Performance management 2009

Professional Practice

SERIES

THE

James W. Smither

Manuel London

EDITORS

Putting Research

into Action

A Publication of the Society for

Industrial and Organizational Psychology

Performance

Management

Performance Management

Putting Research into Action

The typical performance appraisal process puts

the emphasis on an annual evaluation of employee

performance. Performance management shifts the

focus to an ongoing process that includes setting and

aligning goals, coaching and developing employees,

providing informal feedback, formally evaluating

performance, and linking performance to recognition

and rewards.

Performance Management—a volume in the SIOP

Professional Practice Series—offers a compendium

of the most current thinking, strategies, and best

practices in performance management written by

leading academics, practitioners, consultants, and

researchers in the fi eld. The book’s seventeen chapters

include an introduction of the concepts and issues, a

review of theory and research, evidence-based best

practices, dozens of illustrative examples as well as

information on future directions, opportunities, and

challenges.

Written for human resource managers, consultants,

and line managers, this important resource contains

a wealth of information for implementing an effective

performance management system. The book includes

information on the:

• 14 features that help defi ne a successful

performance management system

• 7 drivers of alignment including the relationship

between alignment and fi nancial performance

• 5 factors that affect the impact of goal setting

• 11 steps to maximize the value of external

coaches

• CEO and board performance management

process

The Editors

James W. Smither, Ph.D., is a consultant and scholar,

with years of corporate HR experience. He is a

professor in the Management Department at LaSalle

University. A prolifi c writer, he is also the editor of the

popular Performance Appraisal: State-of-the-Art in

Practice (from Jossey-Bass).

Manuel London, Ph.D., is associate dean and director

of the Center for Human Resource Management at the

College of Business at the State University of New York

at Stony Brook. He also has 12 years of corporate HR

experience. He is the co-author with Marilyn London

of First Time Leaders of Small Groups: How to Create

High-Performing Committees, Task Forces, Clubs, and

Boards from Jossey-Bass.

The Society for Industrial and Organizational

Psychology (SIOP) is a 3,000-member Division

within APA. The Professional Practice Series provides

practitioners and students with guidance, insights,

and advice on how to apply the concepts, fi ndings,

methods, and tools from I/O psychology to solve

human-related organizational problems.

www.josseybass.com Join Us at

Josseybass.com

Register at www.josseybass.com/email

for more information on our publications,

authors, and to receive special offers.

ORGANIZATIONAL DEVELOPMENT

Performance Management

Smither

London

editors

• 8 dimensions of national culture that shape

performance management processes

• Role of technology in developing and using a

performance management system

• 6 assessment points that can be embedded in a

comprehensive performance management system

• And much more

The contributors offer HR professionals a

comprehensive jargon-free understanding of the most

recent research, proven practices, and lessons learned

on performance management.

“In this comprehensive and timely volume, Smither and London assemble

an exceptional collection of chapters on topics spanning the entire

performance management process. Written by leading researchers and

practitioners in the fi eld, these chapters draw on years of research and

offer a blueprint for implementing effective performance management

systems in organizations. This volume is a ‘must-read’ for all those

interested in performance management.”

—John W. Fleenor, Ph.D., research director, Center for Creative

Leadership

“The quintessential tool for the scientist-practitioner working on improving

the performance management system in their organization.”

—Sandy Lionetti, Ph.D., director, Talent Management, Leadership and

Organizational Development, GlaxoSmithKline Consumer Healthcare

“Finally, a book that brings together the latest research fi ndings on a

very important process that needs to be executed with the greatest

effectiveness and effi ciency. The information is presented in a way that

an HR practitioner, like myself, can readily apply.”

—Gale H. Varma, executive vice president, Human Resources, Charming

Shoppes, Inc.

Praise for Performance Management

A new volume in the SIOP Professional Practice Series, Performance

Management provides a comprehensive resource of the most current

thinking, strategies, and best practices in performance management.

