecl
on thcc rnerisu'e5,
ho'do e allocarcre,afds
10indi,
viduals versusteanr!:
lle.aD use the sanresi tages.lescribe.t
eirr.ticr
anctinclutle
team pcrformancc bl lolloing rhcscix basicprnrciplc (Salas,
Burkc,& Fo$lle, 2(XXi)|
l. IIok( sut?.tou,.tm,t rcnl t t?utt.,snorctl aborc. rher.ear.c
different tpes ol rcarls. Rcfore a tean)co)nponcnt is inr.o
duced in the pcrforlrranccnranagcn)errr
svslcrn.
{e nr,cd t()
makc surerhc Lrrgrnizarion
hasic(ual reaDrs.
2. IIatu thc itn,.tln.nt 1, ,r.a. /,a lcasuriDe rcarn per.firrrnance.
as is the caseilh uleasruinsin.ti|idual perlin.nrance,
r:rtcs
trmeanclcflirrr.The organi/arionmusr be rea.h lo make rhis
inr.rnr.'|rl,,r'1,,n'eanr'..ru iel.l ! t t d.r'd
3. Dc.JIn(
ncasuft at gaalr rlearir.Defining ho$ rhc (tar.twilt be
used (fol.example.adminisrraricers s.tcrloprnenlal pur,
posc5.
or borh) is r decisionrhar rnrsr bc kken bctinc rrea-
suresol (carnperfo.tnancearc designed Ar is rhc caservith
indnidrel lelel drh and discussedrhroughoL,rrhe bo(,k.
there arc dillercnt variablcsthar musr be takcn iDt()a..oLrr)t
in relationshiplo rhe mcirsuresprrrpose(tb. cxample.$hal
Irill bc dre soruces ol dirra, horr dara rill bc colle.red. an(l
solbfrh).

30. 28 PttuoRirANcu[NrcFIrNr
4. (lsea multiaAlhod
awoa'h lo neasumnznt'
The measurement
-
.ri't."- p..f.,..t"'ie is complex Thus' multipte methods
and souriesof dataare"t." "...".1:;or^r/proceseoriented
b- Focus
onPt'ess as,u?t!^
Ti':1::::'**l f"r individuar asrbr
me:rsuresaswell asresults are asul
l*r',:*xlm;rmm:lTliT:;ITi;"i
be usedwithin lhe ( ontext of managingleam prr'orman'(
i
6. ]y,p&uv
langInm tnangu Aldough horl-term Processe' arru
resuhs are easier to measure' rt rs rmpofiant to also consider
ionnla..- -....,..t "f Performance
Team Performance must
i. ia-ot.d o*". u "-iet.v of contexts and alsoolcr ttme'
(ionsidereachof the sagesof rhe Perlormani e managrmenl
o';.:;;h;;-i" F"ure I"l and how thev can bc modified to
l..o,,,'"odur"
dredm
componrn,.
