Summary Points _Managers must possess several important skills to manage the performance of their employees effectively. Managers need to serve as coaches, to observe and document performance accurately, to give both positive and negative feedback, and to conduct performance review meetings. _Coaching is an ongoing process in which the manager directs, motivates, and rewards employee behavior. Coaching includes several key functions such as giving advice about what is expected about performance and how to perform well, giving employees guidance so employees know how to improve their performance, providing employees with support without being controlling, and enhancing employees’ confidence and competence. Coaching must be based on a helping and trusting relationship. This is particularly important when the supervisor and the subordinate do not share similar cultural backgrounds. _Managers need to engage in a complex set of behaviors to perform the various coaching functions. These include the following: establish developmental objectives, communicate effectively, motivate employees, document performance, give feedback, diagnose performance problems, and develop employees. _Managers’ personalities and behavioral preferences determine their coaching style. Some managers prefer to be drivers and just tell employees what to do. Others prefer to be persuaders and try to sell what they want the employees to do. Yet others adopt an amiable style in which feelings take precedence and urge the employee to do what feels right or what the employee feels is the right way to do things. Finally, others prefer to be analyzers and have a tendency to follow rules and procedures in recommending how to perform. None of these four styles is necessarily better than the others. The best coaches are able to change their styles and adapt to the needs of the employees. _The coaching process is ongoing and cyclical, and it includes the following five components: (1) setting developmental goals, (2) identifying the resources and strategies needed to achieve the developmental goals (e.g., securing resources that will allow employees to engage in activities to achieve their developmental goals), (3) implementing strategies (e.g., enrolling the employee in an online course), (4) observing and documenting developmental behaviors (e.g., checking on the progress of the employee toward the attainment of his developmental goals), and (5) giving feedback (e.g., providing information to the employee that will help him adjust his current developmental goals and guide his future goals). _Observing and documenting performance in general and performance regarding developmental goals in particular are not as easy as it may seem. Time constraints can play a role when managers are too busy to gather performance information. Situational constraints may prevent managers from observing the employee directly. Finally, activity constraints may be a factor; when developmental activities are ...

1. Summary Points
_Managers must possess several important skills to manage the
performance of their employees effectively. Managers need to
serve as coaches, to observe and document performance
accurately, to give both positive and negative feedback, and to
conduct performance review meetings.
_Coaching is an ongoing process in which the manager directs,
motivates, and rewards employee behavior. Coaching includes
several key functions such as giving advice about what is
expected about performance and how to perform well, giving
employees guidance so employees know how to improve their
performance, providing employees with support without being
controlling, and enhancing employees’ confidence and
competence. Coaching must be based on a helping and trusting
relationship. This is particularly important when the supervisor
and the subordinate do not share similar cultural backgrounds.
_Managers need to engage in a complex set of behaviors to
perform the various coaching functions. These include the
following: establish developmental objectives, communicate
effectively, motivate employees, document performance, give
feedback, diagnose performance problems, and develop
employees.
_Managers’ personalities and behavioral preferences determine
their coaching style. Some managers prefer to be drivers and
just tell employees what to do. Others prefer to be persuaders
and try to sell what they want the employees to do. Yet others
adopt an amiable style in which feelings take precedence and
urge the employee to do what feels right or what the employee
feels is the right way to do things. Finally, others prefer to be
analyzers and have a tendency to follow rules and procedures in
recommending how to perform. None of these four styles is
necessarily better than the others. The best coaches are able to
change their styles and adapt to the needs of the employees.
_The coaching process is ongoing and cyclical, and it includes

2. the following five components: (1) setting developmental goals,
(2) identifying the resources and strategies needed to achieve
the developmental goals (e.g., securing resources that will allow
employees to engage in activities to achieve their
developmental goals), (3) implementing strategies (e.g.,
enrolling the employee in an online course), (4) observing and
documenting developmental behaviors (e.g., checking on the
progress of the employee toward the attainment of his
developmental goals), and (5) giving feedback (e.g., providing
information to the employee that will help him adjust his
current developmental goals and guide his future goals).
_Observing and documenting performance in general and
performance regarding developmental goals in particular are not
as easy as it may seem. Time constraints can play a role when
managers are too busy to gather performance information.
Situational constraints may prevent managers from observing
the employee directly. Finally, activity constraints may be a
factor; when developmental activities are unstructured, such as
reading a book, the manager may have to wait until the activity
is completed to assess whether any new skills and knowledge
have been acquired.
_Observation and documentation of performance can be
improved in several ways. These issues, which were described
in detail in Chapter 7, include implementing a good
communication plan that managers accept and establishing
training programs that help managers minimize rater errors (i.e.,
rater error training); share notions of what it means to complete
developmental activities successfully (i.e., frame-of-reference
training); observe performance more accurately (i.e., behavioral
observation training); and become more confident about
managing employee performance (i.e., self-leadership training).
_Documenting an employee’s progress toward achieving
developmental goals and improving performance in general has
several important benefits. These include the reduction of the
manager’s cognitive load, the enhancement of trust between the
employee and the manager, the collection of important input to

