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SHRM Foundation’s 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. O’Leary, and Michael M. Meyrowitz

Sponsored by Halogen Building a High-Performance Culture: A Fresh Look at Performance Management

This publication is designed to provide accurate and authoritative information regarding the subject matter covered. Neither the publisher nor the author is engaged in rendering legal or other professional service. If legal advice or other expert assistance is required, the services of a competent, licensed professional should be sought. Any federal and state laws discussed in this book are subject to frequent revision and interpretation by amendments or judicial revisions that may significantly affect employer or employee rights and obligations. Readers are encouraged to seek legal counsel regarding specific policies and practices in their organizations.

This book is published by the SHRM Foundation, an affiliate of the Society for Human Resource Management (SHRM©). The interpretations, conclusions and recommendations in this book are those of the author and do not necessarily represent those of the SHRM Foundation.

©2012 SHRM Foundation. All rights reserved. Printed in the United States of America.

This publication may not be reproduced, stored in a retrieval system or transmitted in whole or in part, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the SHRM Foundation, 1800 Duke Street, Alexandria, VA 22314.

Selection of report topics, treatment of issues, interpretation and other editorial decisions for the Effective Practice Guidelines series are handled by SHRM Foundation staff and the report authors. Report sponsors may review the content prior to publication and provide input along with other reviewers; however, the SHRM Foundation retains final editorial control over the reports. Editorial decisions are based solely on the defined scope of the report, the accuracy of the information and the value it will provide to the readers.

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15-0187 Table of Contents

iii Foreword v Acknowledgments vii About the Authors 1 Building a High-Performance Culture: A Fresh Look at Performance Management 2 Common Strategies—and Why They Fail 3 Challenging Assumptions 4 Where’s the Disconnect? 5 Building a High-Performance Culture 6 Step 1: Motivate Change 10 Step 2: Lay Foundation 13 Step 3: Sustain Behavior 14 Step 4: Monitor and Improve 4 1 Old Thinking Versus New Thinking 5 1 Legal Considerations 17 Summary and Conclusion 19 Sources and Suggested Readings

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 HRM´s 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.

Mary A. Gowan, Ph.D. Chair, SHRM Foundation Research Evidence Committee Professor of Management Martha and Spencer Love School of Business Elon University iii

Building a High-Performance Culture: A Fresh Look at Performance Management

ACKNOWLEDGMENTS

The SHRM Foundation is grateful for the assistance of the following individuals in producing this report:

CONTENT EDITOR PROJECT MANAGER Lynn McFarland, Ph.D. Beth M. McFarland, CAE President Manager, Special Projects Human Capital Solutions, Inc. SHRM Foundation

REVIEWERS Robert Cardy, Ph.D. Chair, Department of Management College of Business University of Texas at San Antonio Carol J. Cooley, SPHR Vice President of Human Resources Total Community Options Tracye Mayolo, SPHR AVP of Human Resources Church Street Health Management

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

ABOUT THE AUTHORS

As vice president of PDRI’s 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 Martin’s 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 PDRI’s Board of Directors.

Dr. Rose Mueller-Hanson is director of Leadership and Organizational Development Consulting at PDRI, an SLH Company, where she leads a team of consultants to conduct applied research in performance management, leadership development and organizational design. She has presented her work at numerous national conferences and publications and is a co-recipient (with colleagues from PDRI) of the M. Scott Myers Award for Applied Research in the Workplace, granted by the Society for Industrial and Organizational Psychology. Prior to joining PDRI in 2002, Dr. Mueller- Hanson worked as a human resource manager for a nonprofit organization and served in the U.S. Air Force. She received her doctorate in industrial/organizational psychology from Colorado State University. She currently is the president of the Personnel Testing Council of Metropolitan Washington, DC.

Dr. Ryan O’Leary 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. O’Leary 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. O’Leary 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 SIOP’s 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 purpose—improving performance. Building a High-Performance Culture: A Fresh Look at Performance Management

BUILDING A HIGH-PERFORMANCE CULTURE: A FRESH LOOK AT PERFORMANCE MANAGEMENT

Managing employee performance is a key part of effective leadership. Research has shown that managers who engage in effective performance management produce extraordinary business results compared with those who do not. One study demonstrated 50 percent less staff turnover, 10 to 30 percent higher customer satisfaction ratings, 40 percent higher employee commitment ratings and double the net profits.1

But many organizations struggle to realize these benefits. When asked what purpose performance management should serve in organizations, employees, managers and HR professionals alike cite important outcomes such as improving performance effectiveness and results, developing employees, and facilitating communication and information exchange between employees and managers.

However, when a slightly different question is asked—what purpose does performance management serve—the responses are quite different. Most people say that in reality, performance management serves primarily administrative purposes. These include helping managers make pay decisions, providing documentation for the organization to defend itself in court and enabling the organization to deal with poor performers.

When asked, “How well does performance management work to achieve its purpose?” managers and employees agree: It does not work very well. Overall, attitudes toward performance management are consistently poor. No more than 30 percent of those surveyed reported that their performance management system effectively establishes goals, provides feedback and actually improves The Business Case performance. These perceptions have earned performance management the distinction of being the “Achilles’ heel” of human Effective performance management capital management.2 behavior leads to better: After decades of research and practice devoted to improving Bottom line results performance management systems in organizations, the reality Employee engagement is that most of them neither drive effective performance and Retention of key staff development nor serve administrative purposes. It is time to take a fresh look.