t'^,;
;f;ill'l: ::'.';l:'i}'j;-
in addition to considering the team :s
ff;*;;;if "tto'n'i"ar'ia"'t' to make a positive contri-
i irt""-- aft. ..*. these includenot only KSAS
relateddirectly
i" itt" ,*t at hand, such as a programmerwho needsto nave
i"".Lag. of ihe programming language These are KsAs that
r." ..o.lidt" .ottdu.iie to team Perlbrmance such ascommu-
itlt,i", ilrt,"" -aking, collaboration' rcam leadership'and
*ie.-i"iiCr'."g Dairiw& Moore20o5i
Reilly
& vccourrv'
lgs8,R;'.*,". eib. &sa'oie
20{16)
Resar:l':i:'.:lliJ;:
Dlanning, this suge must include
!;';;:i't. ;*;trJ ;xpected or the ream brhariors epecred
lii.'-1".-u*r, .ti d'r'elopme"tal objectives
to be achieved
;; ;;. ;- and its members- Regarding Performanc€ execu-
t.",-L.- -.-f.* teed to be committedto goal achievement
;;'.;;;il ;k. a Proactile role in seeking feedback rrom one
onottre. aswett a. fiom the supervisor (if there is one) ln terms
;;;i;;;. **"ment' ali teammembers
musrealuare
one
;;5;i;;{';;;,".e as wel as rhe oerrorman'e or the team
overall. ln addition, d'e s"petT v'r t'raiuates the Performance'of
.;.;;; ;-";;' * well ; that of the team asa whole Finallv'
ffi;;;;;;;;.; ,.ams alsoetduate the performance of.the
;;;. il;;;;H "pPlv onlv if membersof other teamsha€ tirst-
funJ "*p..i.n." *itrt 'he Perfbrmance of the team in question

31. A ExpaDEDVTFw or PrruoLw^r.'cF MANAcTnENT 29
Itisimportant to emphasizeaharthree q?es ofp€rformance need
to t€ assessed:
(l) individual performance regarding task perfor-
mance, which refers to the specific activities required bv one's
individual job, such as a programmer's abiliry write qualiry code;
(2) individual performance regarding conrexruat perfornance,
lvhich refers to specific activities that contribute to team perfor-
mance,such as team members cooperating with each other; and
(3) team performance as a whole. Regarding rhe performance
rcview, at least two me€tings are needed. First, rhe supenisor meets
with all members of the tearn together. The focrls of this meering
is to dis{uss overall team performance, including results achieved
bt the team as a whole. Informarion for this meeting comes liom
!€am membels e,aluating their collective performance, other teams
e"luating the team in question, and the superiisor's e!?luation,
Second.dre supervisormectswith edrh (ram membcr indir'idltalll
The focusof this meering is to disflr-ss
how r}e individual s behai-
iors conlributed to team performance. Inforrnation for this meec
ing comes from individuals eraluating their ovm perform2nce, peer
ratings of the individual's performance, and the supervisor's elalu-
ation. Finally, the performance renewal and recontmcting stage
is identical to the perfomance planning stage; howercr, perfor
mance renerral aDd reconl.i_acting uses information Fathered dur-
ing the review period to make adjustments asneeded. For example,
somenew key accountabilities and competencies may be included.
C,oNusely, some goals may have io be adjusted either upr$rd or
dovrnvrard.
In short, including team performance as part of the perfor-
DUmCe
mzmagement svstem involves the same basic components
that are included in individual performance. An imponanr di!
ferenceis that, in addirion to individual performance. the svstem
iocludes individual prr formanre as ir aflet a lhe luncrioning ol
the tean, aswell as the p€rformance of the tearn as a whole.
PertomanceManagementBestPractices
What do we know about performance management best prac-
tices?What are ahe featur:esof a performance management s)stem
that are likely to produce good resuks in terms of individual, team,
md olganizational p€rformarice? The following characteristics are

32. 30 stcoruxcrt*urcrusxr
likel to allow a p€rlormanre managemenl syslemlo be su(cessfu]'
."a *t.-i"f ui. .ft"pters in t}is 6oot descritr thest leature' in
i.oif. N",. ,ft.a p*.tic,l consttaittts may ttot allolv for the imple-
irJta,iot or "I'*.". features' The reality is that perforrnance
;:;;;;.t, s'vsrems
are tldom imPlemrnred in an idcal wav
,'ti.ei"-, Hi.ii g c.*y.2005t Forexampletheremavnotbe
umcienl tunds lo deliver raining lo all PeoPleinvolveo superu-
v)rs mav have bias€s in how they provide Perlbrmance radngs' o-r
oeoole may be iust luo busv lo Pav altenlion lo a ne4 olBanl'/a-
i""!i-r.i"lti".
",r'"
requires
rhiir dmr anda(ention However'
*'.1i."J.*-.tri"".rs' we shouldstriveto placea checkmark
;;; eJ of these chamcrcristrcs: the more featu:es that are
.fr..t a, ,ft. -".. f*ely it will be that the systemwitl live up to ia
promis€.