3. be used in planning developmental activities in the future, and
the development of a good line of defense in case of litigation.
_For documentation to be most useful, it must be specific, use
adjectives and adverbs sparingly, balance positives with
negatives, focus on job-related information, be comprehensive,
be standardized across employees, and be stated in behavioral
terms.
_Feedback about performance in general and about
developmental activities in particular serves several important
purposes. These include building employee confidence,
developing employee competence, and enhancing employee
involvement with the unit and the organization as a whole.
_The mere presence of feedback does not mean that there will
be positive effects on future performance. For feedback to be
most useful, it must be timely, frequent, specific, verifiable,
consistent over time and across employees, given in private, and
tied closely to consequences (e.g., rewards); address description
first and evaluation second; discuss performance in terms of a
continuum and not in terms of dichotomies (i.e., more and less
and not all or nothing); address patterns of behavior and not
isolated events; include a statement that the manager has
confidence in the employee; and include the active participation
of the employee in generating ideas about how to improve
performance in the future.
_In general, managers do not feel comfortable about giving
negative feedback. They may fear that employees will react
negatively because they themselves have been given negative
feedback in the past in a way that was not helpful and do not
want to put their employees in the same situation, because they
don’t like playing god, or because they think they need to
collect an onerous amount of information and evidence before
giving negative feedback. When negative feedback is warranted,
however, and managers refuse to give it, poor performers may
get the message that their performance is not that bad.
Eventually, the situation may escalate to the point that the
manager has no choice but to give negative feedback; the

4. situation then becomes punitive, and feedback is not likely to be
useful. For negative feedback to be useful, it must be given
early when the performance problem is still manageable.
_Supervisors play the paradoxical roles of judge and coach at
the same time. These roles are assumed during the performance
review meetings, which can include as many as six separate
formal meetings: system inauguration, self-appraisal, classical
performance review, merit/salary review, developmental plan,
and objective setting. In most organizations, these meetings are
merged into one or two meetings. It is most effective to separate
the meetings so that employees can focus on one issue at a time
(e.g., supervisor’s view on the employee’s performance,
rewards allocation, developmental plan).
_In some cases, an employee may be unwilling or unable to
overcome performance problems. When that happens, there is a
need to implement a formal disciplinary process including a
verbal warning, followed by a written warning, and eventually,
if needed, termination. When implementing a disciplinary
process, supervisors must be aware of several pitfalls including
the acceptance of poor performance, failing to get the message
through, arguments that performance standards are unfair or
unrealistic, employee and supervisor emotional reactions, and
the failure to consult with HR.
_The termination meeting creates important challenges and is
extremely unpleasant for both the employee and supervisor. For
termination meetings to be more effective and less painful,
supervisors must (1) be respectful, (2) get right to the point, (3)
wish the employee well, (4) send the employee to HR (or offer
information based on the advice of outside counsel), (5) have
the employee leave immediately, and (6) conduct the
termination meeting at the end of the day. Overall, all
employees deserve to be treated with dignity and respect, even
those who are being terminated.
_When all the performance review meetings are merged into
one, the components of such a meeting include the following:
(1) explanation of the purpose of the meeting, (2) self-appraisal,

