Beruflich Dokumente
Kultur Dokumente
SHRM Foundations
Effective Practice Guidelines Series
Building a High-Performance
Culture: A Fresh Look at
Performance Management
By Elaine D. Pulakos, Rose A. Mueller-Hanson, Ryan S. OLeary,
and Michael M. Meyrowitz
Sponsored by
Halogen
Building a High-Performance Culture: A Fresh Look
at Performance Management
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15-0187
Table of Contents
iii Foreword
v Acknowledgments
Performance Management
3 Challenging Assumptions
15 Legal Considerations
27 References
Building a High-Performance Culture: A Fresh Look at Performance Management
FOREWORD
Dear Colleague:
Decades of research and practice have been devoted to understanding and improving
performance management in organizations. Yet the traditional performance review process
continues to be painful and ineffective for both managers and employees. In many cases, the
focus on improving formal systems has not achieved the desired results. In fact, research shows
that what truly increases employee performance and engagement is not annual reviews, but the
day-to-day process of managers communicating expectations, providing feedback and leveraging
employee talents.
This new SHRM Foundation report, Building a High-Performance Culture: A Fresh Look at
Performance Management, goes beyond the formal review process to explore how leaders can
create a performance-based culture using strategies such as improved communication and better
relationship skills. Summarizing the latest research and thinking on high-performing workplace
cultures, the report identifies specific tools to develop more effective performance management
behavior in organizations.
The SHRM Foundation created the Effective Practice Guidelines series in 2004 for busy HR
professionals. It can be a challenge for practitioners with limited time to keep up with the latest
research results. By integrating research findings on what works with expert opinion on how to
conduct effective HR practice, this series provides the tools to successfully practice evidence-
based management.
Other recent reports include HRMs Role in Corporate Social and Environmental Sustainability,
Promoting Employee Well-Being and Onboarding New Employees. This report is the 16th in the
series. To ensure the material is research-based, comprehensive and practical, the reports are
written by subject-matter experts and then reviewed by both academics and practitioners. Each
report also includes a Suggested Readings section as a convenient reference tool. All reports
are available online for complimentary download at www.shrmfoundation.org.
The Effective Practice Guidelines series is just one way the SHRM Foundation supports lifelong
learning for HR professionals. In addition to creating educational resources used in hundreds of
classrooms worldwide, the SHRM Foundation is a major funder of original, rigorous HR research.
We award more than $150,000 annually in education and certification scholarships to SHRM
members. And all this good work is made possible by the generous support of donors like you.
I encourage you to learn more. Please visit www.shrmfoundation.org to find out how you can
support the SHRM Foundation.
ACKNOWLEDGMENTS
The SHRM Foundation is grateful for the assistance of the following individuals in producing
this report:
REVIEWERS
Robert Cardy, Ph.D.
Chair, Department of Management
College of Business
University of Texas at San Antonio
Major funding for the Effective Practice Guidelines series is provided by the
HR Certification Institute and the Society for Human Resource Management.
v
Building a High-Performance Culture: A Fresh Look at Performance Management
As vice president of PDRIs Systems and Information Technology Services division, Mike Meyrowitz
provides business, technical and strategic leadership to PDRI. Under his leadership, the IT Services
division provides integrated information technology solutions, systems and services in all areas of
human capital management, including performance management. Mr. Meyrowitz has over 15 years
of experience in the management, design and development of information systems supporting
the missions of commercial, nonprofit and government organizations. He has worked with federal
government clients such as civilian and Department of Defense agencies, as well as the intelligence
community. Prior to joining PDRI, Mr. Meyrowitz directed Lockheed Martins Internet Applications
division. Mr. Meyrowitz holds a Master of Science in information technology and a Bachelor of Science
in business from Virginia Tech. Mr. Meyrowitz also serves on PDRIs Board of Directors.
Dr. Ryan OLeary is manager of hiring assessment services at PDRI, an SHL Company, where he
leads a team of consultants developing performance management and selection and assessment
programs. He has developed performance management systems for numerous federal government
agencies covering a range of scientific, technical and administrative occupations. Dr. OLeary
has presented his work at numerous national conferences and has published on performance
management and assessment best practices. He was named a 2011 Game Changer by Workforce
Management magazine. Dr. OLeary holds a doctorate in industrial/organizational psychology from
Auburn University and a Bachelor of Science in psychology from Emory University.
Elaine D. Pulakos is president of PDRI, an SHL Company, and past president of the Society for
Industrial and Organizational Psychology. A Fellow of the American Psychological Association and
the Society for Industrial and Organizational Psychology (SIOP), she is a recognized author and
speaker, having published numerous articles, books and best practice guidelines on various talent
management topics, most notably performance management and hiring. Dr. Pulakos earned
SIOPs 2009 Distinguished Professional Contributions Award for career achievement. She
has spent her career consulting with public and private sector organizations to improve their
talent management practices by designing, developing and successfully implementing large-
scale hiring, career development, performance management and leadership development
systems in organizations. She received her doctorate in industrial/organizational psychology
from Michigan State University.
vii
Performance management is the Achilles heel of human capital management
often viewed as ineffective by employees and managers alike. Despite the time,
effort and resources devoted to it, performance management rarely achieves its
intended purposeimproving performance.