. Strakli. tott!ru.nc?-The wslem hould be t ongruenl with.$e
".i l"i-"L-i-""n s straregv ln ot.her words individual
"."i" ^"" # "figt.a widr uniiand organizauonal
goals
..
. ithortuehnz:s. The system should be lhorough regarorng
;;;";i;;;:-".. First all emplovees should be evaluard
(in(ludinq managers). S€(ond all major iob responlorn-
rl". shouid be evalualed (including brhaviors and results)'
Third, the evaluaEon should include performance spannrng
lhe entirr reriew Period nol just lhe few weeks or montns
before the review.
_finally'
feedback should be given on posr-
;;;;;.;;;r;.. *pects as well as those that are in need of
imProvement.
. nia;^t;n. Slstems that are loo exPcnsive lime<onsumrng'
and convoluted will obviouslv nol be effective (;ooo eas!-
;;.;;;; (for example, performance data are entered
J. "...lni."art ."r*arei are available for managersto helP
G- -uL a"ii.iott.. Finally, the benefits of using the system
ir"t_.""-tr., increasedpirformance and job satisfaction)
irr"., u .t " * out'neighing the cos6 (for example' time'
eflorr,exPense)
.
. M?aninc[uln?s5.
lhe s]slrm musr be meaning{ul in sevelal
*u"t fi*, tft. .o"a"tds and elaluationsconducledlor each
i"u i".ri". murbeconsidered
i"p-T' 3ld-i:l:'-T":
Lcond. performance assrssmentmusl emPhasizeonly tnose

33. A Exp DEr' yrEtr otsPrsoRM^NcF M^xAcEvEr 3l
functions that are under t}e control of the emDlovee. For
example. there is no point in lerting an employ;e know he
or she needs !o increirse the speed of service deli!€ry when
the supplier does not get the product ro him or her on time.
Third, evaluations musr take place at regular inten-dls and
at appropriate moments. Becaus€ one formal e.aluation
per year is usually not sufficient, informal quarrerlt reviews
are recommended. Founh, the system should proride for
the continuing skill developmenr of e,aluators.Finally, the
results should be used for imporranr adminisfiative deci-
sions. People will not pay attention to a slstem that has no
consequencesin terrnsofoutcomes that they lalue.
qp"dl.rry. A good system should b€ specific: it should provide
detailed and concrete guidance to emplovees about what is
exp€cted ofthem and how they can meet theseexpectations.
Identifution of effecttueann in4fectiae pe{om.an(z. The perfor-
mance management systemshould provide information thai
allows for the identification of efiective and ineffective per-
formance. That is, rhe slstem should allow for distinguish-
ing between effective and ineffective trehaviors and resuhs,
lhereby also allowing for the identification of employees dis-
plafng larious levels of performance effecti,eness. In rerms
of decision making, a q'stem that classifies or lank all le€ls
ofperformaDce, and all employees,similarly is useless.
RcliabiEry.A good sysrem should include measures of perfor-
mance that are consistent and free of error. For examole. if
iwo supervisors prorided ratings ol rhe same employe; and
peformance dimensions, ratings should be similar.
yd&diry.The measures of perforrnance should also be ralid. ln
this context, lzlidity refers to the fact that the measures include
all relel?nt performance facets and do not include irrelel?nt
performance facets. ln other words, measures are releva.nt
(include all criticil performance facets), not deficient (do nor
leaveany important aspectsout), and are not contaminared (do
not include factors outside of the contlol of the emDlovee or
factorsunrelated to performance). In shorr- measurei include
what is imporlanr and do not ass€sswhat is not important and
ouaide of the control of the employee. For example, the gon-
dolieri in dre City of Venice (Iraly) have had a perfomance

34. 32 PnMoRtaNcr ![ANAGTMEN r'
managemenl ststem lot about one rhousand vears {trhntton'
:ZOOIrl,l-"ne'",h., relerant performanr^edimehions older
rersions o[ thc p€tlorrnance manaSemcnl s]sFm lequlreo
"""lJi".i ," a.."""u-ale tieir level of rowing skillsand rhcir
lbitiry ro rratt"pon people and goods salelv Thee are clearlr
,.1*" i ai-.Jt.i"tl. ot".u.t
-'-ttt
slslem was (onuminatrd
because it included ahe following requirement
"E!€ry btother
shall be obliged to confess t*ice a yeif, or at least once and rt
xi., u t.-lie, tt. t *ains impenitent, he shall be expelled '
I{iom the sondolieri guildl."
