Introduction 1
About This Book 2
Foolish Assumptions 3
Icons Used in This Book 3
Beyond the Book 3
Where to Go from Here 4
Part 1: Getting Started with Performance Management 5
Chapter 1: Introducing Performance Management 7
Why Do You Need Performance Management? To Succeed (of Course) 8
Why performance management is alive and well 8
Imagining an organization without performance management 10
Making Performance Management Work in Your Business 10
Distinguishing performance management from performance appraisal 10
Adapting performance management to today’s reality 11
Adapting performance management for different generations 14
Designing and Implementing a Performance Management System 14
Step 1: Establishing prerequisites 15
Step 2: Planning performance 20
Step 3: Executing performance 22
Step 4: Assessing performance 23
Step 5: Reviewing performance 25
Chapter 2: Making the Case for Performance Management 29
Using Performance Management to Achieve Multiple Purposes 30
Strategic objectives 30
Administrative objectives 30
Informational objectives 30
Developmental objectives 31
Organizational maintenance objectives 31
Documentation objectives 33
Answering the “What’s in It for Me” Question 33
Convincing top management of performance management’s value 34
Building support in the entire organization 34
Realizing the awesome benefits of performance management 36
What an Ideal Performance Management System Looks Like 39
Contextual issues: Making everything fit 39
Practical issues: Striving for effectiveness and fairness 41
Technical issues: Sweating the details 42
Taking Care of Talent Management Functions 45
Training and development 45
Workforce planning 46
Compensation 46
Chapter 3: Designing and Implementing Effective Performance Management 47
Ensuring Performance Management Delivers Strategic Value 48
Key ingredients of a strategic recipe 48
Making performance management strategic 49
Developing Performance Management Leadership Skills 50
Becoming an effective coach 51
Giving effective feedback 52
Defining and Measuring Performance 54
Measuring performance as behaviors 55
Measuring performance as results 55
Developing Employee Performance 56
Creating development plans 56
Implementing development plans 57
Assessing Performance Management Effectiveness 57
Using quantitative measures 58
Using qualitative measures 58
Chapter 4: Anticipating and Minimizing Negative Consequences 61
Anticipating Damage Caused by Flawed Performance Management 63
Damage caused to employees 63
Damage caused to managers 63
Damage caused to relationships 63
Damage caused to the organization 64
Learning from Flawed Performance Ratings 64
Why Performance Ratings Are Here to Stay 65
Setting Up an Appeals Process 66
Dealing with judgmental and administrative issues 66
Setting up a three-level appeals process 67
Setting Up a Communication Plan and Dealing with Resistance to Change 70
Questions that your communication plan should answer 70
Dealing with cognitive biases 73
Part 2: Designing an Effective Performance Management System 77
Chapter 5: Delivering Strategic Business Results 79
Linking Performance Management with Strategic Business Objectives 80
Making sure the strategic plan does what it is supposed to do 80
Making sure HR does what it is supposed to do 84
Conducting an External and Internal Analysis of Strengths, Weaknesses, Opportunities, and Threats 86
Analyzing the external environment 86
Analyzing the internal environment 88
Conducting a gap analysis 89
Creating and Understanding Your Organization’s Mission and Vision 91
Creating your mission 91
Creating your vision 91
Setting Up Objectives and Strategies Based on Your Mission and Vision 94
Setting up objectives 95
Setting up strategies 96
Linking Your Organization’s and Unit’s Strategic Plans with Job Descriptions 96
Linking the strategy of the organization and its units 97
Linking the organization and units with job descriptions 98
Chapter 6: Becoming a Performance Management Leader 101
Becoming an Effective Coach 101
Four guiding principles of effective coaches 102
Seven behaviors of effective coaches 103
Understanding your coaching style 105
Observing and Documenting Performance 106
Why documenting performance is so important 108
Documenting performance accurately 109
Giving Feedback Effectively 110
Making sure feedback serves a purpose 110
Avoiding the very high cost of NOT providing feedback 111
Making sure feedback is beneficial 112
An example of effective feedback 113
Giving praise 115
An example of effective praise 115
Giving constructive feedback 116