(Continued from front flap)

Cover images © iStock

(Continued on back flap)

ffirs.indd vi 7/1/09 11:19:34 AM

Performance Management

ffirs.indd i 7/1/09 11:19:33 AM

The Professional Practice Series

The Professional Practice Series is sponsored by The Society for

Industrial and Organizational Psychology, Inc. (SIOP). The series was

launched in 1988 to provide industrial and organizational psychologists,

organizational scientists and practitioners, human resources professionals,

managers, executives and those interested in organizational behavior and

performance with volumes that are insightful, current, informative

and relevant to organizational practice. The volumes in the Professional

Practice Series are guided by fi ve tenets designed to enhance future

organizational practice:

1. Focus on practice, but grounded in science

2. Translate organizational science into practice by generating guide￾lines, principles, and lessons learned that can shape and guide

practice

3. Showcase the application of industrial and organizational psychol￾ogy to solve problems

4. Document and demonstrate best industrial and organizational￾based practices

5. Stimulate research needed to guide future organizational practice

The volumes seek to inform those interested in practice with

guidance, insights, and advice on how to apply the concepts, fi ndings,

methods, and tools derived from industrial and organizational

psychology to solve human-related organizational problems.

ffirs.indd ii 7/1/09 11:19:33 AM

Previous Professional Practice Series volumes include:

Published by Jossey-Bass

Customer Service Delivery

Lawrence Fogli, Editor

Employment Discrimination Litigation

Frank J. Landy, Editor

The Brave New World of eHR

Hal G. Gueutal, Dianna L. Stone, Editors

Improving Learning Transfer in Organizations

Elwood F. Holton III, Timothy T. Baldwin, Editors

Resizing the Organization

Kenneth P. De Meuse, Mitchell Lee Marks, Editors

Implementing Organizational Interventions

Jerry W. Hedge, Elaine D. Pulakos, Editors

Organization Development

Janine Waclawski, Allan H. Church, Editors

Creating, Implementing, and Managing Effective Training and

Development

Kurt Kraiger, Editor

The 21st Century Executive

Rob Silzer, Editor

Managing Selection in Changing Organizations

Jerard F. Kehoe, Editor

ffirs.indd iii 7/1/09 11:19:33 AM

Evolving Practices in Human Resource Management

Allen I. Kraut, Abraham K. Korman, Editors

Individual Psychological Assessment

Richard Jeanneret, Rob Silzer, Editors

Performance Appraisal

James W. Smither, Editor

Organizational Surveys

Allen I. Kraut, Editor

Employees, Careers, and Job Creating

Manuel London, Editor

Published by Guilford Press

Diagnosis for Organizational Change

Ann Howard and Associates

Human Dilemmas in Work Organizations

Abraham K. Korman and Associates

Diversity in the Workplace

Susan E. Jackson and Associates

Working with Organizations and Their People

Douglas W. Bray and Associates

ffirs.indd iv 7/1/09 11:19:34 AM

Performance Management

Join Us at

Josseybass.com Jo

Register at www.josseybass.com/email

for more information on our publications,

authors, and to receive special offers.

ffirs.indd v 7/1/09 11:19:34 AM

ffirs.indd vi 7/1/09 11:19:34 AM

Performance

Management

Putting Research

into Action

James W. Smither and

Manuel London, Editors

ffirs.indd vii 7/1/09 11:19:34 AM

Copyright © 2009 by John Wiley & Sons, Inc. All rights reserved.

Published by Jossey-Bass

A Wiley Imprint

989 Market Street, San Francisco, CA 94103-1741—www.josseybass.com

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form

or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as

permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior

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to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax

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be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ

07030, 201-748-6011, fax 201-748-6008, or online at www.wiley.com/go/permissions.

Readers should be aware that Internet Web sites offered as citations and/or sources for further

information may have changed or disappeared between the time this was written and when it is read.

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts

in preparing this book, they make no representations or warranties with respect to the accuracy

or completeness of the contents of this book and specifi cally disclaim any implied warranties of

merchantability or fi tness for a particular purpose. No warranty may be created or extended by sales

representatives or written sales materials. The advice and strategies contained herein may not be

suitable for your situation. You should consult with a professional where appropriate. Neither the

publisher nor author shall be liable for any loss of profi t or any other commercial damages, including

but not limited to special, incidental, consequential, or other damages.

Jossey-Bass books and products are available through most bookstores. To contact Jossey-Bass directly

call our Customer Care Department within the U.S. at 800-956-7739, outside the U.S. at 317-572-3986,

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Jossey-Bass also publishes its books in a variety of electronic formats. Some content that appears in

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Library of Congress Cataloging-in-Publication Data

Performance management : putting research into action / James W. Smither and Manuel

London, editors.

p. cm.—(The professional practice series)

Includes index.

ISBN 978-0-470-19232-0 (cloth)

1. Career development. 2. Employee motivation. I. Smither, James W. II. London,

Manuel.

HF5549.5.C35P45 2009

658.3'128—dc22 2009013926

Printed in the United States of America

fi rst edition

HB Printing 10 9 8 7 6 5 4 3 2 1

ffirs.indd viii 7/1/09 11:19:34 AM

The Professional Practice Series

SERIES EDITORS

Allan H. Church

PepsiCo Inc.