a,it"tit;fr and @;". A good srstem is aceeptable and is
p.r,'eirtd ,s lair bu ,ll ParticiPanls Per(ePtion' of faimessdre
i"Oi..,it., ."0 the onlv wa1 lo know nhefier a ssrem is seen
^ i"l. l. ," ask the panicipana l!'e can ask about distribu-
rive iustice, which includes pcrrepdons of the performaneP
evalLiaLion
receired rclatrve (o lhe work perlormed and Per
ceptions of the rewards received relati€ to the elaluauon
reieired, particularly when the s_tstemis imPlemented across
."r"-"..'f- example diflerencesin perreplions.mav be
lound ln (omParing emPlore€sfrom more lnolrlouallsu'
tfor examplc, the United Sates) lo more (ollectivistic (fol
exumot., i.,rea) cullures(Chang& Hahn 2006l ll a dicretr
ancv is perceived between $ork and elaluation or between
"naiuarion and rewards, then the system is likely to be seen as
unfai. In adaition, ,ne can ask about proceduraljustice' which
inrludes per(eptions ol the Prorcdure usrd lo determrne
,'rr. r"J"n'. * tiar as r}re proctdutt' uttd lo linl mtings wirh
i.*ora..
"g....t..
a good system is inherendy discriminatory
*.. l-pf"v..t .ifi'receive Etings that are lower than those
receired by other emPlovee' Howetrr' r'e should stnve (o
a.r.t.,o .ri,"rrr" lhal are reFarded as fair from bo$ drstribu-
tive and proceduraf perspectives becaus€ each ryP€ ol jltstrce
DerceDtion leads to different oulcome' For examPle a ptr_
:;;;;;", fie srsrem is nor lair llom iddisrriburive poinr of
"i.[i. iit fv ," f."a ,o a Poor relationship between emPloyee
"rJ **rvi*. ""a f"*.red satisfaction of the employee with
J. ."ir.^i*t on lhe other hand a percePtioi.thal,the
srs(emis unfarr lrom a plo(edural poinl ol vie$ ls llkely to leao
to decreasrd employei cr,mmitmenl lowwd lhe olganizdtron

35. . Epi.'DEDvrF$ oI Ptr&oRttAcE NIANAG!:MFN'l ]3
and increased intentions to lea.€(Erdorgan, 2002). One rav
!o improve both disEiburive and procedural justice is to set
clear rules that are applied consistentlybv all supenisors.
Inclusiomess.Good ststems include inpur from multiple
sourceson an ongoing basis.Firsr,the evaluation processmust
represent the concerns of all the people rvho will be affected
bv thr urrlcome.(:onsequcnrl'.
emploree mur parti(ipatein
the processof creating the sr4itembv pro,iding input regard-
ing what behaliors or results will be measured and ho*.
Second, input about employee performance should be garh-
ered from the emplovees rhems€h,es before rhe appraisal
meeting (Canley, Keeping, & l-r},, 1998). In shorr, all parrici-
pants musr be given a voice in the processof designing and
implementing the wstem. Such inclusire s,vstems
are likeh
to lead to more successlirlsysrems,including less emplovee
resistance,improved performance, and felrer legal challenges
(Elicker, Levr, & Hall, 2006),
Oy'?zrurs-Good systems have no s€crets. Firsr, perfomance is
eEluated frequendy and performance feedback is protided
on an ongoing basis. Therefore, employees are continually
informed of the qualiry of their perfbmance. Second, the
apprairal meeLingronsistso[ a iwel{?'communi( aLionprocess
during which information is exchanged, not delivered from
the supenisor to the employeewithout his or her inpur. Third,
standardsshould be clear and communicated on an ongoing
basis.Finall,r',
communicarions are facrual,open, and honest.
