Performance management performance manag

1. PERFORMANCE MANAGEMENT
PERFORMANCE
MANAGEMENT
FOU RTH EDITION
Herman Aguinis
School of Business
George Washington University
CHICAGO
BUS I NES S PRESS
CHlCAGO
I USit4tlS
© 2019 CHICAGO BUSINESS PRESS
PERFORMANCE MANAGEMENT, FOURTH EDITION

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Print Ed ition ISBN-13: 978-0-9988140-8-7
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BRIEF CONTENTS
Part I STRATEGIC AND GENERAL CONSIDERATIONS 1
1 Performance Management in Context 3
2 Performance Management Process 41
3 Performance Management and Strategic Planning 67
Part II SYSTEM IMPLEMENTATION 97
4 Defining Performance and Choosing a Measuremen t
Approach 99
5 Measuring Results and Beh aviors 123
6 Performance Analytics 153
7 Rolling Out the Performance Management System 197
Part Ill EMPLOYEE AND LEADERSH IP DEVELOPMENT 223

3. 8 Performance Management and Employee Developmen t 225
9 Performance Management Leadership 257
Part IV REWARD SYSTEMS, LEGAL ISSUES, AND TEAM
PERFORMANCE
MANAGEMENT 299
10 Performance Management, Rewards, and the Law 301
11 Team Performance Management 343
Name and Company Index 371
Subjed Index 375
v
DEDICATION
vi
To my daughters Hannah Miriam and Naomi Rebecca, and my
wife Heidi, whom I love
and admire and are my superb coaches on how to become a
better father and husband
CONTENTS
Part I
Preface and Introduction xiii
Acknowledgments xxiii
About the Author xxiv
STRATEGIC AND GENERAL CONSIDERATIONS 1

4. 1 Performance Management in Context 3
1-1 Definition of Performance Management 4
1-2 Purposes of Performance Management Systems 6
1-2-1 Stra tegic P urpose 6
1-2-2 Administrative Purpose 6
1-2-3 Informationa l P urpose 7
1-2-4 Developmental Purp ose 7
1-2-5 Organizational Maintenance Purpose 8
1-2-6 Documentation Purpose 8
1-3 The Performance Management Contribution 10
1-4 When Performance Management Breaks Down: Dangers of
Poorly
Implemented Systems 14
1-4-1 Perfo rmance Ratings: The Canary in the Coal Mine 16
1-5 Characteristics of an Ideal Performance Management
System 18
1-6 Integration with Other H uman Resources and Development
Activities 23
1-7 The Future is Now: Performance Management and the
Nature of Work
and Organizations Today 24
Summary points 26
Exercise 1-1Idea/ Versus Actual Perjormn11ce Management
System 29
Exercise 1-2 Distinguishing Perjorma11ce Management Systems
from Performance Appraisal Systems 31
Case Study 1-1 Perjormn11ce Manngemmt at Network

5. Solution
s, Inc. 34
Case Study 1-2 Perjormn11ce Management at a CRB, Inc. 36
Endnotes 37
2 Performance Management Process 41
2-1 Prerequisites 43
2-1-1 Stra tegic P lanning 43
2-1-2 Work Oob) Analysis 43
2-2 Performance Planning 52
2-2-1 Results 52
vii
viii Contents
2-2-2 Behaviors 52
2-2-3 Development Plan 53

6. 2-3 Performance Execution 54
2-4 Performance Assessment 56
2-5 Performance Review 57
Summary points 59
Exercise 2-1 Work (job) Analysis 61
Exercise 2-2 Peiformance Review Meeting 62
Case Study 2-1 Disrupted Links in the Performance
Management Process at Omega, Inc. 63
Case Study 2-2 Performance Management at KS Cleaners 64
Endnotes 65
3 Performance Management and Strategic Planning 67
3-1 Definition and Purposes of Strategic Planning 68
3-2 Process of Linking Performance Management
to the Strategic Plan 69
3-3 Strategic Planning Process 73
3-3-1 Critical Role of the HR Function 73
3-3-2 External and Internal Environmenta l (i.e., SWOT}
Analysis 75
3-3-3 Mission 78
3-3-4 Vision 81
3-3-5 Objectives 83