Building a High-Performance Culture: A Fresh Look at Performance Management
BUILDING A HIGH-PERFORMANCE
CULTURE: A FRESH LOOK AT
PERFORMANCE MANAGEMENT
1
Building a High-Performance Culture: A Fresh Look at Performance Management
Given the current negative to achieve the desired results. It In the end though, these attempts to
perceptions, should organizations will first examine what has been improve performance management
continue to invest in performance tried unsuccessfully in the past have ended up reducing it to an
management? The answer to this and will then present different administrative drill that lacks real value.3
question is yes! strategies that hold real promise for Unfortunately, negative attitudes among
increasing performance management managers and employees toward their
When done right, performance
effectiveness. Finally, it will present performance management systems have
management yields higher levels
a model to help organizations build spawned the vicious cycle of attempting
of engagement, retention and
a high-performance culture through improvements, followed by disappointing
organizational performance. A strong
effective performance management. results, leading to continuous reinvention
business case exists for improving
of these systems. The great amount
the effectiveness of performance
of research that has been devoted to
management, but how is this task Common Strategies performance management without
accomplished? The key is to change and Why They Fail yielding success speaks volumes about
the focus. Concentrate on establishing
how inherently difficult it is.
effective performance management Most performance management
behaviors first, and then make sure strategies focus on developing Figure 2 graphically demonstrates a
that the performance management improved rating tools and processes common pitfall: Although performance
system reinforces and supports those including various rating formats, management processes are designed to
behaviors. Performance management different rating criteria, more drive effective behavior, they more often
must be more than a formal appraisal elaborate process steps and using end up motivating intermittent spurts of
system: It should be an everyday part raters with disparate points of view. activity, spiking a few times a year.
of a high-performance culture. An implicit assumption is that specific
tools and carefully prescribed steps in This pattern is actually at odds with
This report will offer new ideas for a formal system will lead to effective effective performance management
using performance management performance management. (see Figure 3), which requires regular
tools and concepts more productively and ongoing activity:
2
Building a High-Performance Culture: A Fresh Look at Performance Management
Low
Low
3
Building a High-Performance Culture: A Fresh Look at Performance Management
4
Building a High-Performance Culture: A Fresh Look at Performance Management
5
Building a High-Performance Culture: A Fresh Look at Performance Management
Benefits for
Benefits for Managers
Employees
6
Building a High-Performance Culture: A Fresh Look at Performance Management
unpredictable, is frequently more circumstances under which each have argued that formal review
challenging.13 Further, some jobs tends to work best. The idea is that a sessions should simply be eliminated.18
in fields such as R&D do not lend combination and balance of different Sitting down only once or twice a year
themselves to goal setting at all, types of expectations will likely be for a perfunctory feedback review
because predicting when and what needed at different times during the is not enough, especially for todays
discoveries will occur is impossible.14 rating period, based on the specific younger career-minded workers. Both
So goal setting processes overall are demands of each employees job. technology and the growing number of
fairly disappointing. Goals often read Millennials entering the workforce are
Regarding feedback, most formal
more like generic task statements driving demand for more meaningful
performance management systems
rather than SMART goals, and their feedback and development strategies.
mandate midyear and year-end
difficulty varies so greatly even within But it is not just young Millennials; high
reviews to provide feedback on what
a given job or level that employees performers also tend to seek regular
has occurred during the rating period.
raise concerns about fairness.15 feedback, regardless of their age.19
During these meetings, managers
Most work situations evolve and discuss their evaluations and the To be effective, feedback needs to
change over time, some significantly. rationales for them with employees.16 be provided regularly when it makes
Therefore, effective performance sense to do so, not only once or
A great deal of worry accompanies
management behavior requires twice a year during formal reviews.
formal performance reviews for
setting ongoing expectations Unfortunately, many managers are
both managers and employees. In
and near-term goals as situations not skilled at providing feedback.
a recent survey, over 50 percent
change. This point raises questions They frequently avoid giving feedback
of respondents reported that they
about the utility of formal goal because they do not know how to
believe performance reviews do not
setting processes conducted at the deliver it productively and in ways
provide accurate appraisals of their
beginning of the rating period, which that will minimize defensive reactions.
work, and nearly 25 percent said
are incorporated into most of todays Even when managers do provide
they dread performance reviews
performance management systems. feedback, it is often superficial and of
more than anything else.17 These
Managers also have an important little value.
results are not surprising in light of
ongoing role in goal setting that is not
a 2008 Mercer survey of 350 major Research has consistently
captured well in most formal systems;
U.S. companies, in which almost 25 shown the importance of regular
they help employees translate
percent of respondents revealed that feedback for effective performance
higher-level objectives into more
their managers are only marginally management, 20 future performance 21
specific plans, activities, milestones
skilled at doing performance and job attitudes. 22 Informal,
and interim deliverables that they will
evaluations, and only 12 percent continuous feedback is the most
accomplish day-to-day.
indicated that their managers were valuable type. 23 If feedback is
The table above shows different highly skilled. provided immediately following
types of expectations a manager can good or poor performance, it helps
Poor attitudes toward performance
establish with employeesbehavioral employees make real-time alterations
reviews have led to calls for
standards, objective results and in their behavior and enables them to
improvements that will better motivate
task or project goalsand the perform their work more efficiently. 24
and develop employees, and some
8
Building a High-Performance Culture: A Fresh Look at Performance Management
Formal Informal
Feedback Feedback
Products and services met expectations, were complete, well
11
Building a High-Performance Culture: A Fresh Look at Performance Management
Menu of Google, not only evaluate manager as perceptions about the value of
Environmental Reinforcers effectiveness but also provide coaches performance management.
for those who need additional support.
