The Evolution of Performance Management: Searching for Value

Abstract

This article reviews the history of performance management (PM), beginning with performance evaluation. We discuss various strategies that have been used to enable accurate ratings as well as cognitive processes and contextual factors that have been shown to significantly impact ratings. We raise questions about the concept of true performance and whether raters can be enabled and motivated to make accurate ratings. We progress to discussing more structured and comprehensive PM processes that typically involve cascading goals, goal setting, competency modeling, evaluation of behavior and results, and implementation. These systems have proven to be tedious and low-value, resulting in unprecedented, wide-spread experimentation with innovative practices to move companies away from heavy PM processes to simpler, cost-effective strategies that actually drive performance. These have ranged from abandoning ratings to implementing innovations in goal-setting, real-time feedback, coaching, and PM behavior change. Directions for future research and practice are discussed.

Performance management in the year of COVID-19: Carpe diem

“…For many years human resources leaders have been working on visualizing more efficient and effective ways to manage performance. Although I-O practitioners may differ on the nuances, there is today a strong consensus on what good practice looks like: Simpler administration; regular, supportive, helpful, motivating performance conversations all year long; evaluations that don't rest solely on the retrospective view over an entire year's performance of the manager alone; greater clarity for employees on expectations and greater corresponding commitment from employees to exceed those expectations (Aguinis, 2019;Pulakos et al 2019).…”

“…There has recently been a groundswell of dissatisfaction with performance management (e.g., Buckingham & Goodall, 2019). In the very first volume of this journal, Murphy (2008) documented and bemoaned the lack of progress in improving performance management design and execution.Coming out of his and other critiques (Pulakos et al, 2019), various sound ideas have emerged for improving performance management processes. These include radical simplification (Efron & Ort, 2010); incorporating more of a future-rather than past-focus (Buckingham & Goodall, 2015); abandoning forced distributions (Ledford et al, 2016); improving relevant manager training and strengthening managerial accountability for effective performance management (e.g., Mone & London, 2010); collecting performance feedback from multiple sources (Campion et al, 2019); and, perhaps most importantly, stressing ongoing performance conversations as a -perhaps the key-element in managing performance (Pulakos et al, 2015; see Pulakos et al, 2019;Aguinis, 2019, for comprehensive scholarly and popular treatments, respectively).…”

What is meaningful research and how should we measure it?

“…also Shore and Wright 2000). In their review on the evolution of performance management, Pulakos et al (2019) come to the conclusion that "formal performance management processes disengage employees, cost millions, and have no impact on performance". In the context of taxpayer honesty, Kucher and Götte (1998) have shown that observing tax laws and regulations is not just a matter of how strictly taxpayers are controlled.…”

Behavioral Drivers of Performance in Public-Sector Organizations: A Literature Review

“…However, managing performance at micro level, particularly at public employee and organization level, is a least explored arena in public-sector research (Dooren et al, 2015;Pulakos et al, 2019).…”

“…While many studies have demonstrated that improvements in the measurement system will lead to improvements in the performance of a public-sector organization, the results are still mixed (Arnaboldi et al, 2015). The literature mostly discusses performance measurement issues, challenges, indicators, content, or performance management in terms of performance information, goal clarity, and budgeting (e.g., Gao, 2015;Kroll, 2015;Mauro et al, 2016;Pandey, 2015;Pulakos et al, 2019).…”