7. 3-3-6 Stra tegies 84
3-3-7 Developing Strategic Plans at the Unit Level 85
3-3-8 Job Descriptions 86
3-4 Building Support and Answering the "What's in it for me"
Question 88
Summary points 90
Exercise 3-1 Linking brdividual with Unit and Organizational
Priorities 92
Exercise 3-2 Building Support for a Performance Management
System at the Gap, Inc. 92
Case Study 3-1 Evaluating Vision and Mission Statements at
PepsiCo 94
Case Study 3-2 Linking Peiformance Management to Strategy at
Procter & Gamble 95
Endnotes 96
Part II SYSTEM IMPLEMENTATION 97
4 Defining Performance and Choosing a Measurement Approach
99
4-1 Defining Performance: Behaviors and Results 100
4-2 Determinants of Performance: Abilities and Other Traits,
Knowledge and Skills,

8. and Context 101
4 -2-1 Abilities and Other Traits, and Knowledge and Skills 103
4 -2-2 Context 104
4 -2-3 Implications for Addressing and Anticipating
Performance Problems 105
4-3 Performance Dimensions 106
4-3-1 Task and Contextual Performan ce 106
4-3-2 Counterproductive Performance 109
4-3-3 Adaptive Performance 110
4-4 Approaches to Measuring Performance 112
4-4-1 Behavior Approach 112
4-4-2 Results Approach 113
Summary points 116
Exercise4-1 Do You Hnve Wlmt it Takes? Assessing your Own
Extreme Ownership 117
Exercise 4-2 Role Piny: Diagnosing Causes of Poor
Performance 118
Contents ix

9. Case Study 4-1 Differentiating Task from Contextual
Performance nt Plmrma Co. Company 119
Case Study 4-2 Choosing n Performance Measurement
Apprond1 nt Show Me the Money 119
Endnotes 121
5 Measuring Results and Behaviors 123
5-1 Measuring Results 124
5-1-1 Determining Accountabilities 125
5-1-2 Determining Objectives 126
5-1-3 Determining Performance Standa rds 128
5-2 Measuring Behaviors 129
5-2-1 Comparative Systems 132
5-2-2 Absolute Systems 138
5-3 The Role of Context 144
Summary points 145
Exercise 5-1 Measuring Competencies nt Midwestern United
States Department of Transporta tion 147
Exercise 5-2 Creating Behnviornlly Anchored Rating Scales
(BARS) for Evaluating Business Student
Performance in Team Projects 148

10. Case Study 5-1 Accountabilities, Objectives, nnd Standards at
Disney 149
Case Study 5-2 Evaluating Objectives nnd Standards at Disney
150
Endnotes 151
6 Performance Analytics 153
6-1 Useful Components of Appraisal Forms 155
6-2 Desirable Features of Appraisal Forms 165
6-3 Determining Overall Rating 168
6-4 Appraisal Period and Number of Formal Meetings 172
6-5 Performance Touch points: Sources of Performance Data
175
6-5-1 Supervisors 175
6-5-2 Peers 176
6-5-3 Direct Reports 177
6-5-4 Self 178
6-5-5 Customers 179
6-5-6 Employee Performance Monitoring and Big Data 179
6-5-7 Disagreement Across Sources of Performance Data: Is
This Really a P roblem? 182
6-6 Understanding Intentional Rating Distortion: A Model of
Rater Motivation 182

