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Performance Management PuttingResearch into Action JamesW. Smitherand M a n u e lL o n d o n E , ditors

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CHAPTER

AN EXPANDED VIEW OFPERFORMANCE MANAGEMENT' HermanAguinis

An Expanded View of Performance M anagement The purposr of this ch:rprer is ro pr1)\irte.tn c\Jran.te.t !'c\ ot the perlormancc nr:rD;rqcIlrenrpfocc\s that subsuDresrhc lrldiri()nal I/O pqcholog pcifonn:ur.c apprai! lilclature. Ii is ar) cxpiur.tcd iiew in relarion ro dle traditioDal I/O ps\.chol(,t^oeatrrlenr of the topic irl fitc dillercnr \avs. Fir.sr.ir goes bcvorrrtan allrost exclusite emphasis, so re rLould 5a\ alnrost aD obressi.trr,on rhe mea\urenlcnt ol pcrfor.n arrce aDd in.Lrdcr a considcratii)n oi what happens bt'fbre and iticr pertirn ance is nr(.asure.t (lhat is, the role ol lirne an.l .i) tcxr). S(c(rrd. alth()ugh the I/a) *Thisresearch\as(oDdu.t.di.pr

\hit.tie,nru\guirnl,et(trh.Nt..)r.rl{1,n, Tem Profes$xhiu nr \hnagrrnenr r h . t - ! n e r t i s o ' ( : o l o r a r l oI ) . n \ . f n r x l v i s i l i n ga p p o i n r n e . t s a t t h . t l n e . \ i h o l S i h I r a r x i ( s p a n r r r n d l r D n . r i h ( n PuenoPjco.lrharl(.barl.s1.lier(c.\tan!ell_on{r.D.iDd.lnn\\'sDrirheri(, .ommenb on preriou\ dlari!. Tl,;.brpro n(h(L.s rn oi.t f,on, .rr.l is trased on llre tolloring boofr r$rlni\. H l!(lr)!r) Pa/ontn,n,marq.nar! enn cn.). Upp€r Saddle Rtr.r. \J: Ilrn,r P.en!.. tt.,ll Add.e$.on.spond€rx. r.r Ilenu.ur \flrinir. ]'lolc*, ,,f OrgrDtIi.,rrl Behariorod Hunran Revntr..s atrd De.nr . R.a,&L Itoti\e,r lielle\ strir .l &^inN, Indima tlnirer sn\ t.nrail: lknlnri\@ indi.x,a.cd,,)