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:

Figure 1. Examples of Past Attempts to Improve Performance Management

Objectives, results, individual competencies, Change what is rated behaviors, contributions

Differentiated 3, 5, 7, or 9-point scales, pass-fail Change the rating scale scales, developmental scales or narratives

Supervisors, peers, customers or the employees Change who rates themselves

Change the goals SMART, HARD, cascaded, team, individual or none

2 Building a High-Performance Culture: A Fresh Look at Performance Management

Figure 2. Poor Performance Management Behavior

High Set Goals Mid-term Review Final Appraisal Activity Level

Low

Begin Cycle End Cycle

■■ Communicating expectations on a management for administrative is no clear connection between regular basis. purposes has become synonymous consistently high ratings given to most with burdensome requirements that employees and the more variable pay ■■ Providing feedback in real time detract from important goals. increases awarded to them. whenever exceptional or poor performance is observed. Many managers report that they CHALLENGING ASSUMPTIONS do not arrive at pay decisions ■■ Helping employees develop expertise by following the detailed rating that maximizes their potential. Assumption #1. Performance processes their performance If our systems are working, they management helps managers management systems prescribe, will create a pattern, showing make pay decisions. but instead retrofit their ratings to fit the pay increases they want to performance management as a Reality: Performance ratings usually give. Pay increases are affected by regular part of daily work. The do not sufficiently differentiate among many factors beyond the employee’s fact that this is rarely the case employees to support gradations performance, including the suggests there is plenty of room for in pay, unless managers use 4 competitiveness of the market, where improvement. forced distributions. This failure to employees sit within their pay bands differentiate can leave organizations Even beyond failing to drive effective, and even whose turn it is to get a ongoing behaviors, performance in a vulnerable situation if there

Figure 3. Effective Performance Management Behavior

High Set Goals Mid-term Review Final Appraisal Activity Level

Low

Begin Cycle End Cycle

3 Building a High-Performance Culture: A Fresh Look at Performance Management

little information that can be used identified eight habits of highly How to Drive Results to address performance issues. effective managers and three pitfalls Most organizations have an entirely that hamper success. Google found ■■ Set clear expectations for separate system for dealing with that what its employees valued most employees—so they can deliver. unsatisfactory performers. Employees were even-keeled bosses who made are often given formal notice when time for one-on-one meetings, helped ■■ Help employees find solutions they do not meet expectations, and them solve problems by asking to problems. specific expectations are outlined questions rather than by dictating in “performance improvement answers, and took an interest in their ■■ Play to employees’ strengths plans” or “opportunity periods.” lives and careers. One surprising rather than their weaknesses in Once employees are placed on a result was that the manager’s ability work assignments. performance improvement plan, to perform technical work ranked last 6 ■■ Acknowledge employees’ managers maintain extensive among the top eight behaviors. strengths while also addressing documentation to justify any Google discovered that bosses development needs. subsequent actions, such as have a great impact on employees’ separation or reduced compensation. ■■ performance and job attitudes. Provide regular, informal These separate systems are used to Simply put, better bosses translate feedback. deal with unsatisfactory performers into bottom-line results. This thinking because the main performance reflects the old HR adage that “people larger increase this year—a factor that management system usually does don’t quit their jobs, they quit their often comes into play when base pay not contain enough accurate rating managers.”7 Google’s best managers— increases are small overall. information. those who embraced the habits and avoided the pitfalls—had teams that Assumption #2. Performance WHERE’S THE DISCONNECT? performed better, stayed longer and management provides Most employees and managers view maintained positive attitudes. documentation that organizations their performance management need to defend themselves. systems as largely ineffective and Reality: A common belief is that incapable of delivering results. Eight Habits of Highly documentation is needed to defend But research performed by the Effective Google Managers administrative decisions, such as Corporate Leadership Council (CLC) ■■ promotions, separations and pay has shown that over half of the Be a good coach. most important drivers of employee raises in the face of legal challenges. ■■ Empower your team, and do not engagement and performance are However, in most cases, formal micromanage. performance management systems precisely the behaviors that define do a poor job justifying ratings and effective performance management: ■■ Express interest in team aligning ratings and outcomes. setting clear expectations, helping members’ personal success and What is documented in performance employees accomplish work, providing well-being. management systems often ends regular feedback, and finding ■■ Don’t be shy; be productive and up being more helpful to employees new opportunities for employees 5 results-oriented. challenging the organization than it is to succeed and develop. These to the organization defending itself. behaviors are clearly valuable, yet our ■■ Communicate and listen to your performance management systems team. are not seen as producing these. Why? Assumption #3. Performance What can firms do to improve results? ■■ Help your employees with management provides a career development. mechanism to deal with At Google the answer came in ■■ poor performers. the form of Project Oxygen, an Express a clear vision and strategy for the team. Because employees are hardly attempt to build better bosses. By analyzing performance reviews, ever rated less than “meeting ■■ Demonstrate technical skills so feedback surveys and nominations expectations,” most systems have you can help advise the team. for managerial awards, Google

4 Building a High-Performance Culture: A Fresh Look at Performance Management

Google’s Three effective performance management. Building a High- Pitfalls of Managers Although managers often do not recognize it, performance management Performance Culture ■■ Have trouble transitioning to is what good leaders do naturally, each Several factors influence the the team. and every day. These behaviors are likelihood that managers and essential tools that enable managers to employees will practice effective ■■ Lack a consistent approach to accomplish work through others. performance management behavior: performance management and career development. For employees, performance ■■ The extent that they believe management is the primary way performance management is ■■ Spend too little time managing of understanding what they are essential to getting work done. and communicating. supposed to do and developing ■■ and advancing their careers. Both The quality and trust of the manager-employee relationship. The factor over which companies managers and employees should view have the most control in terms of performance management not as a ■■ How well the company reinforces retaining employees is the quality of formal administrative system but as successful performance managers. Google began teaching a broader tool that helps employees management behavior as a key managers the eight habits in a variety accomplish work and organizations business strategy. of settings. This practice paid off retain key talent. quickly. Seventy-five percent of the Figure 4 shows a four-step process Communicating what employees are firm’s least competent managers to help organizations trying to build expected to do, providing feedback and showed significant performance and sustain a high-performance helping employees contribute the most improvement as a result.8 culture. The steps focus on changing they can to organizational success are perceptions and training, reinforcing, Taken together, the implication of the essential behaviors managers must and ensuring that effective behavior is the CLC and Google studies is that engage in to achieve the outcomes that integrated into the corporate culture. effective leadership is synonymous with drive a company’s success.