Giving feedback to Millennials, Post Millennials, and Baby Boomers 118
Chapter 7: Defining Performance 121
Performance is All about Behaviors and Results 121
Defining performance as behaviors 122
Defining performance as results 123
Causes for Excellent and Poor Performance 123
How individual differences affect performance 124
How knowledge and skills affect performance 126
How context affects performance 127
Anticipating performance problems 129
Focusing on Four Different Performance Dimensions 130
Task and contextual performance 131
Key differences between task and contextual performance 133
Counterproductive performance 134
Adaptive performance 136
When to Define Performance as Behaviors or Results and Why 137
When to define performance as behaviors 137
When to define performance as results 138
Chapter 8: Measuring Performance as Results 143
Measuring Performance as Results 143
Determining accountabilities and their importance 144
Determining objectives 146
Choosing a Measurement System Congruent with Context 149
Considering the role of organizational culture 149
Considering the role of industry trends 150
Considering the role of leadership 150
Chapter 9: Measuring Performance as Behaviors 151
Measuring Competencies 151
Measuring two types of competencies 152
Describing competencies 154
Measuring Behaviors Using Comparative Systems 155
Rank order 155
Alternation rank order 155
Paired comparisons 156
Relative percentile 156
Forced distribution 156
Considering Advantages and Disadvantages of Comparative Systems 158
Anticipating problems caused by forced distributions 159
Understanding the shape of the performance distribution and producing star performers 161
Measuring Behaviors Using Absolute Systems 163
Essays 163
Behavior checklists 164
Using a graphic rating scale system 169
Chapter 10: Using Performance Management Analytics 173
The Jury is Out: All Firms Collect Performance Data 174
Why all organizations collect performance data 174
Setting the evaluation period 176
Including Critical Components in Effective Performance Appraisal Forms 177
Saying goodbye to paper performance evaluation forms 177
Nine critical components of effective evaluation forms 177
Evaluating the components of a sample evaluation form 179
Including Critical Characteristics to Make Evaluation Forms Effective 182
Eight critical characteristics of effective evaluation forms 183
Evaluating the characteristics of a sample evaluation form 184
Computing Overall Performance Score 185
Using judgmental and mechanical procedures to compute overall score 185
Using Multiple Performance Touchpoints 189
Using supervisors 189
Using peers 190
Using direct reports 191
Using employees themselves 192
Using customers 193
Using electronic performance monitoring 193
Chapter 11: Minimizing Rating Distortion 197
Dealing with Disagreements across Performance Touchpoints 197
Why disagreements across performance touchpoints is not always a problem 198
Dealing with disagreements when giving feedback 198
Minimizing Intentional Rating Distortion 199
Understanding rater motivation 199
Why raters inflate ratings 200
Why raters deflate ratings 201
Increasing accountability in performance ratings 202
Minimizing Unintentional Rating Distortion 203
Designing rater error training 203
Designing frame of reference training 206
Designing behavioral observation training 208
Part 3: Implementing Performance Management Effectively 209
Chapter 12: Creating and Implementing Personal Development Plans 211
Creating Personal Development Plans 211
Using development plans to answer four key career questions 212
Using development plans to improve your short- and long-term career goals 212
Using development plans for succession planning 214
Setting your development plan objectives 214
Setting the content of your development plan 216
Setting the activities of a development plan 218
Facilitating Employee Development 221
Performing five functions in the development process 223
Using the feedforward interview 223
Motivating supervisors to facilitate employee development 225
Using Multisource Feedback Systems in Implementing Development Plans 227
Maximizing benefits of multisource feedback systems 228
Minimizing risks of multisource feedback systems 229
Deciding whether a multisource feedback systems will work in your organization 230
Implementing a state-of-the-science multisource feedback system 231
Chapter 13: Conducting Effective Review, Disciplinary, and Termination Meetings 233
Conducting Effective Review Meetings 234
Setting up review meetings 234
Implementing an optimal sequence for review meetings 236