At a glance aids. In turn, managers should periodically
check in with employees, assessing Old Thinking Versus
Automated tools that drive and discussing how well they are New Thinking
feedback and development engaging in the process.
embedded in enterprise While some have suggested that
systems. Building a performance management performance management is so
culture is not something that will broken that formal processes should
Attention-grabbing messaging
be eliminated entirely, this is not
happen overnight. Rather, it can take
pushed out via automated considerable time, even years, for necessary. Rather, substantial changes
systems. should be made to redirect current
enculturation of sustainable change.
Performance management performance management systems
What will help drive a high- and approaches so they focus on
hotlines and coaches. performance culture are ongoing reinforcing the critical behaviorsfor
Social networking tools and evaluation, feedback and improvement both managers and employeesthat
supports to share experiences of the system as a whole. Pulse ensure performance management
and lessons learned. surveys directed to individual success. Having formal processes
managers can be aggregated so in place also provides a valuable
that metrics can be tracked at an safety net to ensure that at least
A final strategy to reinforce effective enterprise level. Reporting these some performance information is
behavior is to create communities of results should further motivate the communicated to those employees
interest or practice, in which members frequency and effectiveness of with poor managers who may
can exchange information, experiences the leadership behaviors we have
otherwise neglect their performance
and lessons learned to help each been discussing. In addition, we management responsibilities.
other. Performance management recommend evaluating the extent
portals, blogs, forums or collaboration to which the new performance The table on the next page
tools can easily be made available to management practices are affecting summarizes key differences between
facilitate this. bottom-line business results as well the traditional old approach and
the new approach discussed in
STEP 4: MONITOR AND IMPROVE
Figure 12. Sample Evaluation Metrics
Hold Leaders Accountable for
Continuous Improvement
To drive enculturation of performance
management behavior, short pulse
surveys are useful for collecting Business results
feedback about the extent to (decreased turnover,
which employees believe that their improved outcomes)
managers are providing them with
growth opportunities on the job,
setting expectations that make Behavior change from
performance requirements clear and existing state (pulse
providing effective feedback that surveys/360s)
helps them develop. Providing the
results of these surveys to managers
drives accountability and helps guide
behavior adjustments. Employee and leader views
(surveys, focus groups)
Organizations serious about building
high-performance cultures, like
14
Building a High-Performance Culture: A Fresh Look at Performance Management
Goals SMART goals at the beginning of the cycle Ongoing expectations as work evolves
Feedback Once or twice a year; perfunctory and Regular discussions embedded in work
dreaded
Performance Ratings Detailed to support decisions, often Simplified; small number of factors
cumbersome and low value defined by standards
Training For managers on formal system For managers and employees on day-to-
requirements day behavior
this report, namely focusing on Zappos 10 core values, such as Performance Management
encouraging significant, ongoing delivering Wow service or showing at Zappos
performance management behavior. humility.
Driving this behavior is not simple. Managers provide regular
To drive feedback, Zappos directs
But it can be accomplished by feedback on and examples
managers to provide employees with
implementing infrastructure, training, of behaviors exhibited by
status reports on their performance
tools and environmental supports employees who embody core
for informational purposes only, such
aimed at changing attitudes and values.
as the percentage of time spent on
developing effective behaviors,
the telephone with customers. The Purpose of tool is to help
like those identified in the Google
frequency of the reports is decided employees understand how
research.
by the manager. Managers no they are perceived.
An example of a company that longer make ratings on a five-point
has implemented a performance unsatisfactory to outstanding scale,
Not used for reward or
management process aligned but instead indicate how many times disciplinary purposes.
with the New Thinking model is they notice employees exhibiting ree classes offered to
F
Zappos. By replacing its traditional specific behaviors that represent the employees on improving
performance management 10 core values, with documented behavior that reflects core
process in favor of one based examples of what the employee values.
on continual feedback and self- actually did. These assessments
improvement, Zappos is reinforcing are not used for promotion, pay or
the development of more effective disciplinary purposes. Rather, their Beyond Zappos, several other
behavior. Rather than being rated and purpose is simply to provide feedback companiesincluding Google and
given feedback once yearly as part of on how employees are perceived by Appleare experimenting with
a formal review process, employees others. If an employee scores low performance management practices
are given regular feedback on the in an area, free on-site courses are that drive effective leadership
extent to which they demonstrate offered to help the employee improve. behavior as their key strategy. 32
15
Building a High-Performance Culture: A Fresh Look at Performance Management
Legal Considerations the organizations performance well against the guidelines from case
management process. In fact, many law cited here. As we have discussed,
Organizations must be knowledgeable of the ideas presented here should documentation often does not match
about professional33 and legal enhance defensibility, especially in ratings or rewards, managers often
guidelines, 34 including relevant case the areas of setting expectations and avoid providing feedback, and the
law in any given country, pertinent providing feedback. Furthermore, expectation-setting process is often
to the design and implementation of as we discussed previously, when formalized at the beginning of the rating
performance management systems. managers and employees have period but then inconsistently managed
Following these guidelines will enhance effective relationships characterized and largely forgotten during the year.