Figure 4. Four Steps to Developing a High-Performance Culture

• Assess current culture. Motivate change • Shift performance management mindset.

• Scale back burdensome demands. • Introduce new concepts. Lay foundation • Put the right people in managerial jobs.

• Provide tools and resources to drive behavior. Sustain behavior

• Hold leaders accountable for continuous improvement. Monitor and improve

5 Building a High-Performance Culture: A Fresh Look at Performance Management

readily understand these concepts, making changes in behavior easier Rather than trying to improve performance management tools to achieve. Organizations that do and processes, focus instead on creating a high-performance not have a performance mindset culture by improving the frequency and effectiveness of will require more time and effort performance management behavior. before they are able to demonstrate significant improvements in behavior. Assessing a firm’s culture provides a roadmap to the extent and type of change needed. Changing perceptions and integrating a high-performance culture is to Culture assessments also provide new behaviors into the culture are the assess where the organization a benchmark for tracking progress most important—and unique—aspects currently stands. Does the during and after implementation, of the approach described here. company already have a culture serving as a helpful tool for Unfortunately, most organizations that values excellence, strives for organizational feedback. do very little to make a compelling success, seeks feedback, and business case for the value of embraces continuous learning and performance management or to development? The second step is Shift Performance solidify effectual behavior on the job. to evaluate the extent to which both Management Mindset managers and employees currently Research and practice show engage in effective performance that successful organizational STEP 1: MOTIVATE CHANGE management behavior. change depends on management commitment—the stronger the Assess the In organizations that already commitment, the greater the embrace a high-performance 9 Current Culture potential for success. Executives culture, employees will more An important first step in building who believe in the value of

Figure 5. Examples of Strategies to Improve Performance Management

Benefits for Benefits for Managers Employees

Employees contribute more Employees feel more Communicate the when they understand the big connected and make big picture picture, meaning less work for wiser decisions, increasing managers. engagement and results.

Managers gain higher-quality Employees perform better Provide ongoing work from staff more quickly work and feel more confident expectations and feedback with less rework. about their contributions

Managers accomplish more, Employees grow, develop and Develop others succeed faster and focus on advance more quickly. through experience what they want to do.

6 Building a High-Performance Culture: A Fresh Look at Performance Management

more independently and effectively, New Mindset freeing managers to grow the group, Recommendations implement strategy or take on higher- Both managers and employees level responsibilities. Once managers ■■ Clearly articulate the must engage in performance and employees understand these organization’s mission and management behavior to benefits, they will be motivated to priorities. accomplish anything at work, so pursue them, rather than seeing ■■ Discuss how the work fits into this mindset benefits everyone. performance management as a burdensome administrative drill. the overall mission. ■■ performance management and Employees who have a clear Provide regular updates so communicate this to lower-level understanding of the big picture employees understand context managers and employees can help make more informed decisions and and outside factors affecting drive change. However, because can more readily connect with what is their work. success relies on both managers happening in the larger environment, and employees engaging in effective rather than needing continual Recommendations performance management behavior, step-by-step guidance from their they must be convinced of its value managers. for them personally. In other words, ■■ Tailor the type of expectations managers and employees must One strategy to communicate the to the particular job—behaviors, internalize a new mindset about big picture is to cascade goals results or SMART goals. performance management. from the top of the organization through each level until they reach ■■ Set ongoing expectations in One way to begin to shift mindsets is individual employees. Theoretically, real time throughout the rating to remind people that they engage in this approach enables employees period. performance management behavior to see how their work fits into the every day—with their children, organization’s mission and priorities.10 spouses, co-workers, friends and However, the process of cascading unit contributes to the whole and what vendors. Once people make this goals has proven challenging in organizational issues are influencing connection, they can better grasp practice. Organizational goals are the work. the meaning of performance frequently complex and can be management in the workplace. difficult to propagate to all levels and #2: Provide Ongoing Three actions should be targeted in jobs. In addition, cascading requires Expectations and Feedback meetings at each level that depend the workplace: 1) ensuring employees Most formal performance on higher levels completing their understand the “big picture” and their management processes begin with cascades. As a practical matter, role and contribution to the mission, planning that entails communicating cascaded goals rarely make it down to 2) setting clear expectations and expectations to employees for the individuals, and even partial cascades providing feedback so employees can upcoming rating period. A popular can take months to complete. succeed, and 3) developing individual practice is to set SMART (specific, Because this process is time- employees so they achieve their measurable, attainable, relevant, time- consuming and difficult to execute maximum potential. All three actions, bound) goals or to identify KPIs (key well, especially in large organizations reviewed in greater detail below, are performance indicators) that provide with many levels, it is unsustainable in clear positives for both managers and customized, meaningful expectations many firms.11 employees. and criteria based on what each An alternative to cascading goals employee is expected to achieve. is for managers to provide a plain- #1: Communicate the Big Picture Establishing goals at the beginning language description of how the Leaders need to be able to describe of the rating period can work well team and each employee contribute how the work of each employee for jobs with static performance to the overall mission. Engagement, relates to the company’s overall requirements and defined metrics, productivity and autonomous work are 12 mission. Employees who understand such as sales jobs. However, goal all facilitated by understanding how the big picture and deliver work that setting for knowledge and service- one’s work fits into the unit, how the meets expectations can operate based jobs, which are fluid and 7 Building a High-Performance Culture: A Fresh Look at Performance Management

Behavioral Standards Objective Results Task or Project Goals

• Can be used in most jobs. • Best for jobs with clear, readily • Best for jobs that are dynamic, but measured outcomes. in which nearer-term activities and • Most relevant for knowledge work. milestones can be defined. • Measure what matters, not just • Example: Treat others with what can be measured. • Closest thing to SMART. professionalism and respect; communicate clearly. • Examples: sales quotas, • Example: Complete XYZ report by production rates, error rates. Tuesday.