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implcfilenra(ion. Ihis ilcreasing scicnce,pmcrice schisDris parrjc ularh puzlling in rhe casc of t/O ps\ chol:rg hcause rhe fit ld Nas crcated iurd secrns ro bc predicated lilndajncr)raliv on rhe prin crplcsol the scientist-pra.riti.nrer Dvfiel (Rass tq74: nrnrkffe. 1990:\lclIenl\. 2007:\lrrryh\ & Sarl, t!)90;Rrrpp & Beal,2007). Thc genefal scienccPracriccsap is particrrla.l\ cviden{ in the area ol peflinrnancc lnanagcnlenr.ptacorroltcrsare lntcresre.l rn sc|eral issuesdiiccth rclated ft) perfirrar)(e ma|agenlenl, including talenr nr:rnasc renr. lcadership de\'elopn)eDr.in(cn sificaticrnoi \\l)r'k a cnrplo\efs rn () incrcaseproducti\it\ with tewer rmplo\ccs. ancl nranaging drangc (Fa\: 2006; Schr.amm, 2006; Schwiud. 2007). On rhe orhcr haDd. a re\ie\{ b\ cas.i() , r ' r , l \ q r r i ' r i . , . . i r i r i x ..Ul r . \ r 1 l r l r , , rr 1 , , .t ; \ e r r r , , , rp , , p r r t . i r , , p , i , . published in ttie Joutut of ttppti{t ps\.ttdos,i (J,\p) fi c,Il) 2i)03 lo 2007 :rrc ( t ) job s:lri\firtn)D,atritu.tes./in\oh.emcDt/conrnril trert: (2) rvofl eroups/reams: (3) pertbr.rnanceappraisa]/fced, back; (.1) ofganirari(,nalculrrrr.cs. clinr:rrcs.policics, cirizcDs)rip; and (5) beha\'x)r,p.cdicrion ot pr.occsses. and out.o )cs. Th^r same relicl linrnd drar (he fi\e nro5t poputar n)pi(s publish(.d i Per.\a,d Pst.holagi(PP!\ch) also ben\cor 2003 ar)d 2007 rre (l) behavior'.prcclictionof proccsresand olrtconrcs:(2) perfor mance rplrraisal,/fcedblckr (:l) p5\chomcrric\,/resling issuesi (1) testvalidit\'/\?lidatiur issue\; and (5) \for( groups,/teams (Ctascio & Aguilis, 2008a). Three conclusionscrn bc drarrn from rhis i))t(r.ma(ic,n. Firsr. gircn that Clas.io arrrl Agrrinis (2008a) corlcd rhe articles pLrl> lished in JAP and PPs\ch using fifr\ dilltreDt carcBories,rhc con_ gruencc ben{ccrr the li!c, lisls of rhe rop 6\e I)ost popular (L,pics is remarkablc and sLLgeestsrhat thesc publicarioD rrencls are sound indicarorsol cornnmn, unrlerhing o.endsin rhe rcsearch produced in the field ol I,/O ps\'.holos\: Secrnrd, a ..rnllarison of rhe topics in which practiriurer.s are inrcr.cstert\.irh those in which academics are intcresred rlro\{s rangenrial orer)ap onlr: \r!'hile the k)pic peflbfmalce applaisal,/fccdba.k.'s iDclu.ted on tlte lists fi)r borh joufnals. the majoril\ of articles address ropics that arr nor suflicienrh broad lo address pracrili.)r)u con.cnls abotr talent nlanaflementand lcadershipderelt4rrncnt,to mcn tronJustrrr().The rhird conclusio| is rhar pracririoDcrsinrercsrcd in implemcnting sourrrl r.est'alchbascd pertin-mance man;rqcrnenr

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Management? what ls Performance p 2): Considerthe following situation (Aguinis' 2009'

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or lolknv{rp meerings.Salh lllls ou1rhe lirrns i,r lrss lhaD nfenl\ nunutesand selsbackro bef icalt()b." ,ts is ilhrsrnred b\ this lii{ncltc. \lhich des.ribcs a sirrrrlil,l that i\ painfulh t:nliliar r() DraD\.eadetJ.p.rtbrDlnn(c rrrr!rag. ment sv\temsafe ('f(c Lrnder-ulili/cdarrd also |risusrd. ID la.l, rn man\ organizarIon\,poorh iDrplcnrcnredperlbr.niu)ceman;Hcment svstemscan do rnore hrrm tl)ar)good, as rfasdenxDslr.utr'(l bv a legal casc in the consrrrcrirm indust.\ (I'\fl (ir.p().xrior). 2000). A {inrale empb\cc \ras prom()lcd \cleral rim(s an(l sllc, ceededuntil she sraf{cd\orkine Indcr the supeNis;(,I ofa Der managcr She \latcd iI her la\\suil tl)at. oD.e shc $as lrrom(,lcd and reported lo thc nerr m:rnt{er. thal boss;gnored her.and dnl not gne her rhc \anre slrppoi (,) oppornrnilics for rrainine (hirr her male colleacucsreceired.lfrer eighr nrontl)sol re.ei\in!.ll(t teedbackIrom hcr rnanaecr.lihr rtas c:rllcdiDto Ii\ olti.c. rlhcre the mlna{cr told her rhat she Nas fhilins. resnltinc iD a demo, tion and a $20.{XX} rc(lucri(xrin hcr irDrual salan.\\'lren she\ron h r r . e \ { l i \ r i r n i n r r ' , , n I n \ \ r ' i r . , ,i , , ' \ , s a r r i e , tl r , i rq t . l r , , i i , , , ,i , l emotionaldislrcs\and e.on.nnic darnaee\. In addition tc, an in.rc:bcd isk ol li(i!.arior. rhefe al.c \c\rral other detrinrcn tal ortco nrcsof poor]r irn plcrmcnre.l s\.slc nrs. ; )clLrrl, ing ernplo\ec burnour an(l -iob dissalisfirctic,n.damaecd rclatx)nships,and i cre:rs€d runrc\er (Rro\fn &-llenson, 2005; (;abris & Ihrke.2001). In addirion, rhere is ir large oppor.tDit\ cosr be.arsc poorly rmplemented slstems rrasrc rirne and rc\ources. iD.lldiDs Befole dcsigning a pcrfonnan.e nraDagemeDls\\lcllr. tlrere needsto be a clear definiriotl ol perlirr.rrance nritDr(crJl(.nt. per, formance managenrenris a coDtirLrousprocessoI identilring, measurine.and dercloping dle pcrforrnaD.e of iDdi\idnals :urd teams and alignin{ perfirrrnancc \1ith rhe slrarcgic goals ol lhe organization (Aguinis. 2009. p. 3). Nolc rhar the ker.c{rnrlnF nentsof $is definition arc rhar rhis is a conriDuo s pt1xes\ :rDd that there is an alignirc t r\'irh sl.a(egicgoals.U a 'ltanager.I;lls out a lbnn once a \ciu becauselhis is a reqnircilent ol the "HR cops," thcn this is ccnainlL nor a c.rntir)Lronspr.occss.Also, er:rhrating emplo\ee pcrformrn.e (lhat is, perfb.nrar)ce appmisal) withoutclear consilerationsof the exren( ro rr.trichan indiridual