11. Summary points 186
Exercise 6-1 Choosing a Performance Appraisal Form Vendor
189
Exercise 6-2 Employee Performance Monitoring at Trtmgo:
Good or Bnd /den? 190
Case Study 6-1 Judgmental and Medmnica/ Methods of
Assigning Overn/1 Performance
Score nt The Daily Planet 192
Case Study 6-2 Minimizing Distortions in Performance Datn at
Expert Engineering, Inc. 193
Endnotes 194
x Con tents
7 Rolling Out the Perfo rman ce Management System 197
7-1 Communication Plan 198
7-1-1 Dea ling with Cognitive Biases and Resistance to Change
201
7-2 Appeals Process 203
7-3 Training Programs for M inimizing Unintentional Rating
Errors 206

12. 7-3-1 Rater Erro r Training 206
7-3-2 Frame of Reference Training 208
7-3-3 Behavioral Observation Training 210
7-4 Pilot Testing 211
7-5 Ongoing Monitoring and Evalu ation 212
Su mmary points 216
Exercise 7-1 Training Raters at Big Quality Care Center 218
Exercise 7-2 Proposing an Appeals Process for Nursing Homes
219
Case Study 7-1Implementing a Performance Mnnngement
Communication Plan nt Accounting, Inc. 220
Case Study 7-2 Implementing an Appeals Process at
Accounting, Inc. 220
Endnotes 221
Part Ill EMPLOYEE AND LEADERSHIP DEVELOPMENT 223
8 Pe rformance Management an d Employee Development 225
8-1 Personal Development Plans 226
8-1-1 Development Plan Objectives 228
8-1-2 Content o f Development Plan 229
8-1-3 Developmental Activities 231

13. 8-2 Direct Supervisor' s Role 234
8-3 Multisource Feedback Systems 238
8 -3-1 Benefits of Multisource Feedback Systems 244
8-3-2 Risks, Contingencies, a nd Pote ntial P itfalls in
Implemen ting Multisource Feedback
Systems 245
8 -3-3 Characteristics of a Good M u ltisource Feedback System
246
Su mmary points 248
Exercise 8-1 Making the Case for n Top-Notch Multisource
Feedbnck System Demo 251
Exercise 8-2 Obtnining Multisource Feedbnck on Your Own
Performance 251
Case Study 8-1 Content ofn Personnl Developmental Plnn at
Brainstorm, Inc. 252
Case Study 8-2Improving a Personal Development Plnn nt
Brainstorm, Inc.-Pnrt ll 253
Endnotes 254
9 Pe rformance Management Leadership 257
9-1 Coaching 258

14. 9-2 Coaching S tyles 263
9-3 Coaching Process 264
9-3-1 Observation and Documentation of Developmen tal Beh
aviors and Results 266
9-3-2 Giving Feedback 269
9-4 Coaching, Development, and Performance Review Meetings
282
Summary points 287
Exercise 9-1 What Is Your Coaching Style? 291
Exercise 9-2 Dealing with Defensiveness 293
Case Study 9-1 Was Robert En ton a Good Performance
Management Lender? 294
Contents xi
Case Study 9-2 Performnnce Manngement Leadership at Henry's
Commercial Sales and Leasing 295
Endnotes 296
Part IV REWARD SYSTEMS, LEGAL ISSUES, AND TEAM

15. PERFORMANCE
MANAGEMENT 299
10 Pe rformance Management, Rewards, and the Law 301
10-1 Definition o f Reward Systems 302
10-1-1 Base Pay 302
10-1-2 Cost-of-Living Adjustmen ts a nd Contingen t Pay 303
10-1-3 Sh o rt-Term Incentives 303
10-1-4 long-Term Incen tives 303
10-1-5 Income Pro tection 304
10-1-6 Work-Life Focus 305
10-1-7 Allowances 305
10-1-8 Relationa l (Intangible) Returns 306
10-2 Traditional and Contingent Pay Plans 307
10-3 Reasons for Introducing Contingent Pay Plans 308
10-4 Possible Problems Associated with Contingent Pay Plans
310
10-5 Selecting a Contingent Pay Plan 313
10-6 Putting Pay in Context 316
10-6-1 Turning Recognition and O the r Relation al Incen tives
into Rewa rds 318
10-7 Performance Management and the Law 321