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 today’s 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 employee’s 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 15 has occurred during the rating period. 19 raise concerns about fairness. feedback, regardless of their age. 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 today’s 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 performance21 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 employees—behavioral 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 24 task or project goals—and the perform their work more efficiently. and develop employees, and some

8 Building a High-Performance Culture: A Fresh Look at Performance Management

Figure 6. Comparison of Formal and Informal Feedback

Formal Informal Feedback Feedback

Occurs in formal sit-down meetings (infrequent). Occurs spontaneously whenever discussion is needed.

Covers work conducted over time: Covers a specific incident—what multiple performance events and went right or wrong and what to competencies. do differently.

Relies on two-way accountability Initiated, led and controlled by and interaction. the manager.

The effectiveness of the feedback Figure 7. Leader Behaviors to Build Trust/Employee process—informal or formal—is Responses to Trust contingent on the manager-employee relationship.25 In fact, the strength of the relationship between managers Leader Behaviors Employee and employees influences employee to Build Trust Responses Trust job satisfaction, organizational citizenship, engagement and 1. Make realistic 1. Willingness to follow 26 commitments manager lead performance. Trust is a key element of the quality of this relationship and 2. F ollow through on 2. W illingness to take an essential prerequisite for effective promises feedback feedback and coaching.27 While some 3. Keep others informed 3. Perception of fair managers naturally create trusting 4. S how support and treatment relationships with employees, attitude avoid blame 4. Increased innovation surveys reveal that many employees and creativity have very poor relationships with their 5. Share information managers and do not trust them.28 6. Protect those not 5. Higher satisfaction present 6. Increased effectiveness Without a basic level of trust, it is unlikely that communication and engagement between a manager and employee will be sufficiently productive to lead to positive outcomes. Trust can be developed between managers and employees by Many managers and employees opportunities for it helps managers training managers to engage in trust- naturally engage in informal and employees take advantage building behaviors, like those shown in feedback, such as discussing how of “teachable moments.” These Figure 7. As trust increases between a presentation went, but these moments are learning opportunities managers and employees, they discussions tend to be more intuitive that occur as part of day-to-day become more comfortable with each than intentional, and they are work. Unfortunately, training for other and are more willing and able to often not recognized as feedback informal feedback is rare, but it is participate in valuable communication events. Understanding the value of critical to successful performance and feedback. informal feedback and recognizing management. 9 Building a High-Performance Culture: A Fresh Look at Performance Management

#3: Develop Others to employees who are already highly Through Experience skilled. Assigning tasks to those who Recommendations In most formal performance can clearly accomplish them presents ■■ management systems, the year-end less risk and potential for redoing Use job experience as the review is used as an opportunity to work, but this strategy is shortsighted. primary means of developing plan the employee’s development Forgoing opportunities to develop employees. employees’ skills leaves managers for the upcoming year. Development ■■ Continually seek job experience with fewer staff members who can should be ongoing and in real time that builds performance. as learning opportunities arise, not perform the full array of job tasks with restricted to one or two formal sit- a high degree of effectiveness. • Stretch outside comfort zone. down discussions yearly. In fact, if The most beneficial approach to • Provide opportunities to make ongoing performance conversations, development is for managers and mistakes. candid feedback and development employees to continually look for • Entail deliberate practice and occur day-to-day, formal review opportunities that will help enhance sessions will not really be needed, skills, so employees can contribute feedback. because there will be no new more fully. Development as a • Make relevant to role. information to exchange. continuous process helps employees acquire the experience they need Because identifying development Most formal performance and also encourages a development- areas is easier than knowing how management systems contain a oriented mindset, so that acquiring to address them, “Development number of steps and processes experience and enhancing skills Guides” are often provided to help that have been shown to be difficult become an integral part of day-to- managers and employees select and time-consuming to implement 29 day work. This strategy focuses both appropriate learning activities. well. These include things like managers and employees on taking These guides typically suggest on- cascading goals, SMART goals advantage of naturally occurring the-job experiences, formal training set at the beginning of the rating development opportunities, which and other resources, such as books period, numerical ratings on a large accelerates learning. or websites, targeted to different number of competencies, and competencies. They provide roadmaps mandatory review meetings, among for addressing development needs. STEP 2: LAY FOUNDATION others. Although these activities At the year-end review, managers can add value in certain situations, and employees usually select one Scale Back Burdensome they generally tend to contribute to or two competencies toward which intermittent and cyclical behavior Demands the employee will direct development rather than to the ongoing, day-to- Regarding what system or process to effort, typically taking some type of day behavior that is necessary for a implement, the key is to ensure that formal training. high-performance culture. To combat the associated tools and steps support this problem, evaluate each step of What many managers and employees the ultimate goals of the organization. an organization’s formal process for do not realize is that employees By focusing on completing forms and the results it is producing, with an eye usually gain the most learning and steps within prescribed time frames, toward eliminating steps, activities development by engaging in readily current performance management and requirements that fail to reinforce available job experiences day-to- processes tend to detract from 30 key leadership behaviors. day. In fact, 80 to 90 percent of effective behavior. In fact, achieving learning occurs on the job. If, for a high-performance culture that For example, many organizations example, an employee needs to reinforces day-to-day behavior means base performance ratings on improve her briefing skills or customer de-emphasizing, streamlining and competencies, which are often defined service skills, she should have many minimizing administrative requirements. by standards that reflect different opportunities to practice and acquire We offer several examples below of levels of responsibility, complexity these skills on the job. When making how current formal systems could be and difficulty at various job levels. assignments, however, managers scaled back to better support effective Competencies are advantageous often neglect to think about performance management behavior. because they provide a job-relevant, which employees need particular fair and consistent basis for evaluating experiences and instead assign work 10 Building a High-Performance Culture: A Fresh Look at Performance Management