6 rtrrorurce Mrucrvrxr and is contnbuting to unit and organizadonal Performance in the future ls also not about how Performancewill improle performancemanagement consistentwith this definition of

System? Why lmplementa PerformanceManagement can s€ne six imPofiant PurPerformancemanagements)stems (s€e Exhibit l.l tbr a poses ((t. Cleveland& MurPhy' 1989) summar)). of a Performanc€ Exhibit 1.1 Summary of Six Purpos€s MaDageme

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goals with individual goals' Sn**,r r, ttrr* *. organization's behatior" consisrtnt with the atainment h"i..rt" i.i"i"..i"! of organizationalgoals' useful infornation for Adninisriattue|r isa sturce ofralid and salarvadjuslmakineder isionsaboul emPlovees'including ttPlovee retenuonor lerminatron *.t"lp-.",t""t. identificauon of poor i"" "f ."p*.iperformance' ..."*i oerf6rmers, layoffs' and merit increases' how lt allowsemployeesto be informed aboul Cnmmun/.al')n: """*"ji specilic on ,it.'"-. a"t.'g' ro 'eceiu' i"fo'murion and to learn about ttre "."".in^, -"y ".Ja lmprovement' whal. exPecudlionsand l.n"nirurto,t t unOtfte supervisor's tftr. *Peftiv:lr brlietes are most imPortanl ".i"." "f*"* which allows managers to Deltel(hntntat:lt \ncl\rdes feedback' """'JJ on an "-or"v.o u"d help them imProvePerformance ongoing basis.