the defensibility of a system in the by trust, employees perceive higher For these reasons, organizations have
face of a legal challenge. 35 Although levels of procedural justice and feel implemented and will need to retain
an in-depth discussion of legal issues that they are more fairly treated. their formal performance opportunity
and requirements is beyond the scope Employees who believe they have programs, in which employees are put
of what is covered here, guidelines been treated equitably are the best on notice about their performance when
relevant to performance management defense against legal actions because significant issues arisebecause it is
systems based on U.S. case law are they do not tend to initiate or become primarily through these systems that
presented in the sidebar below. involved in legal challenges. 36 appropriate feedback is provided and
It is noteworthy that none of the documentation is created that complies
Many of todays formal performance
recommendations made in this report with the guidelines outlined above.
management systems would not fare
will undermine the defensibility of
16
Building a High-Performance Culture: A Fresh Look at Performance Management
17
One way to begin to shift mindsets is to remind people that they engage in
performance management behavior every daywith their children, spouses, co-
workers, friends and vendors. Once people make this connection, they can better
grasp the meaning of performance management in the workplace.
Building a High-Performance Culture: A Fresh Look at Performance Management
SOURCES AND
SUGGESTED READINGS
19
Building a High-Performance Culture: A Fresh Look at Performance Management
evaluation, and feedback. The author are shown to be consistently useful in the way that matters for high
also addresses important issues in for producing effective interviews: performance and retention? What
performance management that are a supervisors knowledge of the is the business case for (or against)
often overlooked, such as incorporating subordinates job performance, a allocating scarce resources to drive
strategy and values into performance supervisors support of the subordinate employee engagement? Of the many
criteria and dealing with emotions and a supervisors welcoming of things that impact engagement,
that can accompany performance the subordinates participation. The what are the handful of strategies I
feedback. Each chapter begins with impacts of the functioning, frequency should prioritize to maximize returns
a discussion of a specific concept, and format of the interview, as well on engagement investments? A
followed by a variety of skill-building as the presence of goal setting and study was conducted with 50,000
exercises that provide a rich resource subordinate participation, are shown to employees in 59 organizations
for HR professionals, students, faculty, depend on the characteristics of the and 27 countries. Using advanced
workshop instructors and trainers. employee and job. modeling analyses, several strategies
were identified as most effective for
Cawley, B. D., Keeping, L. M., & Center for Creative Leadership, increasing employee engagement
Levy, P. E. (1998). Participation Kirkland, K., & Manoogian, S. and, ultimately, performance and
in the performance appraisal (2007). Ongoing feedback: How to retention. Particular attention is paid
process and employee reactions: get it, how to use it. San Francisco: to strategies that scale to reach
A meta-analytic review of field Pfeiffer. hundreds or even thousands of
investigations. Journal of Applied employees at the same time, driving
Formal feedback experiences and performance and retention through
Psychology, 83(4), 615-633.
career transitions involve both acquiring employee engagement.
The relationship between participation new skills and honing current ones.
in the performance appraisal process Critical to this is measuring progress. Culbert, S. A., & Rout, L. (2010).
and various employee reactions is This guidebook provides a proven Get rid of the performance
explored by examining 27 research technique on how to elicit feedback review!: How companies can stop
studies. There is a strong relationship and use it to effect change. Tips on intimidating, start managingand
between participation in performance how to evaluate feedback and what to
focus on what really matters. New
appraisal and employee reactions. do if the decision is made not to use it
York: Business Plus.
Various ways of conceptualizing are also provided.
participation and employee reactions This book points out profound
Corporate Leadership Council. problems with typical performance
are discussed and analyzed. Overall,
appraisal participation is found to be
(2004). Driving employee reviews in organizations and the
most strongly related to satisfaction. performance and retention through performance management process in
Value-expressive participation engagement: A quantitative analysis general. Strategies are suggested that
(i.e., participation for the sake of of the effectiveness of employee will enable managers and employees
having ones voice heard) has a engagement strategies. (Catalog to gain more value from performance
stronger relationship with most of the No. CLC12PV0PD). Washington, management processes.
reaction measures than instrumental DC: Corporate Executive Board.
participation (i.e., participation for the
Daniels, A. C. (2000). Bringing out
purpose of influencing the end result).This study examines two imperatives the best in people: How to apply
The results are discussed as they that place significant pressure on the astonishing power of positive
senior HR executives: achieving
relate to organizational justice issues. reinforcement. New York: McGraw-
increasingly higher levels of employee Hill.