16. 10-8 Some Legal Principles Affecting Performance Management
322
10-9 Laws Aff ecting Performance Management 325
Summary points 328
Exercise 10-1 Proposing a Contingent Pay Play for SOM
Architectural Firm 332
Exercise 10-2 Performance Management Mock Trial 332
Case Study 10-1 Contingency Pay Plan at Altenergy LLC 337
Case Study 10-2 Possible Illegal Discrimination at Tractors,
Inc. 338
Endnotes 339
11 Team Performance Management 343
11-1 Definition and Importance of Teams 344
11-2 Types of Teams and Implications for Team Performance
Management 346
11-2-1 Virtual Teams 348
11-3 Purposes and Challenges of Team Performance
Management 350
11-4 Including Team Performance in the Performance
Management System 351
11-4-1 Prerequisites 353
11-4-2 Perfom1an ce Planning 354

17. 11-4-3 Performan ce Execu tion 355
11-4-4 Performan ce Assessment 357
11-4-5 Performan ce Review 358
xii Contents
11-5 Rewarding Team Performance 360
Summary points 361
Exercise 11-1 Team Performance Management at Bose 363
Exercise 11-2 Team Performance Review 364
Case Study 11-1 Tenm Performance Mnnngement at American
Electric nnd Gas 366
Case Study 11-2 Tenm-Based Rewards for tire Stnte of Georgia
367
Endnotes 368
Name and Company Index 371
Subject Index 375
PREFACE AND INTRODUCTION

18. In today's globalized world, it is relatively easy to gain access
to the competi-
tion's technology and products. Thanks to the Internet and the
accompanying
high speed of communications, technological and product
differentiation is no
longer a key competitive advantage in most ind ustries. For
example, most banks
offer the same types of products (e.g., different types of savings
accounts and
investment opportunities). If a particular bank decides to offer a
new product
or service, such as an improved mobile phone app, it will not be
long until the
competitors offer precisely the same product. As noted by James
Kelley, former
performance management project leader at Idaho Power,
"Technology is a facilita-
tor, but not a guarantor, of effectiveness or efficiency of a
company's workforce." 1
So, what makes some businesses more successful than others?
What is today's
key competitive advantage? The answer is: people.
Organizations with engaged

19. and talented employees offering outstanding service to
customers pull ahead
of the competition, even if the products offered are similar to
those offered by
the competitors. This is a key organizational resource that many
label "human
capital" or "talent" and gives organizations an advantage over
the competi-
tion? Customers want to get the right answer a t the right time
and they want
to receive their products or services promptly and accurately.
Having the right
human capital can make these things happen. Only human
capital can produce
a sustainable competitive advantage. And performance
management systems
are the key tools that can be used to transform people's talent
and motivation
into a strategic business advantage.
Unfortunately, performance management is not living up to its
promise
in terms of turning human capital into a source of competitive
ad vantage. For
example, consider Mercer's 2013 Global Performance

20. Management Survey,
which gathered data from more than 1,050 performance
management leaders
representing 53 countries. These organizations varied in size
from about 1,000
to more than 10,000, and represented several types of industries
(e.g., for-profit,
nonprofit, government) . A very troubling result was that only 3
percent reported
that their performance management system delivers exceptional
value. Also, many
aspects of organizations' performance management approach
were evaluated as
ineffective.3 So, there is big disconnect between the potential
that performance
1Generating buzz: Idaho Power t akes on performance
management to prepare for workforce aging. (2006,
Ju ne). Power Engineering. Retrieved January 3, 2018, f rom
httpJiwww.powergenworldwide .com/index/
display/articledisplay/258477/artides/power·
engineering/volume· 1 1
'Cascio, W. F., & Aguinis, H. (2019). Applied psychology in
talent management (8th ed.). Thousand Oaks, CA: Sage.