5. (3) discussion of the supervisor’s performance ratings and
rationale and resolution of discrepancies with self-appraisal, (4)
developmental discussion, (5) employee summary, (6) rewards
discussion, (7) setting up follow-up meeting, (8) approval and
appeals process discussion, and (9) final recap.
_In meeting with the supervisor to discuss performance issues,
employees may become defensive. Defensiveness is indicated
by a fight-or-flight response. The supervisor can minimize
defensiveness by (1) establishing and maintaining rapport, (2)
being empathetic, (3) observing verbal and nonverbal cues, (4)
minimizing threats, and (5) encouraging employee participation.
_When defensiveness becomes unavoidable, the employee’s
attitude must be recognized and allowed expression. If the
situation becomes intolerable, the meeting may be interrupted
and rescheduled for a later time.
CASE STUDY 9-1 Was Robert Eaton a Good Coach?
Robert Eaton was CEO and chairman of Chrysler from 1993 to
1998, replacing Lee Iacocca who retired after serving in this
capacity since 1978. Eaton then served as cochairman of the
newly merged DaimlerChrysler organization from 1998 to 2000.
With 362,100 employees, DaimlerChrysler achieved revenues of
EUR 136.4 billion in 2003. DaimlerChrysler’s passenger car
brands include Maybach, Mercedes-Benz, Chrysler, Jeep,
Dodge, and Smart. Commercial vehicle brands include
Mercedes-Benz, Freightliner, Sterling, Western Star, and Setra.
From the beginning of his tenure as CEO, Eaton communicated
with the people under him. He immediately shared his plans for
the future with his top four executives and then took the advice
of his colleague, Bob Lutz, to look around the company before
making any hasty decisions concerning the state of affairs at
Chrysler. Eaton and Lutz ascertained that Chrysler was
employing the right staff and that they did not need to hire new
people; they just had to lead them in a different manner, that is,
in a more participative style.
Eaton listened to everyone in the organization, including
executives, suppliers, and assembly-line workers, to determine

6. how to help the company succeed. Eaton also encouraged the
employees at Chrysler to talk with one another. The atmosphere
of collaboration and open-door communication between Eaton
and Lutz (the two men sat across the hall from one another and
never closed their doors) permeated the entire organization.
Eaton and Lutz’s walk-around management style indicated to
employees that they were committed to and engaged in the
organization. Furthermore, Eaton and Lutz held meetings with
their executive team on a regular basis to exchange ideas and
information from all areas of the organization.
Eaton even reorganized the manner in which Chrysler designed
cars based on a study, previously disregarded by Iacocca, that
indicated that Chrysler needed to be more flexible and its
executives needed to be in constant communication with the
product design team. One employee was quoted as saying, “Bob
Eaton does not shoot the messenger when he hears something he
doesn’t like or understand. He knows that not every idea is
right. But Bob is off-the-wall himself…. He’ll say something,
and we’ll tell him that it’s a crazy idea…. He may not change
his mind in the end, but he’ll spend the time explaining to you
what is behind his thought processes. Do you know what kind of
confidence that inspires?” This type of open communication at
the top proved extremely successful, as summed up by one
designer: “It’s a system that recognizes talent early and rewards
it, and that creates a sense of enthusiasm for your work, and a
sense of mission.”
Another program that Eaton describes as empowering employees
at Chrysler includes requiring all employees, including
executives, to participate in the process of building a new
vehicle. Eaton explains that this shows all of the employees in
the plant that executives are concerned about the proper
functioning of new cars, and it gives executives the opportunity
to understand and solve problems at the factory level. Eaton
states, “When we’re done with our discussions, these guys know
where we want to go and how we want to get there, and they go
back and put the action plans together to do that. This goes for

7. every single thing we do.” He concludes, “Clearly at a company
there has to be a shared vision, but we try to teach people to be
a leader in their own area, to know where the company wants to
go, to know how that affects their area, to benchmark the best in
the world, and then set goals and programs to go after it. We
also encourage people not only to go after the business plan
objectives but to have stretch goals. And a stretch goal by
definition is a fifty-percent increase …. If we go after fifty
percent, something dramatic has to happen. You have to go
outside of the box.”
Based on the above description, please evaluate Bob Eaton’s
coaching skills using the accompanying table. If a certain
coaching behavior or function is missing, please provide
recommendations about what he could have done more
effectively.
Major Functions
Present? (Y/N)
Comments/Recommendations
Give advice
Provide guidance
Give support
Give confidence
Promote greater competence
Key Behaviors
Present? (Y/N)
Comments/Recommendations

8. Establish development objectives
Communicate effectively
Motivate employees
Document performance
Give feedback
Diagnose performance problems
Develop employees
Source: Based on information provided by M. Puris, Comeback:
How Seven Straight-Shooting CEOs Turned Around Troubled
Companies (New York: Times Books, 1999), 80–118,
specifically Chap. 4, “Robert Eaton and Robert Lutz; The
Copilots.”
(Aguinis 253-257)
Aguinis, Herman. Performance Management, 3/e VitalSource
ebook for Laureate Education. Pearson Learning
Solution

9. s, 06/2012. VitalBook file.
The citation provided is a guideline. Please check each citation
for accuracy before use.
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