EFFECTIVE PRACTICE GUIDELINES Performance Management A roadmap for developing, implementing and evaluating performance management systems Elaine D. Pulakos

E F F E C T I V E P R A C T I C E G U I D E L I N E S
Performance
Management
A roadmap for developing,
implementing and evaluating
performance management systems
Elaine D. Pulakos

E F F E C T I V E P R A C T I C E G U I D E L I N E S
Performance
Management
A roadmap for developing,
implementing and evaluating
performance management systems
Elaine D. Pulakos

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.
©2004 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
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Contributions to the SHRM Foundation are tax-deductible.
For more information, please contact the SHRM Foundation at 703-535-6020. Online atwww.shrm.org/foundation.

Forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v
Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii
About the Author . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix
Effective Practice Guidelines for Performance Management . . . . . . . . . . . . . . . . . . . . . 1
Methodology for Developing Practice Guidelines . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Overview of the Performance Management Process . . . . . . . . . . . . . . . . . . . . . . . . 2
Performance Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Ongoing Feedback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Employee Input . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Performance Evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Performance Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Ensure Alignment with Other HR Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Get Organizational Members on Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Communicate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Automate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Pilot Test . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Train Employees and Managers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Evaluate and Improve . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Legal Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Summary and Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Sources and Suggested Readings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
iii
Table of Contents

The SHRM Foundation Board of Directors appreciates how difficult it is for HR
practitioners to access current research findings and incorporate them into their own
human resource practices.
Human resource professionals juggle multiple responsibilities and do not have time to
read long research reports, no matter how beneficial. Realistically, most HR practition-
ers will seek guidance from research findings only if they are presented in a clear, con-
cise and usable format.
To make research more accessible, the SHRM Foundation has created a new series
entitled Effective Practice Guidelines. The Foundation will publish new reports on dif-
ferent HR topics each year. You are now reading the first report in the series:
Performance Management.
Here is the series concept: A subject matter expert with both research and practitioner
experience is selected to prepare the guidelines and the author distills the research find-
ings and expert opinion into specific advice on how to conduct effective HR practice.
We believe this new product presents relevant research-based knowledge in an easy-to-
use format. We look forward to your feedback to let us know if we’ve achieved that goal.
The author of Performance Management is Dr. Elaine Pulakos, executive vice president
and director of the Personnel Decisions Research Institutes (PDRI) Washington, D.C.
office. Dr. Pulakos is one of the country’s leading experts in performance management,
both as a researcher and a consultant, and she has provided the very best guidance
available on this topic.
The Foundation board recently created a new vision for the organization: “The
SHRM Foundation maximizes the impact of the HR profession on organizational
decision-making and performance, by promoting innovation, research and the use of
research-based knowledge.”
We are confident that this new series of Effective Practice Guidelines takes us one step
closer to making that vision a reality.
Herbert G. Heneman III, Ph.D.
Director of Research, SHRM Foundation Board
Professor, School of Business, University of Wisconsin-Madison
v
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