21. 12013 Global Performance Management Survey. Mercer.
Retrieved January 3, 2018, from https:/lwww.mercer
.com/contentldam/mercer/attachments/globai/Talent/Assess·
BrochurePeriMgmt.pdf
xiii
xiv Preface and In troducti on
management has in terms of turning human capital into an
organization's source
of competitive advantage and the actual role of performance
management in most
organizations. As noted in Mercer's report, "Establishing an
effective employee
performance management system is a major challenge for most
organizations,
making performance management a perennial hot topic .. .
companies around
the world are regularly in search of best practices and new
solutions for this core
process." And hence, the need for this book.

22. I am delighted to offer this fourth edition in partnership with
Chicago Busi-
ness Press. You will find this edition m uch updated and
improved in terms of
content, as well as easier to read because of its improved and
more user-friend ly
layout and design. This fourth edition includes the following ten
important
changes. More detailed information on each of these issues is
provided in the
section titled "Improvements in this Fourth Ed ition."
• Each of the chapters includes updated content and material,
new sources,
and new sections (but the book is similarly concise as the
previous
edition) .
• This edition highlights the role of context within which
performance
management takes place.
• This fourth edition describes the key "strategic partner" and
"internal
consultant" role played by the HR function in the design and

23. implementation of the performance management system.
• There is an emphasis on the changing nature of work and
organizations,
including globalization, technology and Big Data, team work,
and
demographics (e.g., generational differences), and how these
changes affect
the design and implementation of performance management
systems.
• This fourth edition emphasizes that knowledge generated
regarding
performance management is essentially multidisciplinary.
• This edition emphasizes the important interplay between
science and
practice.
• This edition describes the technical aspects of implementing a
performance management system in detail, and, in addition,
emphasizes
the key role that interpersonal and social dynamics play in the
process.

24. • This edition includes new "Company Spotlights" boxes in each
chapter
featuring The Gap, Sears, Yahoo, Adobe, United States
Department of
Defense, Discover, Google, Airbnb, Sprint, Xerox, Deloitte,
GE, and many
others.
• This fourth edition includes two new hands-on "Exercises" a t
the end of
each chapter- for a total of 22.
• This new edition also includes two case s tudies a t the end of
each chapter,
also for a total of 22.
SOME UNIQU E FEATURES OF THIS BOOK
Performance management is a continuous process of identifying,
measuring, and
developing the performance of individuals and teams and
aligning their perfor-
mance with the strategic goals of the organization. Performance
management is
critical to small and large, for-profit and not-for-profit, and
domestic and global

25. organizations, and to all industries. In fact, the performance
management model
Preface and Introduction xv
and processes described in this book have been used to create
systems to manage
the performance of students in colleges and universities4 and
employees in small
and medium enterprises (SMEs) .5 After all, the performance of
an organization
depends on the performance of its people, regardless of the
organization's size,
purpose, and other characteristics. As noted by former Siemens
CEO Heinrich von
Pierer, "Whether a company measures its workforce in hundreds
or hundreds of
thousands, its success relies solely on individual performance."
As an example in
the not-for-profit sector, Youth Villages, a private child welfare
provider operat-
ing in 12 states and the District of Columbia, has gained
national recognition for

26. its evidence-based performance management system. By
tracking performance
data on children and families, both during and after leaving
care, Youth Villages
is able to better understand its program outcomes and
effectiveness in delivering
social value to the community. The information collected from
the performance
management system is also used to manage employee
performance, assess the
achievement of strategic goals, and upper-management decision
making. The
performance management system provides a detailed description
of practices to
help guide implementation, the metrics used to quantify
performance, and how
employees are scored on whether they adhere to those metrics.6
Unfortunately, few organizations use their existing performance
management
systems in effective ways. Performance management is usually
vilified as an "HR
department requirement." In many organizations, performance
management
means that managers must comply with their HR department's

