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THROUGH EFFECTIVE
PERFORMANCE MANAGEMENT
This book is a practical guide for managers to increase and support employee
engagement through stronger performance management tools and techniques.
In this second edition, Edward Mone and Manuel London incorporate
new developments in the field, including discussion of issues about the value of
challenging goals, annual formal appraisals, forced ranking, and ways to give
constructive feedback. The authors expand the traditional notion of performance
management to include building trust, creating conditions of empowerment,
managing team learning, and maintaining ongoing straightforward com-
munications about performance, all of which are critical to employee engagement.
Case studies offer concrete examples, and checklists and surveys supply managers
with ways to assess employee engagement as well as directions for increasing
engagement. An up-to-date, straightforward guide, this book is appropriate for
graduate students in Industrial and Organizational Psychology, Human Resources,
and Management Studies, as well as scholars and practitioners in those fields.
Second Edition
References 224
Author Index 233
Subject Index 235
FIGURES
Edward M. Mone has more than 30 years of experience in career, leadership, and
organization change and development. He is currently a lecturer in the College of
Business and School of Professional Development at the State University of New
York at Stony Brook. He was vice president for organization development (OD)
at CA Technologies, where he was responsible for management and leadership
training and development, succession planning, mentoring, the company-wide
employee opinion survey and employee research, coaching, 360-degree feedback,
and performance management. He was previously vice president of OD at Cable-
vision Systems, Inc., and director of people processes and systems at Booz-Allen
& Hamilton, Inc. He was human resources division manager for strategic planning
and development at AT&T, where he also held a variety of human resource and
OD positions. Before that, he was a partner in an outplacement and career manage-
ment firm. He holds an MA in counseling psychology, and has completed doctoral
coursework in organizational psychology, as well as individual, team, and organ-
ization learning at Teachers College, Columbia University. He has coauthored and
coedited books, book chapters, and articles in the areas of human resources and
OD, including Leadership for Today and the Future (Bridgepoint Education, Inc.,
2016), with Manuel London.
So, based on our proprietary research and experience and further review of
the literature, we provide our definition of employee engagement and present the
idea that an expanded view of performance management and its related processes,
tools, and techniques are the keys to driving employee engagement. Although this
book will be of value to managers, students, and a wide range of practitioners,
we have written it in a “how-to” style for managers, and the remainder of the
book will take that perspective and voice; we will show what managers can do
to achieve the objective of fostering high levels of employee engagement in their
organizations. Consultants and human resource practitioners can use this book as
a practical and reliable resource for helping leaders and managers create an
engaged workforce, whereas those instructing students in business, management,
and human resource courses at the undergraduate or graduate levels can use the
book as a primary or complementary text to help their students understand the
main components of excellent performance management and ways to achieve an
engaged workforce. Because this book is to be a practical guide, in the first edition,
we purposely limited our literature references to those that make sense for this
style of book to give evidence, without being exhaustive, that our recommen-
dations and the best practices we have developed and used with client organizations
over time are grounded in solid theory and research. For this second edition, in
a similar vein, we built upon our earlier work and reviewed selected journals,
periodicals, and books since this book was first published in 2010. This was a
targeted review, looking for new insights regarding employee engagement and
performance management, and practical strategies and tactics for executing the
various phases of performance management.
So, let us begin with our definition of employee engagement: An engaged
employee is someone who feels involved, committed, passionate, and empowered
and demonstrates those feelings in work behavior. Employee engagement has been
considered a trait (something that is characteristic of an employee’s personality),
a state (a condition that an employee may be in for some period of time), and a
behavior that an employee demonstrates, for example, challenging the status quo,
being innovative, or just being a good organization citizen (Macey & Schneider,
2008). Although we believe that some employees are more predisposed to be
engaged than not, we do recognize, however, that engagement tends to be a
state and not a personality trait, and that even the best of employees are not 100
percent engaged all the time.
As a test of our ideas about employee engagement, we used our definition as
the basis for creating a set of questions that we incorporated into an employee
opinion survey conducted in 2008 at XINC (a pseudonym), a large, global
company (we describe this study in more detail in Chapter 1). The result of this
effort was the identification of a highly reliable set of 18 questions that, taken
together, created an employee engagement index—another way of saying a
measure of employee engagement. With an index in place, we were able to
determine specific drivers of employee engagement, which then allowed us to
Preface xix
• Recognize and reward your employees for their achievements and successes.
• Encourage your employees to be innovative and creative.
• Conduct fair and effective performance appraisal discussions, and write
effective appraisals.
• Foster team-level learning and development in support of group-level
engagement and performance.
• Monitor the overall climate and efforts of your employees and teams,
ensuring that job and organization demands do not lead to burnout.