employees. Some performance Another strategy for streamlining is to management systems contain a large eliminate weighting of competencies. Recommendations number of competencies, which can An overall rating based on weighted take a long time to rate, especially for competencies tends to result in the ■■ Eliminate formal system managers with many employees. But same rank order of employees as steps that do not add value or given that little differentiation in ratings using unweighted competencies. So undermine effective performance exists among employees, there is no the added burden of weighting has no management behavior. compelling practical reason to rate a practical impact on results. ■■ Use the smallest number of large number of competencies. A final streamlining strategy is to rating factors possible to cover In the spirit of streamlining formal reduce or eliminate requirements job requirements. system requirements to make way for narratives. If effective, ongoing ■■ Simplify rating scale and for increased daily performance feedback is occurring in real time, requirements. management behavior, we narratives typically add little value recommend collecting ratings on as and in fact often undermine candid ■■ Identify tools that will be well few competencies as are necessary to information exchange, due to received and that effectively drive capture the job’s critical requirements. reticence on the part of managers desired behavior. This method can amount to as few as to put negative information in three or four—for example, technical writing. Also, because narratives However, whether formal numerical performance, teamwork and initiative. are often misaligned with ratings or ratings are actually needed in a Although five- and seven-point scales rewards, they do not provide credible given situation is useful to evaluate. are commonly used in rating systems, justification for either. The value As discussed earlier, ratings do not simpler scales with three points of performance narratives in many necessarily support the administrative are often sufficient because most situations is unclear. purposes they are designed for. employees are rated at the top end of The necessity of rating or “grading” whatever scale is used. See Figure 8 The more performance management employees is an unquestioned for an example. can be disentangled from these assumption in most organizations. administrative purposes, the easier it

Figure 8. Example of a Simplified Rating Scale

Failed to meet technical quality standards; work was incomplete, ❑ Unacceptable poorly conceived, error-ridden or not well targeted; work performed unsatisfactorily or in an unresponsive manner.

Products and services met expectations, were complete, well Successful targeted and understandable; work performed was responsive and ❑✔ competent.

Surpassed quality standards and expectations; products were Outstanding thorough, error-free, ideally targeted and maximally responsive to ❑ needs.

11 Building a High-Performance Culture: A Fresh Look at Performance Management

Figure 9. Traditional Training/Behavior Change

Traditional Training Behavior Change

• Typically manager only • Training provided for both managers and employees • Primarily on navigating the formal process • Deeper dive, focusing on the knowing/ doing gap • F ocuses on knowledge acquisition, not skill building • More individualized, using assessment results as baseline • O ften disconnected from on-the-job realities • Uncovers underlying fears and attitudes that prevent change • No accountability for learning or application • Accountability for learning and application • No reinforcement on the job • Tools to facilitate change

will be to motivate effective behavior. One difference between the training Administrative purposes actually model proposed here and typical training undermine effective performance is that the latter focuses primarily on To build a high-performance management by inhibiting honest formal system steps, while lip service—at culture, training needs to feedback and development most—is paid to engaging in effective be effectively delivered and 31 discussions. If organizational decision behavior. Even when more extensive transferred to the job through makers can abandon their numerical behavioral training is offered, supports ratings altogether or possibly use are rarely in place to reinforce training on the use of environmental summary strengths and development the job. Below we discuss the beginning cues, tools and reinforcers areas in lieu of them, a high-performance of the training process, designed to that drive behavioral change. culture is likely to evolve more quickly. introduce concepts. If policy dictates that a rating of record For initial training, in-person sessions is needed, there are clear advantages are recommended to better convey to implementing the least burdensome the advantages of this new approach. clear expectations) can be offered requirements that will meet the Although more expensive, the to support behavioral change. An organization’s needs, as this will minimize training can then include hands-on advantage of web-based training is that the effort associated with making formal exercises and interactive discussions participants can complete programs ratings that add little practical value. to facilitate understanding. If feasible, at their own pace. Advanced forms of it is best to train intact manager online training can also provide high- Introduce New Concepts and employee teams to carry out fidelity simulated practice exercises. Employees and managers need to ongoing performance management The biggest disadvantage of web- be able and motivated to engage in activities to allow them to understand, based training is that managers and effective performance management. practice and become comfortable employees can ignore it easily. Training can be helpful, but traditional with their roles in the feedback and training is more of an introduction to development process. Put the Right People in concepts and must then be followed Managerial Jobs by a solid strategy to ensure behavior Following initial training, web-based A final important component of change. modules on selected topics (e.g., setting