27. request and fill
out tedious, and often useless, evaluation forms. These
evaluation forms are often
completed only because it is required by the "HR cops."
Unfortunately, the only
tangible consequence of the evaluation process is that managers
have to spend
time away from their "real" job duties.
In the latest wave of criticisms of performance management,
performance
ratings are now the target. Also, there is quite a bit of popular
media and busi-
ness press hype about the "demise" of performance evaluation,
performance
measurement, and performance reviews. Currently, many
companies, includ-
ing GE, Microsoft, Google, Yahoo, Adobe, and Accenture, are
going through
a similar process of transitioning from a performance appraisal
(i.e., dreaded
once-a-year evaluation and review) to a performance
management system (i.e.,
ongoing evaluation and feedback). However, contrary to the
way this trend is

28. usually described in business publications and the media with
such headlines as
"Performance Evaluation is Dead" and "The End of Performance
Reviews," the
evaluation of performance is not going away. In fact,
performance assessment
and review are becoming a normal, routine, built-in, and ever-
present aspect of
work in twenty-first-century organizations. As described in this
text since its first
edition published in 2008, performance management systems
play a critical role
and serve important purposes.
4 Gillespie, T. l., & Parry, R. 0. (2009). Students as employees:
Applying periormance management principles
in the management classroom. Journal of Management
Education, 33, 553- 576.
5 Na·Nan, K., Chaiprasit, K., & Pukkeeree, P. (2017).
Performance management in SME sect ors
and high-impact sectors in Thailand: Mixed method research.
International Journal of Engineering Business
Management. 9, 1-8.
' Kamensky, J. M . (2016). Tennessee chi ld-services provider's
performance-management system offers bal anced

29. scorecard of metrics. Government Technology. Retrieved
January 3, 20 18, f rom httpJ/www.govtech.com/
xvi Preface and Introduction
So, it is not the case that companies are abandoning ratings and
performance
measurement and eval uation. They are actually implementing
performance
systems more clea rly aligned with best practices, as described
in this text, that
involve a constant and ongoing evaluation of performance! The
companies men-
tioned above and many others in all industries, including
government, such as
the United States National Security Agency (NSA), have
eliminated the labels
"performance evaluation," "performance review," and even
"performance man-
agement." Instead, they use labels s uch as "performance
achievement," "talent
evaluation and advancement," "check-ins," and "employee
development." But

30. they still implement performance management, but use new,
more fashionable,
and perhaps less threatening labels. It has been extremely
gratifying to see the
transition of so many companies from performance appraisal to
performance
management, as has been described since the first edition of this
text more than
10 years ago. To sum this up by paraphrasing Mark Twain, we
can say with cer-
tainty that the death of performance management has been
vastly exaggerated .
This book is about the design and implementation of effective
and successful
performance management systems. In other words, it focuses on
research-based
findings and up-to-date applications that help increase an
organization's talent
pool. Performance management is ongoing and cyclical;
however, for pedagogical
reasons, the book needs to follow a linear structure. Because
performance obser-
vation, evaluation, and improvement are ongoing processes,
some concepts and

31. practices may be introduced early in a cursory manner, but
receive more detailed
treatment in later sections. In addition, many issues such as
training of raters
and employee development will be d iscussed in multiple
chapters. So, you will
see that several chapters may refer to similar issues. When this
happens, content
included in more than one chapter will be cross-referenced.
Finally, this book focuses on best practices and describes the
necessary s teps
to create a top-notch performance management system. As a
result of practical
constraints and Jack of knowledge about system des ign and
implementation,
many organizations cut corners and do not have systems that
follow best practices.
Environmental and political issues (e.g., goals of raters may not
be aligned with
goals of the organization) also play a role. Because the way in
which systems are
implemented in practice is often not close to the ideal system,
the book includes
numerous examples from actual organizations to illustrate how