Cederblom, D. (1982). The performance while retaining the
performance appraisal interview: A organizations top-tier and core This book argues that the key to
review, implications, and suggestions. performers. It was hypothesized managing effectively has always
that these outcomes are driven by remained the samecreate positive
Academy of Management Review,
employee engagement, and the consequences for workers when they
7(2), 219-227.
study sought to address several exhibit behaviors you wish to increase,
Research on the performance appraisal questions: How engaged is my and undesirable consequences for
interview is reviewed. Three factors workforce today, and is it engaged behaviors you wish to decrease.
20
Building a High-Performance Culture: A Fresh Look at Performance Management
Focusing on the concept of positive This book serves as a useful tool Gebelein, S. H., Nelson-Neuhaus,
reinforcement, the book describes for any manager who wishes to K. J., Skube, C. J., Lee, D. G.,
how to define reinforcers that improve performance throughout Stevens, L. A., Hellervik, L. W., &
work and to tailor them to meet an organization. It presents a Davis, B. L. (2010). Successful
individual employees needs; how to systems approach to performance managers handbook. Atlanta, GA:
set fair performance expectations enhancement and includes tools for
PreVisor, Inc.
and implement and maintain them determining current performance
with minimal cost and effort; and levels and establishing desired The Successful Managers Handbook
how to provide constant feedback performance levels. Specific is a trusted resource for organizations
and reinforcementso employees guidance is provided on 1) analyzing around the world, with more than
always know exactly how to improve the performance of individual 1,000,000 leaders having relied on
performance when they have employees, 2) pinpointing gaps in the book since it was first published
achieved it. Simply by discovering performance and determining what in 1984. It provides practical, easy-
what reinforces each person, the is causing those gaps, 3) developing to-use tips, on-the-job activities,
author argues, any organization practical strategies for maximizing and suggestions for improving skills
can attain the kind of individual performance, 4) getting the most and effectiveness, no matter what
performance that adds up to from training dollars and ensuring the economic environment. This
effective organizational performance. that training is successful, 5) giving 700-page ready reference guide
Performance management case recognition for an employees helps managers understand key
studies from 3M, Xerox, ConAgra and achievements, and 6) evaluating performance expectations and
other major firms are presented. whether or not employees are using coach others, find effective ideas for
what they have learned. management challenges, develop
DeNisi, A. S., & Kluger, A. N. skills to become more effective as
(2000). Feedback effectiveness: Fitzwater, T. L. (1998). The managers leaders, and create realistic action
Can 360-degree appraisals be pocket guide to documenting steps for personal development plans.
improved? Academy of Management employee performance. Amherst, MA:
Executive, 14(1), 129-139. HRD Press. Gilliland, S. W., & Langdon, J. C.
(1998). Creating performance
This article discusses performance This step-by-step guide provides management systems that promote
feedback, an important part of help on documenting and changing
perceptions of fairness. In J. W.
many organizational interventions. unwanted work behaviors before they
Smither (Ed.) Performance appraisal:
The authors note that managers become issues leading to termination.
It presents information on the legal State of the art in practice. San
typically assume that providing
employees with feedback about their framework surrounding discipline and Francisco: Jossey-Bass.
on specific measures for accurate
performance makes it more likely that The authors of this chapter describe
job performance will be improved. performance documentation that three aspects of fairness: procedural
Despite the prevalence of feedback will help protect against discharge fairness (the fairness of procedures
mechanisms in management litigation. The book includes a four- used to arrive at outcomes),
interventions, however, feedback is step progressive discipline process interpersonal fairness (the fairness
not always as effective as assumed. and how to apply it, including how to of interpersonal treatment and
In this article, specific conditions1) clarify gaps in execution versus communication), and outcome fairness
under which feedback might be gaps in knowledge, 2) promote (the fairness of the decision and of
less successful, or even harmful, self-discipline through PEPs outcomes such as pay associated with
are presented. The implications of (Performance Enhancement Plans), the decision). They review research
the results and model for designing 3) clarify position expectations showing that employees perceptions
of interventions aimed at improving to meet expected deliverables, of appraisal fairness are related to
performance are discussed. 4) employ behavior modification acceptance of evaluations, satisfaction
through corrective rather than with the process, (modest) changes in
Fisher, S. G. (1997). The managers punitive action, 5) develop a coaching
performance, trust in the supervisor,
pocket guide to performance leadership style, 6) isolate factors organizational commitment and
management. Amherst, MA: HRD for improvement, and 7) document intention to stay with the organization.
Press. performance issues. The authors provide specific
21
Building a High-Performance Culture: A Fresh Look at Performance Management
recommendations and organizational Ilgen, D. R., Fisher, C. D., & Taylor, This book is modeled after Eighty-
examples that illustrate how to increase S. M. (1979). Consequences of Eight Assignments for Development
fairness in each of the three aspects individual feedback on behavior in in Place, one of CCLs most popular
of the performance appraisal process: organizations. Journal of Applied publications. In the years since that
system development (creating appraisal Psychology, 64(4), 349-371. report was published, more has
instruments, communicating objectives), been learned about development in
appraisal (observing and evaluating The literature on feedback to individuals placefrom research, from working
performance, making reward decisions), has previously been reviewed with with managers and organizations
and providing feedback (communication respect to its effect on the behavior that make use of developmental
of ratings and rewards). of individuals in performance- assignments, and from colleagues
oriented organizations. Although in the field. This book consolidates
Government Accountability Office. contemporary views of individual this knowledge into one tool to
(2008). Human Capital: DOD behavior in organizations stress that help leaders add developmental
needs to improve implementation feedback is necessary for effective role assignments to their own jobs and to
of and address employee concerns performance, little attention is given to help others do the same by including
about its National Security the psychological processes affected tables in the book that are full of
Personnel System (GAO-08-733). by it. This review focuses on the development assignments.