12 Building a High-Performance Culture: A Fresh Look at Performance Management

creating the foundation for a high- reinforce productive behaviors. performance culture is ensuring that Recommended Topics managers with the potential or skills On-the-job performance management are useful to strengthen skills to perform effectively are in place. aids learned in training. For example, an For both managers and Many are promoted into managerial aid might be developed that lists a employees: positions because of their technical manager’s primary responsibilities in ■■ competence, even though the job of Building trust. the performance management process. a manager is not to perform technical ■■ Such aids tend to be succinct “at a Learning strategies for work. One of the more interesting glance” tools, and as such, they are communication. findings from the Google study is usually most beneficial following formal ■■ that in an organization that relies on Ongoing expectations and training. The advantage of such aids is technical innovation and competence, feedback. that they can be used at an employee’s the ability to provide advice on ■■ Developing through experience. discretion. technical issues was the least critical For managers: of the eight good boss habits. Other tools that help keep ■■ performance management at the Communicating the big picture. These results further support what forefront of employees’ and managers’ ■■ we already know—namely, that the Diagnosing and addressing minds on a daily basis include essence of a manager’s job is to direct performance issues. things like cartoons-of-the-day and and develop others successfully. ■■ Deep-diving on feedback and messages from leadership, which Managers need particular aptitudes, coaching skills. can be sent to employees’ desktops, skills and dispositions to be able laptops and mobile devices. to learn their leadership roles and For employees: effectively accomplish work through Over the past several years, many ■■ Ensuring clear expectations. others. So selecting managers who organizations have implemented ■■ Seeking feedback. are well suited for the job is the first automated systems to ease administrative ■■ step in driving effective performance demands. The typical automated Reacting well to feedback. management behavior. performance management system is a stand-alone system that is separate Obviously, if attention has not been from other automated systems that are paid to selecting managers with strong events. Another organization used daily. As such, they require separate leadership skills, more effort will need provided an easily accessible tool logins, and most get used only at peak to be devoted to training and training to provide feedback to others required activity times: the beginning transfer. Because many organizations with a click. Tools that incorporate of the cycle, when most performance will not displace managers once they social networking concepts to drive management processes require goals are selected, there may be limits on how feedback are especially helpful for to be recorded in the system, toward well some managers will be able to learn engaging younger employees in the the end of the cycle, when employees effective performance management performance management process. are often required to record their behavior. Selecting managers with the accomplishments or self-ratings, and Some organizations provide a potential to perform satisfactorily makes at the very end, when managers are performance management hotline a long-term contribution to building a required to record ratings. to facilitate learning and to provide high-performance culture. coaching support for managers and If performance management tools that employees. Callers can ask questions STEP 3: SUSTAIN BEHAVIOR facilitate feedback and development about performance management issues were incorporated seamlessly into the they are experiencing. While such standard IT systems and workflows hotlines can add value in building a Provide Tools and Resources that employees use every day, performance culture, organizations must to Drive Behavior they would help drive more regular be willing to staff them with capable After introducing the concepts behavior. Simply put, making tools people who can competently offer underlying effective performance easily accessible makes it more advice. This type of hotline requires management through formal training, likely people will use them. One a different skill set than do hotlines the next crucial step is to incorporate organization tagged e-mails to flag focused on procedural, administrative tools and features that build and them as development or feedback and automated system support. 13 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 happen overnight. Rather, it can take be eliminated entirely, this is not pushed out via automated considerable time, even years, for necessary. Rather, substantial changes systems. enculturation of sustainable change. should be made to redirect current ■■ performance management systems Performance management What will help drive a high- hotlines and coaches. and approaches so they focus on performance culture are ongoing reinforcing the critical behaviors—for ■■ Social networking tools and evaluation, feedback and improvement both managers and employees—that 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

Performance Management Performance Management “Old Thinking” “New Thinking”

Organizational Alignment Cascading goals Mission articulation and discussions of fit

Goals SMART goals at the beginning of the cycle Ongoing expectations as work evolves

Development Reluctance to discuss; primarily formal Part of daily routine; acquiring training experience, mentoring

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

Policies and Procedures Extensive, with documentation Considerably streamlined requirements

Evaluation, Monitoring Whether steps are completed or not Pulse surveys to gauge behavior, satisfaction, results and perceived value 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 ■■ like those identified in the Google Purpose of tool is to help frequency of the reports is decided research. employees understand how 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 ■■ Free classes offered to 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 companies—including Google and given feedback once yearly as part of on how employees are perceived by Apple—are 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 32 extent to which they demonstrate offered to help the employee improve. behavior as their key strategy.

15 Building a High-Performance Culture: A Fresh Look at Performance Management

Legal Considerations the organization’s 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 33 about professional and legal enhance defensibility, especially in ratings or rewards, managers often 34 guidelines, 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 35 face of a legal challenge. 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 arise—because 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 documentation is created that complies It is noteworthy that none of the Many of today’s formal performance with the guidelines outlined above. recommendations made in this report management systems would not fare will undermine the defensibility of

Performance Management Guidelines Based on Case Law

■■ Evaluate employees on job-relevant factors.

■■ Inform employees of expectations and evaluation standards in advance.

■■ Have a documented process with specified roles for managers and employees.

■■ Train managers and employees on the performance management process and relevant skills.

■■ Document justifications for rewards/decisions by managers.

■■ Provide timely feedback on performance issues.

■■ Allow employees to formally comment on and appeal evaluations.

■■ Make sure evaluations used for decision-making are consistent with decisions.

16 Building a High-Performance Culture: A Fresh Look at Performance Management

SUMMARY AND CONCLUSIONS

There is strong consensus that high performance. Research has performance management is shown that effective performance the most difficult human capital management behaviors positively system to implement successfully, affect employee engagement with both employees and and bottom-line results. To the managers unconvinced about extent that changes are made to its value. Its inherent difficulties formal systems, the goal should have commanded an enormous be to reduce complexity and amount of attention from both administrative demands. While the researchers and practitioners, but strategies outlined here may be the vast majority of interventions to more challenging to implement improve performance management than a traditional formal system, outcomes have focused on making they are also more likely to changes to the formal system. produce sustainable performance management improvements leading This report suggests that to a more successful and productive organizations should cease organization. their almost exclusive focus on reinventing formal systems and instead focus on building trust between managers and employees creating a culture that fosters

17 One way to begin to shift mindsets is to remind people that they engage in performance management behavior every day—with 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

Beer, M. (1981). Performance appraisal: Dilemmas and possibilities. Organizational Dynamics, 9(3), 24-36.