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Dorutnentatiott:It |irl orati\e Iashion (Dunnnlg. 200.1).!'irsr. rhe supenisor r)e€dsro explain lhat $orrld be re.tuircd for tbe ernp)orc.c rc, achiele rhe desiredpeffbrmance lerei, inclrrdirrgdle srepsrhar an ernpl(xee must take to improie pe.fornrance. This inforJnati{D needs to be providerl togerhc. rrith irfi)rmation o,) rh€ probabilin ot' successif the empklrcc conrpleres rhc sLrggestedsleps. Sccorrd. lhe supenisor has a priman lolc iD refe:r.ing rhe c plolec ro appropriate dcrelopment acli\irics rhar can assisr$c crnplovee in achievineher goals.This inclrrdeshelping rhc ernploveesetect a mentot appropriarc rcxdnrg resour.cs, courses. aDd so lbl.lh. Third, thr supenisol rericNs and nlakcs nrggesti(rrs aboul thc deleloprrent objectirt\. Specilicalh; rhc' supenisor. helps irssurc lhc goals are achicvable, spe.il;c, and doable. Follr.rh. rhc srpeni, sor h:rspriman resFmsibili[ fbr checkiDg otr rhe cn)plo\ee's prog, ress tor?rd achie\ing thc dc\elopmerr goals. For ex:unple, dre supenisor c:rrr remind thc empftx€e ol duc dates and re\ise goals il needed. Firudl\; lhc supenivn needs to proride reinlbrccmcnrs so thc enrplolee will be moti\ared lr) achi$e rhe .terelopnrcnt goals.Reinlorcemcnts can be exlrinsic:u)d iDclude rex.ards luch as tFnuses and ildditi()nal beDefirs, b r reiD{arcemenrs can also

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

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!'illalh a ftxrl tha( has bccor)rc polrular in helpiDg empk)rccs, parli.ulaflr tho\e in supeniso''\ roles, irnp.o\c pcrf()rn)alre b\ galhrling inldrnation lrom.iifiil.cnt eroups is the 36(!.tegfce ieedhx(l svstcrn(\l(nseson. \lrrrlnrrl. & tlanrpnri, 2(X)5).These s\sremstle cirllcd :16(klegree slsleIns be.ause irlli)rmarion i\ calhered liom in.li\ ichal\ :rll around rhe eIrlplolee.Spe.i{icalh.inldfm;rli()non \tal pernrrnrancedinleDsions.oLrld lr implr^cd i\ gathrrcd fronr slrperiors,peers..usr()rncr'\. nDClsub(nclirratc\. Ihis intornrati(mis usrralhcolkctcti aD(nNnroudrn) nrinin)izer':rtini{ rnflati(m. Empbrccs also ratc thenrselreson the \ i{nrs perlornance dinrcnsi(rrsarrd co:npare selherceprions rLith rhc irJi)fmalion pro\ideclb\ others. ,\ t{apaDahsisis condLrclccl r(, cxan)i c the rfcas for which there are l:rrge .lis.rcpancicsbctwcer sclt perccpuonsrrd the percepli{)nsol orhcr\. A 36(klcercc fcrdback svsrcnr.cPtrt unralh in.ludes inlalrrati.r) (rr dirrc sjoll\ li'r idrich there is agreemenl(hal lir'lhcr dcrckrprnerrtis neederl.l his rnfdrmrri(D is used ro crcltc:r dt'\el4rrlent pian. Implemenling a Sti{trdeerecfi'cdback s\,tlenrshould Dol be.r one-rimc-onl! c\cnt. The s\stcr)l sholrld be in ph.e and daLl collcctcd ()\cr tiur.()n an ongojng basis.Ihe imptemerlari(rr of urgoiDg 360tlepee lee2W. Mubaney,R. R. H., Z$ahr, M., & Baranoski, L. (2006). The rrend roward accountabili9: What does it mean for HR manage$l Hwaan R2sourc? ManagMt Rtutha I 6. 43144:2. Mu-rphy,K R., & Sazl, F. E. (Eds.) (1990). Psrchrlopin organizations: Int sroting s.ia." onl p.ack4 Mah$ah, NJ: tn\rence Erlbaum Nankenis,A. R., & Compron, R (2mG). Performanccmmagemenr: Thory in pmctice?,45tuPa.ij.lunnl oI Hu,tnn RMds, 4\a3,101.

42 Proonurcrt"texecwtrr Iknt' J L (2001)' L. S., Parker, R S' Petijohn' C E' & ' Pettiiohn, 'p..i..rnance appraisals:I rsJge (rireria and ob\enations /olnzi 'ertrua"2q'754-7at ot l4ous.nmr DwlalnvnL or Malar$ian reachers ro$ard a ' -R h."i;.::';-;r,106r sodat P"hotog' ,ster,- ltunar oI At'Pti"n ;;".-,...-pp*i'^

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