So you might be asking, “What does it look like when all the elements of
performance management come together, and how does that impact employee
engagement?” Our last chapter answers this question through a short case in which
we illustrate the everyday realities of performance management, its holistic nature,
and how it affects engagement. You will recognize the importance of trust and
empowerment, how a manager’s actions can create the conditions for burnout,
and how personality factors can affect a manager’s expectations and behavior. You
will also recognize the value of having clear goals; providing, seeking, and using
feedback constructively; how 360-degree surveys and coaching can support
performance and development efforts; and how the end-of-year performance
appraisal and discussion provide understanding and closure to the end of one
performance year, while setting the stage for the beginning of a new one.
Finally, we leave you with a short set of expectations for how to use
performance management to drive engagement. We hope you will exceed these
expectations!
ACKNOWLEDGMENTS
An Introduction
This book addresses how you, as a manager, can create an engaged workforce
through effective performance management. We explain how to use state-of-
the-art goal setting, feedback, coaching, development, appraisal and recognition
processes, strategies, and techniques, and how to build a climate of trust and em-
powerment. You will learn about 360-degree survey feedback, professional
coaching, and self-assessment. Overall, Employee Engagement through Effective Perform-
ance Management will help you to create a culture that encourages feedback and
development, promotes self-direction for continuous learning, and fosters employee
engagement.
You may work in a large multinational company; a smaller, perhaps culturally
diverse domestic firm; or a corporate start-up such as an e-commerce business.
Your company may have a traditional multilevel bureaucratic structure or a small,
flexible structure. Your company may be stable or, more likely in today’s world,
be undergoing transformational change. Regardless of your organizational context,
the fundamentals of performance management are the same. Setting goals, giving
feedback, coaching for performance effectiveness, evaluating performance, and
recognizing accomplishments are the cornerstones for maintaining an engaged
workforce.
Although your company may have a human resources department that designs
programs to support these elements (for instance, the corporate performance
appraisal program), the principal responsibility for performance management rests
with you and your company’s management team. Performance management,
though driven by the human resources department, is a business process that is
really “owned” by line managers, and will be most effective when it has strong
executive-level sponsorship (Bersin, 2006).
2 Performance Management Process
A Focus on Feedback
Although this book covers each of the major elements of performance
management, we emphasize feedback because it is the common thread stitching
together all the elements of the process and it often causes the most difficulty for
managers. Many managers simply do not know how to give feedback and do
not feel comfortable doing it. For instance, managers may fear employees’
4 Performance Management Process
defensive reactions and losing their loyalty and friendship if they give negative
feedback. These managers avoid spending time talking to employees about their
performance. Other managers do not value giving positive feedback, claiming
that employees know when they are doing a good job.
Despite these difficulties, our research shows that the feedback element of the
performance management process is a key driver of engagement. Feedback helps
managers build a learning culture that is able to adapt to meet changing business
needs. In this kind of culture, feedback and development are linked as employees
take responsibility for their own performance improvement in order to meet new
corporate expectations. As a result, employees value learning and development,
and this strengthens the organization’s ability to succeed in turbulent times.
In addition, employees generally feel that feedback and coaching will enhance
their professionalism and help them to maximize their performance potential and
outcomes. Your feedback positions your employees to be ready to meet future,
unanticipated challenges and to remain competitive for key positions and
advancement within the company.
Employee Engagement
Engagement, as a construct, is relatively complex. Remember we said that an
engaged employee is someone who feels involved, committed, passionate, and
empowered and demonstrates those feelings in work behavior. So, when we set
out to measure engagement and create a measure of engagement, we realized
that we had to try to capture this complexity in the facets we chose and the
questions we would use to measure employees’ level of engagement in our survey
research. We wanted to capture the various attitudes, behaviors, and dispositions
associated with employee engagement in order to help leaders and managers use
the results at individual, team, and organization levels. On the other hand,
academics and researchers tend to focus their efforts on narrowing and refining
the definition and scope of the term (Byrne, 2015). Additionally, most engage-
ment measures and the majority of the research emphasize job work engagement
or the employee’s relationship to his or her work. Our measure also includes a
focus on engagement with the larger organization, which again, may be more
important to managers and HRM practitioners (Schaufeli, 2014).
Our model of engagement, therefore, contains the following six facets
presented with the associated behaviors and attitudes that, in totality, represent
both our model and measure of engagement:
In the next section, we turn to our employee engagement study. This is where
we identified in statistically valid ways predictors of employee engagement. That
is, these are the most important actions managers can take to drive high levels
of employee engagement. The majority of those actions fall in the realm of
performance management as presented in this book. If you do not want to read
about this study, or find our description of this study a bit too technical, you can
safely move on to the final section of this chapter—“Overview of the Book.”
chapters to come when they provide additional evidence and support beyond
this study for the key performance management practices we recommend to foster
engagement in the workplace.
So, to measure the level of employee engagement, we created an index by
computing the mean of the 18 questions, and then multiplied the mean (calculated
on a 1–5 scale) by a factor of 20 to create an index that ranges from 20 to 100
percent. This simple average index resulted in a 78 percent level of employee
engagement. However, senior leadership felt that instead of focusing on 18
questions, 10 would be sufficient to track employee engagement and examine
the variables that predicted it and that could be used to improve engagement.