This article attempts to summarize what is known about the underlying causes of problems experienced with performance appraisal and to suggest some means for overcoming them. The central thrust has been to find means for dealing with the main barriers to effective appraisals—avoidance by the supervisor and defensiveness from the subordinate. The authors suggest a number of ways in which supervisors and employees might negotiate the difficult dilemma of discussing an evaluation of performance in a nonevaluative manner.

Bryant, A. (2011, March 13). Google’s quest to build a better boss. The New York Times, p. BU 1.

In early 2009, statisticians inside the Googleplex embarked on a plan code-named Project Oxygen. Their mission was to build better bosses. Google began analyzing performance reviews, feedback surveys and nominations for top-manager awards. The statisticians correlated phrases, words, praise and complaints and found eight habits good managers have that all reflect performance management behavior. For much of its 13-year history, particularly in the early years, Google has taken a pretty simple approach to management: Leave people alone. Let the engineers do their stuff. If they get stuck, they’ll ask their bosses, whose deep technical expertise propelled them into management in the first place. But what the study found was that technical expertise ranked dead last among Google’s big eight habits. What employees valued most were even-keeled bosses who made time for one-on-one meetings, who helped people puzzle through problems by asking questions, not dictating answers, and who took an interest in employees’ lives and careers.

Cardy, R. L. (2003). Performance management: Concepts, skills, and exercises. Armonk, NY: M. E. Sharpe, Inc.

This book examines the entire process of performance management, providing both theoretical concepts and practical, how-to skills. It is organized around a straightforward model of performance management that includes performance definition and improvement, diagnosis,

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 supervisor’s knowledge of the is the business case for (or against) often overlooked, such as incorporating subordinate’s job performance, a allocating scarce resources to drive strategy and values into performance supervisor’s support of the subordinate employee engagement? Of the many criteria and dealing with emotions and a supervisor’s welcoming of things that impact engagement, that can accompany performance the subordinate’s 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 Psychology, 83(4), 615-633. performance and retention through 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 managing—and between participation in performance how to evaluate feedback and what to focus on what really matters. New do if the decision is made not to use it appraisal and employee reactions. York: Business Plus. Various ways of conceptualizing are also provided. participation and employee reactions This book points out profound Corporate Leadership Council. are discussed and analyzed. Overall, problems with typical performance Driving employee appraisal participation is found to be (2004). 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 one’s “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. Bringing out participation (i.e., participation for the Daniels, A. C. (2000). 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 relate to organizational justice issues. senior HR executives: achieving reinforcement. New York: McGraw- increasingly higher levels of employee Hill. Cederblom, D. (1982). The performance while retaining the performance appraisal interview: A organization’s top-tier and “core” This book argues that the key to review, implications, and suggestions. performers. It was hypothesized managing effectively has always Academy of Management Review, that these outcomes are driven by remained the same—create positive consequences for workers when they 7(2), 219-227. employee engagement, and the 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 manager’s 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 Manager’s Handbook how to provide constant feedback performance levels. Specific is a trusted resource for organizations and reinforcement—so 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 employee’s 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 manager’s 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 help on documenting and changing feedback, an important part of 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. State of the art in practice. San typically assume that providing It presents information on the legal employees with feedback about their framework surrounding discipline and Francisco: Jossey-Bass. performance makes it more likely that on specific measures for accurate 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 conditions 1) 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 manager’s 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 CCL’s 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 place—from 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 Defense’s of feedback that influence 1) the way appraisal fairness and validity. (DOD’s) 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 GAO’s 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 DOD’s 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 Leadership’s for anomalies, publishing final rating continuing studies of executives distributions to improve transparency Creating learning experiences have found that learning on the and developing action plans to improve without changing jobs. job is the best way for a person to negative employee perceptions. Greensboro, NC: CCL Press. 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). What’s 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 What’s 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 Mercer’s 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 executive’s 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 appraiser’s 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. Mercer’s (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 significance. Public Personnel the future,” compared to 63 percent civil servants to produce detailed rankings of employee satisfaction Management, 29(3), 379-406. in 2002. Some 65 percent (up from 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., & O’Leary, 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., & O’Leary, 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 effective United States. In A. Varma, P. results in organizations. Some of the feedback, orchestrate learning S. Budhwar, & A. DeNisi (Eds.), topics discussed include cascading opportunities and groom high- Performance management systems goals, SMART goals, performance potential performers. around the globe (pp. 97-114). accomplishments, and defining performance objectives, among Pulakos, E. D. (2004). Performance London: Routledge. others. The circumstances under management: A roadmap for Although there is enormous variety which these types of performance 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, & O’Leary, R. majority of these systems. Three S. (2011). Why is performance This report describes practice key factors have had a particular management broken? Industrial 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 Performance nor negative, they represent major Pulakos, E. D. (2010). have focused on understanding and trends with significant implications management: A new approach for improving performance management for performance management design driving business results. Oxford, systems in organizations, the and implementation. In contrast, the UK: Wiley-Blackwell. 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 This edited book is part of the Society Management. Retrieved from www. Psychology, 50(1), 1-24. for Industrial and Organizational workforce.com/article/20110505/ Psychology’s 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 author’s 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

REFERENCES

1. The Ken Blanchard Companies. (2009). The high cost of doing nothing: Quantifying the impact of leadership on the bottom line. Escondido, CA: Author.

2. Pulakos, E. D. (2004). Performance management: A roadmap for developing, implementing and evaluating performance management systems. Alexandria, VA: SHRM Foundation.

3. Pulakos, E. D, & O’Leary, R. S. (2011). Why is performance management broken? Industrial and Organizational Psychology, 4(2), 146-164.