Washington, DC: Author. multidimensional nature of feedback as
a stimulus and addresses the process Lee, J., Havighurst, L. C., & Rassel,
The report summarizes the results of a by which feedback influences behavior. G. (2004). Factors related to
GAO evaluation of the implementation Emphasis is placed on those aspects court references to performance
of the Department of Defenses of feedback that influence 1) the way appraisal fairness and validity.
(DODs) National Security Personnel it is perceived, 2) its acceptance by the Public Personnel Management, 33
System (NSPS), a human capital recipient and 3) the willingness of the (1), 61-78.
system for managing civilian personnel recipient to respond to the feedback.
performance. Congress asked the In this study, the authors test whether
GAO to determine 1) the extent to Kahn, S. C., Brown, B. B., & appellate court judges concern for
which the DOD had implemented Lanzarone, M. (1996). Legal guide performance appraisal validity or
internal safeguards to ensure the to human resources. Boston: fairness depends on their ideology
fairness, effectiveness and credibility Warren, Gorham & Lamont, 6-2 to (liberal or conservative) and type of
of NSPS, and (2) how DOD civilian 6-58. charge (gender or age discrimination).
personnel perceived NSPS and what They examined 39 cases between
actions the DOD had taken to address Written by practicing experts, this guide 1992 and 2000 and found some
these perceptions. Based on the reports on the continually changing impact of both ideology and type of
GAOs work evaluating performance laws that affect human resources. charge. Appendix A contains a listing
management in the public sector Broad in scope, this comprehensive of all the cases; appendix B contains
and on the DODs challenges in volume provides guidance on current a glossary of validity terms to classify
implementing NSPS, as well as reviews issues, such as sexual harassment, cases; and appendix C contains a
of relevant documents, employee discrimination, employment at will, glossary of fairness terms to classify
survey results, interviews with officials, privacy, employer and union unfair cases. The paper also includes an
and focus groups with employees labor practices, collective bargaining, extensive list of references.
and supervisors at 12 selected compensation and benefits, retirement,
installations, a list of safeguards that and other benefits laws. An appendix Lombardo, M. M., & Eichinger, R. W.
NSPS should include to ensure its is provided that includes state (1989). Eighty-eight assignments
fairness, effectiveness and credibility employment laws and a table of cases. for development in place.
was developed. The list included using Greensboro, NC: CCL Press.
McCauley, C. D. (2006).
a third party to analyze rating results
Developmental assignments: The Center for Creative Leaderships
for anomalies, publishing final rating
Creating learning experiences continuing studies of executives
distributions to improve transparency
have found that learning on the
and developing action plans to improve without changing jobs.
Greensboro, NC: CCL Press. job is the best way for a person to
negative employee perceptions.
develop. Often people are given new
22
Building a High-Performance Culture: A Fresh Look at Performance Management
positions in order to provide them with appraisal (e.g., layoffs, promotions, my organization is as good as or
developmental experiences. But what discharges, merit pay) that attract better than the security offered by
if such a transfer is not possible? This a significant amount of legal other organizations in our geographic
report contains 88 assignments that attention. A sample of cases was area. Although just half the workers
can be added to a current job, offering used to demonstrate prudent, and (49 percent) said they believe their
individual developmental opportunities. not so prudent, use of the results organization is well managed, that
of performance appraisal as they figure is significantly higher than the
Longenecker, C. O., Sims, H. P., relate to discrimination issues under 40 percent reported three years ago.
Jr., & Gioia, D. A. (1987). Behind Title VII of the Civil Rights Act of
the mask: The politics of employee 1964, the Age Discrimination in Murphy, K. R., & Cleveland, J. N.
appraisal. Academy of Management Employment Act, the Equal Pay Act (1995). Understanding performance
Executive, 1(3), 183-193. and other closely allied statutes. The appraisal: Social, organizational,
authors conclude that evaluations and goal-based perspectives.