Caftdabilir. The processof assigningrarings should minimize
subjectire asp€ct$ however, ir is virtually impossible to create a
slslem that is completely objective becausehuman judgment
is an important component of the evaluarion process.fhen
employees p€rceive an error has been made, there should
be a mechanism throueh which rhis error can be corrected.
Establishing an appeals process, rhrough which emplolees
can rhallenge what may be unjus( rle.isions. i dn imporran(
asPectof a good perfornance management system.
Standad;zalint. Good systems are standardized. This means
that performance is eraluated consistendyacrosspeople and
ljme. To achieve this goal, the ongoing rraining of rhe indi-
vidualsin chargeofappraisals.usuallvmanagers.
isa must.

36. 34 Prrromrcrt"texrcwnu
. t nt.art Good systems
comply with ethical standards opera-
*i*tig;*x,*1ffi
trummffi
i:fi,Hi
fi#;;;;;; o'iv p"fo'"""" dimensionsfor which
.iii* *m.i.", mr"rmadon'andtheprivacy
oflh€ employee
i, t .p..,"a 1.f naanStone'& Stone-Romero'
1999)
'
Howdoweknowwheth€rdreperformance
management
system
:i:*#*:;*ill]il:il:,-"f
ff I:ffi,fr
"'1i#!
ni:k;l
*.1;ll*ir',il,T'ff
::T:1";:T
il'H?T,
I;
';;';;;'.;,;;'-.rudingarr
or''
:,1:ffi.:,?'$lU;i
i.:.]:f;
%"J,:J:
ffi:'1ffi
ttH*:sr;t*lit,'*
pilot-tesr provide feedbackon any possi
'ili'lli,"ti;T,il;Iritor-rest
mav
revear
rhar
rhe
srstem
was
nol
n'***.:*:trlilil$h''il1'11
;ll;.'#l
l:"il]
;:
:;;""fis**fil':l':lt
d$i".sil
W.-:l
r:
il:s,ilH'tr
iff:':"ilfl#ffi
#+itt1,rlil*
:i,:;[:'J-::ji1*Liiil?"illllffi
;;:;;;;rJ..i"..*"i
5io."p'"-
u.r."*.
r,: t-o!l:lj:u"ffiXfriT-#f"";
IXH:
particular example,the insruments wo
'"1r1'loli'.'ll**r..-9r._:'jlfl
l*'ffi lr*T'.'.:ll;
ffi"Jilil[*":i':"|i''#J:Ilft
",-i"i;".""J'*'"'i
Ll;*JlLH,:*l;'"$:ff
:H:f"ff fffl:iyJi
!:L:1
l*lL::lir*n;TiT;Tll'ff
ll.e'"?$:iff"*
L ,. .*pr.' tlre United Statesfederalc*"t:1t T::.i:'.".
:rsru
";sl:rmffi
5ffi:tr':.T
J?.fi
;};l

37. i
. [rDrr] 'rr r o] t,] eroRr1..r hNA(,rNr!N| 35
ser€ral lails harc bcen passcd rlral r)andalc fcclerat agcncies lo
developa stratesic plan. a perli)rnrance plan, anrl a pcrfornrancc
reporr..{lthoush rheseinitiaries(oncern aqencies
aDd nor incli
riduals,Lrlrimarehthe perl()rmanceol an agen$ depeDdson
the perlormanceof (he indiriduals$.r:rrkirg
in rhat uDil. The ne(
result ol sLLch
larr'sas the (;.trcrnnlenr I'erlbnn:rnce and Results
Act is an increaseirr ac.ouorabitirar)dlil|rding alto.arjonbascd
on perlbnnancc. Thus. ladcral aecDci€sarc requifcd to ealuare
the rclative efficien. c,f rheif ari(nrs nraDagemcnt re.hnjques,
including pcrformance nranaserneDlsstems.