Dealing with employee defensiveness 238
Making the Tough Calls: Disciplinary Process and Organizational Exit 241
Offering decision-making leave 241
Avoiding five common pitfalls in the disciplinary process 243
Dealing with terminations 244
Chapter 14: Implementing Team Performance Management 247
Not All Teams Are Created Equal 248
Reasons why teams exist in all organizations 248
Designing a State-of-the Science System 249
Anticipating dangers of poorly designed systems 250
Setting necessary conditions for an effective system 251
Implementing a system for virtual teams 251
Accountability as a key purpose of team performance management 254
Implementing a State-of-the-Science System 255
Step 1: Establishing prerequisites 257
Step 2: Performance planning 259
Step 3: Performance execution 260
Step 4: Performance assessment 261
Step 5: Performance review 263
Connecting team performance management with team rewards 265
Chapter 15: Evaluating Your System 269
Pilot Testing the Performance Management System 269
Reasons for doing a pilot test 270
Selecting the pilot test group 270
Ongoing Monitoring and Evaluation of the Performance Management System 271
What to measure 272
How to measure 273
Part 4: Connecting Performance Management with Rewards and the Law 275
Chapter 16: Offering Financial and Nonfinancial Rewards 277
Not All Rewards are Created Equal 278
Financial rewards 278
Nonfinancial rewards 278
Different Types of Financial Rewards 278
Base pay 278
Cost-of-living adjustments and contingent pay 279
Short-term incentives 279
Long-term incentives 280
Income protection 281
Allowances 281
Different Types of Nonfinancial Rewards 282
Relational 282
Work-life focus 283
Linking Performance Management with Different Types of Rewards 283
Rewards with low dependency on performance management 284
Rewards with high dependency on performance management 284
Rewards with moderate dependency on performance management 285
Chapter 17: Setting Up an Effective Pay System 287
Setting Up Traditional and Contingent Pay Plans 287
Traditional pay plans 288
Contingent pay plans 289
Implementing Contingent Pay Plans 289
The benefits of CP plans 290
Reasons why contingent pay plans fail 291
Selecting a Contingent Pay Plan 294
Traditional versus involvement cultures 295
Strategic direction 296
What pay can and cannot do about improving performance 297
Turning recognition and other nonfinancial incentives into rewards 301
Chapter 18: Staying on the Right Side of the Law 305
Implementing the Golden Rule 306
Implementing the golden rule around the world 306
When the golden rule breaks down 306
Six Legal Principles Affecting Performance Management 307
Employment at will 307
Negligence 308
Defamation 309
Misrepresentation 310
Adverse impact/unintentional discrimination 311
Illegal discrimination/disparate treatment 311
Laws Affecting Performance Management 313
Laws affecting performance management around the world 314
Lawful performance management in global organizations 315
Putting it all together: A legally defensible performance management system 315
Part 5: The Part of Tens 317
Chapter 19: Ten Reasons for Implementing Effective Performance Management 319
Six Useful Purposes 319
Self-Insights, Development, Motivation, and Self-Esteem 320
Better Understanding of Job Requirement 320
More Employee Engagement and Voice Behavior 321
Improved Commitment and Decreased Turnover 321
Early Detection of Performance Declines and Less Employee Misconduct 321
Differentiation between Good and Poor Performers 322
Common Understanding of What is Good Performance 322
More Fair and Legally Defensible Administrative Decisions 322
Easier Organizational Change 323
Chapter 20: Ten Key Factors for Delivering Outstanding Results 325
Congruence with Strategy and Context 325
Thoroughness and Inclusiveness 326
Meaningfulness 326
Practicality 327
Reliability, Validity, and Specificity 327
Identification of Effective and Ineffective Performance 327
Standardization and Thoroughness 328
Openness 328
Correctability 328
Acceptability, Fairness, and Ethicality 329
Chapter 21: Ten Tips for Becoming a Great Performance Management Leader 331
Become an Effective Coach 331
Develop a Good Coaching Relationship and Facilitate Employee Growth 332
Understand Your Own Coaching Style 332
Make the Employee the Director of Change 333
Learn How to Evaluate Performance Accurately 333
Document Performance Accurately 333
Give Feedback Effectively 334
Conduct Effective Performance Review Meetings 334
Be Fair and Direct in the Disciplinary Process 335
Be Fair and Direct in the Termination Process 335
Index 337