32. systems are
implemented, given actual situational constraints.
IMPROVEMENTS IN THIS FOURTH EDITION
As mentioned earlier, this edition includes ten important
changes thro ughout
the book. First, this edition includes important updates and
additional informa-
tion. In preparation for revising and updating this book, I
gathered more than
2,000 potentially relevant articles and books. More than 250 of
those sources are
now included in this edition. These sources have been published
since the third
edition of the book went into production. This vast literature
demonstrates an
increased interest in performance management on the part of
both academics
and practitioners.
Second, there is an emphasis on the role of the context within
which perfor-
mance management takes place. Performance management does
not operate in
a vacuum. Rather, it takes place within a particular

33. organizational context, and
Pr ef ace a n d Introduction xvii
organizations have a particular history, and unwritten norms
about what is valued
and what is not (i.e., an organization's culture). Also, they have
unwritten norms
about communication, trust, interpersonal relations, and many
other factors that
influence daily activities. Thus, for example, implementing an
upward feedback
system may be effective in some organizations, b ut not in
others (Chapter 8) . As
a second illustration, some organizations may have a culture
that emphasizes
results more than behaviors which, in turn, would d ictate that
the performance
management system also emphasize results; instead, other
organizations may
place an emphasis on long-term goals, which would dictate that
performance be
measured by emphasizing employee behaviors, rather than

34. results (Chapter 4) .
Also, we need to understand the contextual reasons w hy,
sometimes, performance
ratings may not be accurate-particularly if there is no
accountability fo r raters to
provide valid assessments (Chapter 6). As yet another exam ple,
cultural factors
affect what sources are used for performance information. In a
country such as
Jordan, whose culture determines more hierarchical
organizational structures,
the almost exclusive source of performance information is
supervisors, whereas
employees and their peers almost have no input; this situation is
different in coun-
tries with less hierarchical cultures in w hich not only
performance information is
collected from peers, but also supervisors are rated by their
direct reports (Chapter
6). To emphasize the role of national culture, this edition
describes examples and
research conducted in o rganizations in the United States and
Canada, but also
Jordan, Japan, China, Turkey, Eritrea, Germany, Spain, South
Korea, Mexico,

35. Australia, the United Kingdom, Brazil, Ind ia, and others.
Third, this edition describes two key roles played by the HR
function: stra-
tegic partner and internal consultant. Regarding the first role,
the HR function
is unfortunately often vilified as being merely opera tional and
not able to think
o r act strategically. Well, over the past two decades or so, an
entire new field of
research has emerged called "strategic h uman resource
management." Strategic
human resource management is about planning and
implementing HR policies
and activities with the goal of enabling an organization to
achieve its strategic
goals.7 Performance management is an ideal vehicle to
demonstrate the strategic
role of the HR ftmction because it allows for explicit and dear
linkages between
an organization's mission, vision, and objectives, and individ
ual and team per-
formance. By helping implement a successful performance
management system,
the HR function can get a "seat at the table" of the top

36. management team. In fact,
the few CEOs with HR background, incl uding Samuel R. Allen
at John Deere,
James C. Smith at Thomson Reuters, Steven L. Newman at
Transocean, and Mary
Barra at General Motors have been able to serve as strategic
partners, w hich is,
in large part, w hat propelled their trajectory from an HR role to
the very top of
their organizations. Second, the HR function serves as an
internal consultant
for all o rganizational members participating in the performance
management
system. For example, it offers ad vice on how to measure
performance, resources
in the form of training opportunities, and can also lead the
strategic planning
process. So, although the HR func tion is certainly not the
"owner" of the per-
formance management system, it adds value by playing a key
role in its design
and implementation.
'Wright. P.M., & Ulrich, M.D. (201 7). A road well traveled:
The past, present, and future journey of stra tegic

37. human resource management. Annual Review of Organizational
Behavior and Organiza tional Psychology.
4, 4 5-65.
xviii Pref ace an d In t roduction
Fourth, this edition highlights important changes in the nature
of work and
organizations and how these changes have a direct impact on the
design and
implementation of …