Ealuation da|a should inclurte reacrionsto rhe vsren aDd
assessmcnts
o{ rhe svsrc t s opcr:ltir)Dal anci re.hnjcal requjre
menrs.For exanrple,a .onfidenrial sune coutd bc adminisicrcd
Io all . rpl,^c,. d.lin{ dL", r I!.rfpri,,r). :rnd:rrrirrrrl-s
.rl,urrr
the svstcnl.This surr$ can bc adminisrcred during the iDirial
stagcsof implemenratiol and then al rhe end of the lil.sr reviet!
c,vcle
to lind our 'hether (here hac beeD anr chanscs. In adcli
tron, regarding the s'srelris resultl. one can assess
pcrf()rmance
ratingsover tilrle k) seervhar positi.e ellccrs the implernenration
ofthe slstemis haring. tinalh, iDterlic$scan bc cond .lcd i{irh
key stakeholdcrs. inclrrding malagers ald emplor.eesrho hale
beeninr'ohcd in decloping ancl irrptcrnenrire (he pertbrDraDce
managements.r'stem
(llarper & 'itkinas, 2(X),-,).
Seieul additional nleasurescan be useclon a regular basisro
monitor and evaluatethc s.stem:
Numba of inttntituals h,alu(k.f. Oft of rhc Dx)sr basic meas
ures is to assessthe n[n]ber of en)pbvccs $ho arc acrualh.
pdI|iripdl"{ in rlrd{r, r. tt p.flo'rndn,( Fat Jriu . lrJ.
not bccn completed for some ernploccs. r|e nccd to flnd
out who thev are and r|lrr a pcrformancc review has not bcen
conlplered.
Dstibution oJpo|rna'r.? ,1rringr.
An iDdica(or of .tnal;rv of rhe
perioruunce asscssments
i trhelhcr all ol. most s.orcs are too
high, roo l()$,o[ clunrpcd around rhe cenlcroft]e disribudm.
This m:rl indicare inrenrioral errors sn.h as lenien(1r selerin!
and ccntl.alrendencil f)istribulior)s of perfonnancc raringscan
be broken do$rr br rrnit and srrpenisor ro derernline r,he{her
anl, ren.ls exisr rcsarding mling disrortion ancl{,hether these

38. 36 PnRroRrANcE {NAGEMT,NT
distortions are localized in Patlicular units Note that there may
be exceDEonaiunil-sin which mo$ emPlovres are outsEnding
DerformeN and units in which most emPlo,veesare poor p€r-
ibrmers. This is the exception to the rule, however' and such
distributions usually indicate inteniional errors on the part of
ratels.
Ouali' ol inlonntion. Atrother indicatol ot qualiiy of $e per-
il.*un.. "*r.*...no is the qualirv ol thr information PrG
vided in the opentnded sectionsol the lorms For example
how mDch did the rater rrrite? What is the relevance of the
examDlesprovided?
o'al;k ot oatornanu di-l..asion n?ating A confidential survey
.]n # ai"ttit rr"a t" ^ll employeeson a regular basisto gather
informatron about how the supewisor is managing the PeF
formance discussion meetings. For example' is the feedback
useful? Has tbe supeftisor made resources atailable so the
employee can accomPlish the development Plan objectives?
Hoir reler'antl,r,as the Peformance reliew drscussion to one's
job? To what degree have development objectives and plans
been discussed?
ir^ *rirlont r. n .ontidential survey could also be distrit}
"J ," "it-* the perceptions of the ststem's users' both
raters and mt€es. Thit ao*ay can include questions about
satisfaction with equiry' us€fulness' and accuracy'
A4rall costngnfil ntio. A fairly simple way to addressthe Per-
ceived overall impact of the system is to ask particiPan6 to
rate the overall c;st/bene6t r:atio for the performance man_
aeemenl svslem.This i a t'?e of boltomline quesuon lnal
cln provide convin<ing evidince for t-heoverall worth of the
""",.-.