While management books and of performance should be based Thousand Oaks, CA: Sage.
manuals claim employee appraisal is on the results of performance
an objective, rational and accurate appraisal processes that incorporate This book examines the performance
process, there is extensive evidence organizational justice and fairness. appraisal process from a social-
to indicate that executives deliberately psychological perspective,
distort and manipulate the appraisal Mercer Human Resource emphasizing the goals pursued by
process for political purposes. Consulting. (2005). Whats raters, by employees being rated and
In-depth interviews with 60 upper- working survey. New York: Author. by the various users of performance
management executives revealed appraisal. The authors apply this goal-
that their first concern is not the The 2005 Whats Working Survey, oriented perspective to developing,
accuracy of the appraisal, but how to conducted by Mercer Human implementing and evaluating
make use of the review process to Resource Consulting, reflects the performance appraisal systems. This
reward and motivate their employees. thinking of a representative sample of perspective also emphasizes the
The executives generally felt that workers employed by more than 800 context in which appraisal occurs
this focus was appropriate. Factors organizations across the U.S. The and shows that the shortcomings
affecting the appraisal process survey is part of Mercers ongoing of performance appraisal are
include the economic health and effort to capture contemporary sensible adaptations to its various
growth potential of the organization, perceptions of work and to develop requirements, pressures and demands.
the executives personal belief scientific norms that employers Relevant research is summarized,
system, the degree of communication can use as they design, implement and recommendations are offered for
and trust between executives and and communicate their human future research and applications.
subordinates, and the appraisers level resource strategies and programs.
in the organizational hierarchy. Other The first edition of the survey Partnership for Public Service.
results reveal that 1) executives in was conducted in 2002. Mercers (2007). The best places to
large corporations are political actors 2005 research revealed signs of work in the federal government.
who try to avoid unnecessary conflict, enhanced employee commitment Retrieved July 29, 2010, from http://
and that 2) executives will try to and confidence compared to 2002. bestplacestowork.org/BPTW/about.
make use of the existing bureaucratic For example, nearly two-thirds of the
procedures for their own benefit. workers surveyed (64 percent) felt a Designed to help a broad audience
strong sense of commitment to their of job seekers, researchers, federal
Martin, D. C., Bartol, K. M., & organization, up from 58 percent in employees and government leaders,
Kehoe, P. E. (2000). The legal 2002. More than 7 in 10 (73 percent) the Best Places to Work in the Federal
ramifications of performance workers said they are confident their Government rankings draw on
appraisal: The growing organization will be successful in responses from more than 263,000
the future, compared to 63 percent civil servants to produce detailed
significance. Public Personnel
in 2002. Some 65 percent (up from rankings of employee satisfaction
Management, 29(3), 379-406.
59 percent in 2002) agreed that and commitment across 290 federal
The article provides information the level of job security offered by agencies and subcomponents.
concerning outcomes of performance Agencies and subcomponents are
23
Building a High-Performance Culture: A Fresh Look at Performance Management
ranked according to a Best Places to Over the decades there have been that represent intractable problems
Work index score, which measures many debates about the best format that have plagued performance
overall employee satisfaction, for rating scales and components for management systems almost from
an important part of employee performance management systems. their inception. While no quick fix is
engagement and, ultimately, a driver of This book discusses the more salient offered, a thorough understanding of
organizational performance. The Best arguments on these matters and these issues and their implications
Places to Work score is calculated provides practical implementation is the first step toward mitigating
for both the organization as a whole advice, tools and actions to avoid them. The top challenges faced by
and specific demographic groups. In in implementing performance U.S. organizations include viewing
addition to this employee satisfaction management systems. It describes performance management as an
rating, agencies and subcomponents a comprehensive performance administrative burden rather than a
are scored in 10 workplace categories, management process that begins with strategic business tool, the reluctance
including effective leadership, specifying organizational objectives of managers and employees to
employee skills/mission match, pay and then moves down through each engage in candid performance
and work/life balance. level, rating employees on job-relevant discussions, and judgment and
factors and effectively developing time factors that impede effective
Peterson, D. B., & Hicks, M. staff. The primary audience is not appraisal. Implications of these
D. (1996). Leader as coach: psychologists but rather human challenges are discussed.
Strategies for coaching and resource staff and the managers
developing others. Minneapolis, who are responsible for developing, Pulakos, E. D., & OLeary, R. S.
MN: PDI. implementing and defending a (2010). Defining and measuring
performance management system. results of workplace behavior.
This is a straightforward, practical It also provides useful information In J. L. Farr & N. Tippins (Eds.),
book intended to help lead people for those who oversee training on its The handbook of employee
and organizations to greater success. application. selection (pp. 513-529). New York:
The tips and practices are designed
Psychology Press.
to sharpen coaching skills so that Pulakos, E. D., Mueller-Hanson,
readers can attract and retain the R. A., & OLeary, R. S. (2008). This chapter discusses how to
talent needed for success, foster Performance management in the define and measure performance
growth in others, provide effectiveUnited States. In A. Varma, P. results in organizations. Some of the
feedback, orchestrate learning topics discussed include cascading
S. Budhwar, & A. DeNisi (Eds.),
opportunities and groom high- goals, SMART goals, performance
Performance management systems
potential performers. accomplishments, and defining
around the globe (pp. 97-114).
performance objectives, among
Pulakos, E. D. (2004). Performance London: Routledge.
others. The circumstances under
management: A roadmap for which these types of performance
Although there is enormous variety
developing, implementing in the performance management measures work best, as well as their
and evaluating performance systems used in the U.S., this limitations, are discussed.
management systems. Alexandria, chapter discusses key factors and
VA: SHRM Foundation. challenges that impact the vast
Pulakos, E. D, & OLeary, R.