Janine Waclawski

Pepsi-Cola North America

EDITORIAL BOARD

Timothy T. Baldwin

Indiana University, Bloomington

Wayne F. Cascio

University of Colorado

Kenneth P. De Meuse

University of Wisconsin, Eau Claire

Jerry W. Hedge

Personnel Decisions Research Institute, Inc.

Catherine Higgs

Allstate Insurance Company

Kenneth Pearlman

Lucent Technologies

James W. Smither

LaSalle University

Scott I. Tannenbaum

State University of New York, Albany

ffirs.indd ix 7/1/09 11:19:35 AM

To Robin, Amy, Sean, and my parents

—JWS

To Marilyn, David, Jared

—ML

ffirs.indd x 7/1/09 11:19:35 AM

xi

Contents

Foreword xiii

Introduction xv

The Authors xxi

1 An Expanded View of Performance Management 1

Herman Aguinis

2 Aligning Performance Management with

Organizational Strategy, Values, and Goals 45

William A. Schiemann

3 Practical Applications of Goal-Setting Theory to

Performance Management 89

Peter A. Heslin, Jay B. Carson, and Don VandeWalle

4 Coaching and Performance Management: How

Can Organizations Get the Greatest Value? 115

David B. Peterson

5 The Role of On-the-Job and Informal Development

in Performance Management 157

Paul Squires

6 Managing Team Performance in Complex Settings:

Research-Based Best Practices 197

Eduardo Salas, Sallie J. Weaver, Michael A. Rosen, and

Kimberly A. Smith-Jentsch

7 CEO Performance Management 233

Edward M. Mone

8 Performance Management in Multi-National

Companies 271

David V. Day and Gary J. Greguras

ftoc.indd xi 7/1/09 11:19:01 AM

9 Managing Contextual Performance 297

Richard R. Reilly and Zvi H. Aronson

10 Using Performance Management As a Learning Tool 329

Valerie I. Sessa, Christopher Pingor, and Jennifer Bragger

11 Diagnosing, Understanding, and Dealing with

Counterproductive Work Behavior 359

Leanne Atwater and Teri Elkins

12 Forced Rankings: Pros, Cons, and Practices 411

Peter G. Dominick

13 Technology and Performance Management:

What Role Does Technology Play in Performance

Management? 445

Autumn D. Krauss and Lori Anderson Snyder

14 Authentic Performance: The Valuation of Behavior

as a Negotiated Business Outcome 491

Thomas Diamante

15 Assessing Performance Management Programs

and Policies 527

Stanley B. Silverman and Wendy M. Muller

16 Performance Management of the Future 555

Nancy T. Tippins and Susan H. Coverdale

17 Best Practices in Performance Management 585

James W. Smither and Manuel London

Name Index 627

Subject Index 645

The Editors 667

xii Contents

ftoc.indd xii 7/1/09 11:19:02 AM

xiii

Foreword

Performance management is one of the cornerstones of Human

Resource practice in organizations. No matter where you work,

how big or small your organization or how simple or complex

the business model, effective performance management is a key

requirement if you have any number of employees. It all begins

with performance management. Specifi cally, what are the jobs

we need our employees to do, how do we measure their perfor￾mance in these jobs, and how do we design and implement sys￾tems to reinforce performance standards that have been set?

So, before an organization can even begin to think about the

more lofty practice areas like individual assessment, talent man￾agement, or succession planning it must be able to nail the basics

of measuring day-to-day performance. Organizations who set

their sights on hiring the best and the brightest and building a

diverse work force must fi rst have a crystal clear understanding

of what they are hiring people to do and how the will be deemed

successful or not. Companies desiring to offer the very best train￾ing and development or organization development programs

must fi rst be able to assess the requirements of the jobs for which

they are training and developing their leaders and managers.

That is why this topic and this volume are so critical to HR,

I/O and OD practitioners alike. It is also one of the reasons why

Janine and I reached out to Jim and Manny to commission this

edition for the SIOP Professional Practice series. Both are excel￾lent researchers, professionals, authors, and editors. Moreover,

Jim's prior SIOP Professional Practice edition on performance

appraisal from 1998 was very popular and we wanted them to

take the discussion to the next level. With this volume we feel

that they certainly have accomplished this mission. Whether it’s

very current issues such as the Sarbanes-Oxley Act (SOX), CEO

performance management and the role of the Board of Directors

flast.indd xiii 7/1/09 11:20:20 AM