4. Pulakos (2004). Performance management: A roadmap for developing, implementing and evaluating performance management systems. Alexandria, VA: SHRM Foundation.

5. Corporate Leadership Council. (2004). Driving employee performance and retention through engagement: A quantitative analysis of the effectiveness of employee engagement strategies. (Catalog No. CLC12PV0PD). Washington, DC: Corporate Executive Board.

6. Bryant, A. (2011, March 12). Google’s quest to build a better boss. The New York Times, p. BU 1.

7. Harvey, P., Stoner, J., Hochwarter, W., & Kacmar, C. (2007). Dealing with bad bosses: The neutralizing effects of self- presentation and positive effect on the negative consequences of abusive supervision. Leadership Quarterly, 18, 264-280.

8. Bryant, A. (2011, March 12). Google’s quest to build a better boss. The New York Times.

9. Beer, M. (1981). Performance appraisal: Dilemmas and possibilities. Organizational Dynamics, 9(3), 24-36.

10. Hillgren, J. S., & Cheatham, D. W. (2000). Understanding performance measures: An approach to linking rewards to the achievement of organizational objectives. Scottsdale, AZ: WorldatWork.

27 Building a High-Performance Culture: A Fresh Look at Performance Management

11. Pulakos, E. D., & O’Leary, R. workforce.com/article/20110505/ 28. Mercer Human Resource S. (2011). Why is performance NEWS02/305059995. Consulting. (2005). What’s working management broken? Industrial and survey. New York: Author. 20. Ilgen, D. R., Fisher, C. D., & Taylor, Organizational Psychology, 4(2), S. M. (1979). Consequences of 29. Pulakos, E. D., & O’Leary, R. S. 146-164. individual feedback on behavior in (2010). Defining and measuring 12. Pulakos, E. D., Mueller-Hanson, organizations. Journal of Applied results of workplace behavior. R. A., & O’Leary, R. S. (2008). Psychology, 64(4), 349-371. In J. L. Farr & N. Tippins (Eds.), Performance management in The handbook of employee 21. Kluger, A. N., & DeNisi, A. the United States. In A. Varma, selection (pp. 513-529). New York: (1996). The effects of feedback P. S. Budhwar & A. DeNisi (Eds.), Psychology Press. interventions on performance: A Performance management systems historical review, meta-analysis, and 30. Lombardo, M. M., & Eichinger, R. W. around the globe (pp. 97-114). a preliminary feedback intervention (1989). London: Routledge. Eighty-eight assignments for theory. Psychological Bulletin, development in place. Greensboro, 13. Cascio, W. F. (1998). Applied 119 (2), 254-284. NC: CCL Press. psychology in human resource 22. Pearson, C. A. (1991). An 31. Pulakos, E. D., & O’Leary, R. S. management. Upper Saddle River, assessment of extrinsic feedback (2010). Defining and measuring NJ: Prentice Hall. on participation, role perceptions, results of workplace behavior. 14. Pulakos, E. D., & O’Leary, R. S. motivation, and job satisfaction in a In J. L. Farr & N. Tippins (Eds.), (2010). Defining and measuring self-managed system for monitoring The handbook of employee results of workplace behavior. group achievement. Human selection (pp. 513-529). New York: In J. L. Farr & N. Tippins (Eds.), Relations, 44(5), 517-537. Psychology Press. The handbook of employee 23. Center for Creative Leadership, 32. Pyrillis, R. (2011). Is your selection (pp. 513-529). New York: Kirkland, K., & Manoogian, S. performance review Psychology Press. (2007). Ongoing feedback: How to underperforming? Workforce 15. Pulakos, E. D., & O’Leary, R. get it, how to use it. San Francisco: Management. Retrieved from www. S. (2011). Why is performance Pfeiffer. workforce.com/article/20110505/ management broken? Industrial and NEWS02/305059995. 24. Gregory, J. B., Levy, P. E., & Jeffers, Organizational Psychology, 4(2), M. (2008). Development of a model 33. Uniform guidelines on employee 146-164. of the feedback process within selection procedures. (1978). 16. Wexley, K. N. (1986). Appraisal executive coaching. Consulting Federal register, 43, 38295-38315. interview. In R. A. Berk (Ed.), Psychology Journal: Practice and 34. Ibid. Performance assessment (pp. Research, 60(1), 42-56. 167-185). Baltimore, MD: Johns 35. Martin, D. C., Bartol, K. M., & Kehoe, 25. Daniels, A. C. (2000). Bringing out Hopkins University Press. P. E. (2000). The legal ramifications the best in people: How to apply of performance appraisal: The 17. Globoforce (2011, April 21). The the astonishing power of positive growing significance.Public failure of the annual performance reinforcement. New York: McGraw- (3), review [Web log post]. Retrieved Hill. Personnel Management, 29 379-406. from www.globoforce.com. 26. Graen, G. B. (in press). The new 36. Gilliland, S. W., & Langdon, J. C. 18. Culbert, S. A., & Rout, L. (2010). Get LMX theory: The missing link of (1998). Creating performance rid of the performance review!: How interpersonal strategic alliances. management systems that companies can stop intimidating, start In M. G. Rumsey (Ed.) The Many promote perceptions of fairness. managing—and focus on what really Sides of Leadership: A Handbook. In J. W. Smither (Ed.) Performance matters. New York: Business Plus. London: Oxford University Press. appraisal: State of the art in practice. 19. Pyrillis, R. (2011). Is your 27. Peterson, D. B., & Hicks, M. D. San Francisco: Jossey-Bass. performance review (1996). Leader as coach: Strategies underperforming? Workforce for coaching and developing others. Management. Retrieved from www. Minneapolis, MN: PDI.

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