majority of these systems. Three S. (2011). Why is performance
This report describes practice management broken? Industrial
key factors have had a particular
guidelines for developing formal
impact: a focus on results, automation and Organizational Psychology,
performance management systems and
and the legal environment. While 4(2), 146-164.
is the precursor to the present report.
these factors are neither positive
While extensive research and practice
Pulakos, E. D. (2010). Performance nor negative, they represent major have focused on understanding and
management: A new approach for trends with significant implications
improving performance management
driving business results. Oxford, for performance management design
systems in organizations, the
UK: Wiley-Blackwell. and implementation. In contrast, the
formula for effective performance
chapter also discusses key challenges
24
Building a High-Performance Culture: A Fresh Look at Performance Management
management remains elusive. This Rodgers, R., Hunter, J. E., & Weatherly, L. A. (2004).
article proposes that a significant part Rogers, D. L. (1993). Influence of Performance management: Getting
of the problem is that performance top management commitment on it right from the start. Alexandria,
management has been reduced management program success. VA: Society for Human Resource
to prescribed steps within formal Journal of Applied Psychology, Management.
administrative systems that are
78(1), 151-155.
disconnected from the day-to-day This paper recognizes that establishing
activities that determine performance The literature on many different types a performance management system
management effectiveness. of management programs reports that in an organization is a significant
The authors further argue that effective program installations depend undertaking. HR practice leaders have
interventions to improve performance on the level of top management grappled with this issue for decades,
management should cease their commitment: the stronger the and academic and professional
exclusive focus on reinventing commitment, the greater the potential journals contain a plethora of ideas
formal system features. While well- for program success. A meta-analysis and approaches on this subject too
developed tools and systems can of 18 studies that evaluated the numerous to count. While no one-
facilitate performance management, impact of management by objectives size-fits-all solution exists for all
these alone do not yield effective was presented to test this hypothesis. organizations, and each must find its
performance management. Rather Results showed a significant own niche in the marketplace, this
than make further changes to formal gain in job satisfaction when top paper argues that there are certain
performance management systems, management had high commitment fundamental criteria in developing
more attention to improving manager- to program implementation. Little performance management systems
employee communication and aspects improvement was found in studies that apply equally across organizations.
of the manager-employee relationship that had moderate or low commitment These critical success factors are
are likely to hold more promise for from top management. presented and discussed.
improving performance management
processes in organizations. Smither, J. W. (Ed.) (1998). Werner, J. M., & Bolino, M. C.
Performance appraisal: State of (1997). Explaining U.S. courts
Pyrillis, R. (2011). Is your the art in practice. San Francisco: of appeals decisions involving
performance review Jossey-Bass. performance appraisal: Accuracy,
underperforming? Workforce fairness, and validation. Personnel
Management. Retrieved from www. This edited book is part of the Society
Psychology, 50(1), 1-24.
for Industrial and Organizational
workforce.com/article/20110505/
Psychologys Practice Series. It This paper examines circuit court
NEWS02/305059995.
contains chapters that bridge the gap decisions relevant to performance
This article discusses the between research on performance appraisal between 1980 and 1995
ineffectiveness of the yearly appraisal and practice, offering and shows that these decisions were
performance review, providing survey a comprehensive, practitioner- explained by use of job analysis,
results from a variety of sources oriented guide to best practices in provision of written instructions,
that substantiate the authors performance appraisal. Addressing employee review of results and
assertion. The article further presents an issue vital to all organizations, it agreement among raters. However,
specific examples of companies introduces readers to cutting-edge appraisal frequency and type (traits
that have implemented performance thought and theories in the area versus behaviors or results) were
management practices that deviate of performance management. In unrelated to judicial decision. Of
from formal processes in lieu of more addition, it provides nuts-and-bolts other factors examined (e.g., type of
informal practices that reinforce guidance to a broad spectrum of discrimination claim, statutory basis,
ongoing feedback and employee issues such as legality, fairness, team class action status, year of decision,
development. The article argues settings and incentive programs. circuit court, type of organization,
that the heart of performance purpose of appraisal, evaluator
management lies in effective race and sex), only the circuit court
leadership behavior. approached having some impact. The
authors conclude that issues relevant
to fairness and due process were
most salient to judicial decisions.
25
Informal, continuous feedback is the most valuable type. If feedback is
provided immediately following good or poor performance, it helps employees
make real-time alterations in their behavior and enables them to perform their
work more efficiently.
26
Building a High-Performance Culture: A Fresh Look at Performance Management
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27
Building a High-Performance Culture: A Fresh Look at Performance Management
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Management. Retrieved from www. Minneapolis, MN: PDI.
28
BUSINESS SUCCESS depends on getting the most out of people. Now more than ever,
businesses rely on HR professionals to make the most of a changing workforce. Because
great HR makes great organizations.
SHRM-CP
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SHRM-SCP
SM
shrmcertification.org/foundation
15-0164
The SHRM Foundation
At the SHRM Foundation, we help predict where the workforce is headed because weve been studying its evolution
for over 40 years. Our vision is a world of inspired business leaders implementing the winning combination of
employee fulfillment and business success. We offer unmatched workforce knowledge for the benefit of professional
leaders with a total focus on studying and reporting the management practices that work. The Foundation is governed
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