The Evolution of Performance Management: Searching for Value

Abstract

This article reviews the history of performance management (PM), beginning with performance evaluation. We discuss various strategies that have been used to enable accurate ratings as well as cognitive processes and contextual factors that have been shown to significantly impact ratings. We raise questions about the concept of true performance and whether raters can be enabled and motivated to make accurate ratings. We progress to discussing more structured and comprehensive PM processes that typically involve cascading goals, goal setting, competency modeling, evaluation of behavior and results, and implementation. These systems have proven to be tedious and low-value, resulting in unprecedented, wide-spread experimentation with innovative practices to move companies away from heavy PM processes to simpler, cost-effective strategies that actually drive performance. These have ranged from abandoning ratings to implementing innovations in goal-setting, real-time feedback, coaching, and PM behavior change. Directions for future research and practice are discussed.