They selected the following 10 questions:
What is the practical implication for you? Although this study was conducted
in one large, global organization, these predictors or actions provide a roadmap
for how you can improve employee engagement. When you take these actions,
you will have a good chance of increasing your employees’ engagement.
Next, we conducted one more analysis. For each of these direct predictors of
employee engagement, we identified between three and five associated survey
questions as indirect predictors of employee engagement. That is, these variables
predicted the eight main predictors. A total of 28 survey questions fell into this
category of indirect predictor. The 19 of the 28 questions most closely related
to performance management as discussed in this book are listed by predictor in
Table 1.1. Again, the practical implication for you is that the table encompasses
a range of behaviors that you can demonstrate and conditions that you can create
that should further increase your ability to create a fully engaged workforce.
In conclusion, for XINC, this study provided valuable direction for how to
understand, address, and raise the level of employee engagement. The results are
also consistent with what other researchers are saying regarding employee
engagement, and more importantly, the study suggests very specific actions for
managers. Therefore, as mentioned earlier, we will from time to time reference
this study.
TABLE 1.1 Path Model Direct and Indirect Predictors of Employee Engagement
Related to Performance Management
I consider the total value • I am paid fairly for the work I do.
of my compensation, • At XINC, raises and promotions are based on merit,
benefits, and work not favoritism.
experience when I think
about what XINC offers
in exchange for my
employment.
department. We close the chapter with a sample survey, a sample report, and a
discussion of how to interpret the report. In terms of performance management,
you will see that the results from a 360-degree survey can be used to prompt
discussions about feedback, and can be a basis for establishing development goals
and targeting performance improvement.
We address coaching from two perspectives in Chapter 8. First, we show you
how you can improve your own capability as a coach, and then we describe the
pros and cons of professional coaching. We define coaching, clarify your role as
a coach, offer coaching tips, and show you how to use a five-step process we
call 5S coaching. We then discuss in detail what is involved with professional
coaching, including how to get a coach, what to expect, and the value a
professional coach can offer.
In Chapter 9, we show you how to manage your employees’ development
and how to help them become continuous learners and self-developers and
capitalize on formal and informal learning opportunities. We include assessments
for evaluating your employees’ learning needs and strategies to manage your
employees’ ongoing learning. In fact, we show you how to help your employees
“learn how to learn.” We also specifically address how to manage and facilitate
your team’s learning.
No doubt your employees face considerable challenges for the use of their
time and energy. Performance management helps you to focus their efforts. But
sometimes your employees, even your currently highly engaged employees, can
experience burnout. Chapter 10 focuses on burnout, the opposite end of the
spectrum from engagement. We define burnout and its causes, show you how
to identify the warning signs and symptoms of burnout in your employees, and
discuss how you can address and prevent burnout in your organization. You will
see that there is much you can do in your role as a manager to alleviate burnout
and help your employees get back on track to feeling productive and engaged.
In the final chapter, we use a case to illustrate performance management in
action and to show you how all the elements of the process work together to
drive performance and engagement. You will discover the value of midyear reviews
and coaching, of working with a professional coach, and of the use of 360-degree
feedback. We hope the case, as well as this book in general, are affirming and
motivational, encouraging you to devote time to performance management
in spite of all the demands you face. The payoff for you is that your employees
will be more involved in continuous learning, more focused on performance
excellence, and more engaged.
and rewarding employees. If you are working in a larger organization, you are
probably familiar with one or more of these applications.
Talent management suite applications or modules, which can be used alone
or in concert with others, typically include workforce planning, recruiting,
onboarding, goal management, performance appraisal, competency assessment and
management, learning, career development, succession planning, recognition, and
compensation administration. Some leading vendors offering talent management
suites, including top performance management applications, are Cornerstone
OnDemand, SAP, and Oracle, while Saba and Halogen can be considered to
have strong performance management components in their overall talent
management suites; no vendor, however, dominates all components of the suite
(Cameron, Freyermuth, Hanscome, & Poitevin, 2015).
Given the purpose of this book, let us consider what one vendor has to offer
in terms of a performance management application. Although these applications
will vary somewhat from vendor to vendor in terms of what is included, for
example, learning and development might be a separate module, the Saba
Performance (Saba Software, Inc., 2014) application entails:
and informal training and development options. It would also make it easier
for your employee to register for the training and for you to track which
course(s) your employee registers for, when he or she will attend, and to verify
completion of the course. Your overall appraisal rating, on the other hand, could
be linked to a compensation module, which would automatically recommend a
possible merit increase based on your employee’s current salary and position in
the salary range, the size of the merit pool, and the actual rating.
In summary, you could probably imagine how much harder all of this would
be to accomplish if you had to check catalogues, policy manuals, administrative
guidelines, e-mails from HR, etc., to accomplish the same ends when it comes
to performance management, if not overall talent management.
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