.Iittl" perceivei cost/benefit ratio question can be
asked in reference to an individual (emPloyee or manager) '
her iob. and her orqani/ational unil Nole rat lhe Per(eived
.orr7b.n.fit ratio muy n.,t be lhe samr as the aclual (osl/
benefit ratio. However, as is the cas€with most organuatronar
interventions involving people (Farmer & Aguinis' 2005)' per-
ceptions are crucial becaus€they will determine the amount
ofsuppon and resources
to be allocatedto the interventlon
Irni;i rl and oryaniutkn+u?lpPrlomtnta Another indicalor
that the systernii working well isprorided by the mealiurement

39. E h r ) r | ' r r o r I } R l ( ) R n ( L M 1 . . , r { r N r l l
of unir- x d orqanir:rrioD
leel pclfonnan.c. Srrth per.tor.-
nan.. iodicatofs nright be .Lrsronrersarisfa(tiorr
rirh spc-
citic Lrnits
and irr(lic:rrols
ol rhc Iinancialp(r fumaD.e of tLc
rariou unirs or rhe org:rDiTatiur
as a tholc. 'e De(d t() l)e
arLare
that il rnal rake ()rnerime lir thalges in in(lnidual
anclgroup pcrlirrrnancclcrl r() be rrandaredinlo Lrlit an.l
organizrtiorrlevel fcsul15.e shorrlclnor erpccl resnl|i as
s(x)n:rsthc srstemis inrplementcd:horle'er..
1vrhould slarl
Io scc some ransible resullsr! rl)e uDil lclt.l a lerf morrrhs
: r(r the svs(cm
is in plac..
Conclusion
In todavs globalized,{:st pace.t.rnd irterconnccrcti world. i( is
relatileh cts k) f{ain irccessr() lh. cornperirioD s rcchnologl a d
products.
'lhank
r{) rhe Inrernrt a:rctrhc acconrpanrinqhigh
speedof c(DrmLUric:Ltiorls.
lcchnologi.al alld prorhr(r (liffer.en-
tiationis n() longel a k. conrperirirt at]anraeeill nr()srin.tus,
trics.For carnpie, most balks oller rhe sametprs ot prod{rc(
(for examplc.diller.tlr tpes ol ai gsa..()rntlsand ir]crrDrrrr
oppofruni(ies).
Il a particul:rrbanl decidesro offer i ncLt]lod
uctor scr!ice (lbf r.arnple.onlilrc baDking).it {itl rlor bc lo)g
until rhlj competilors(tler prccisehrhe sarJrc
prod .l. Ai,noted
bv.lames Kellc, perlofmarrce manaqcrrenr projccl lrader ar
IdahoPoler: Technolog ij,a lacilirillor,but nol a guaranror,()f
effectilencss
of elli.icncr of a companr's$orkJi).cc (GeDerali g
buzz,
2006).
Organirationswirh mdivalcd and |ale l((l enplovc(s oller
ing outsurrrdingserlice &) . lorners are litclr to pnll tihcr,(l ol
tjlecompetition.ijen il tht prrxiucrsollc|ed are sinrilarro thr)se
oflercd br' (hr conrperilor!.(]Lrsromcr.s
rranl ro ec( tlre righ(
an${erirt rhr right rimc allcl rhev!alr t() receirc rjrcir.pl1rclLrcrs
and serviccspronrplh aDd accLrrateh.
ODh pcople can nrake
thesethiflgs happtn and prtxlLrcea susrainablt competirirc adlan-
tage.Pcrfi)rmance rnan:rgcnrcrrtsilsremare te' ft)ols rhat caDbe
usedto tmnsfb. r people s trleDt aDd nrotilati{m inl(' l traregi.
business
advrnrage. Unlirrrunarelr allhougtr 1)6perccr)t 01 HRt
profcssionals
report thar pcrfirr.nanccrnanagemenr
is their nunr
berone concern, fccr than l2 pcrcenr ol HR erecutics lDCi

40. 38 Prnroxv$tct l'hMctu*n
rechnology managersbelievethat theirorganizdtions hae align(d
:'.nn
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