Because learning changes everything.

Chapter 8
Performance
Management

Human Resource Management

Gaining A Competitive Advantage
THIRTEENTH EDITION
Raymond Noe, John Hollenbeck, Barry
Gerhart, Patrick Wright

© 2023 McGraw Hill, LLC. All rights reserved. Authorized only for instructor use in the classroom. No reproduction or further distribution permitted without the prior written consent of McGraw Hill, LLC.
 Learning Objectives 1

8-1 Identify the major parts and limitations of the traditional

performance management process.
8-2 Discuss the features of a continuous performance
management process and why companies are adopting
this approach.
8-3 Discuss the six purposes of performance management.
8-4 Identify the five criteria for effective performance
management systems.

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 Learning Objectives 2

8-5 Discuss the five approaches to performance

management, the specific techniques used in each
approach, and the way these approaches compare with
the criteria for effective performance management
systems.
8-6 Choose the most effective approach to performance
measurement for a given situation.
8-7 Discuss the advantages and disadvantages of the
different sources of performance information.
8-8 Choose the most effective source(s) for performance
information for any situation.

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 Learning Objectives 3

8-9 Discuss the potential advantages of social performance

management and electronic monitoring for performance
management.
8-10 Distinguish types of rating errors, and explain how to
minimize each in a performance evaluation.
8-11 Conduct an effective performance feedback session.
8-12 Identify the cause of a performance problem.

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 Introduction
Performance Management:
• Ensure employee activities are congruent with goals.
Performance Appraisal:
• Get information on how well employees are doing jobs.
Performance Feedback:
• Provide employees information on their performance.

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 Figure 8.1 Traditional Performance
Management Process

SOURCES: E. Pulakos, R. Hanson, S. Arad, and N.

Moye, “Performance Management Can Be Fixed: An
On-the-Job Experiential Learning Approach for
Complex Behavior Change,” Industrial and
Organizational Psychology, March 2015, pp. 51–76;
E. Pulakos, R. Mueller-Hanson, R. O’Leary, and M.
Meyrowitz, Building a High-Performance Culture: A
Fresh Look at Performance Management (Alexandria,
V A: S HRM Foundation, 2012); H. Aguinis, “An
Expanded View of Performance Management,” in J.
W. Smith and M. London (eds.), Performance
Management (San Francisco: Jossey-Bass, 2009), pp.
1–43; J. Russell and L. Russell, “Talk Me through It:
The Next Level of Performance Management,” T + D,
April 2010, pp. 42–48.

Access the text alternative for slide images.

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 The Performance Management Process 1

Step 1:
• Understand and identify important performance outcomes
or results.
• Align goals and behaviors to organization’s strategies and
goals.

LO 8-1
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 The Performance Management Process 2

Step 2:
• Understand how to achieve the goals established in the
first step:
• Identify measurable goals, behaviors, and activities that help
employees achieve performance results.
• Make goals part of employees’ job descriptions.

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 The Performance Management Process 3

Step 3:
• Provide employees with training, necessary resources
and tools, and frequent feedback.
• Focus on accomplishments as well as issues and
challenges influencing performance.

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 The Performance Management Process 4

Step 4:
• Manager and employee discuss and compare the targeted
performance goals and supporting behaviors with actual
results:
• Annual or biannual formal performance appraisal

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 The Performance Management Process 5

Step 5:
• Identify what an employee can do to capitalize on
performance strengths and address weaknesses.
Step 6:
• Provide consequences for achieving (or failing to achieve)
performance outcomes.

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 The Performance Management Process 6

Continuous Performance Management Process:

• Ongoing conversations between managers, their direct
reports, and teams focused on work progress, feedback,
goals, and needs.
• Plus, more frequent formal check-ins.

• Employees want regular feedback and transparency.

• Forward-facing.
• Managers are coaches.

LO 8-2
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 Table 8.2 Comparison of the Features of the
Typical and Continuous Performance
Management Process
FEATURE TYPICAL CONTINUOUS
When does it occur? Midyear and annual review. Ongoing combined with more formal
quarterly, midyear, and/or annual
reviews
Who is involved? Manager. Manager, peers, direct reports
What is the focus? Backward-focused (focus on goals/ Forward-facing (focus on helping to
behavior set at beginning of achieve goals/change behavior). Goals
previous appraisal period). are fluid, adjusted as necessary.
How is it conducted? Ratings and results measured on a Emphasizes face-to-face performance
formal performance appraisal form. conversations. Can include ratings and
feedback provided using social media.

What is the level of Goal setting and goal progress is Feedback, recognition, goal setting,
transparency? based on private conversation progress, and achievement is public
between manager and employee. and transparent. Goals are fluid,
adjusted as necessary.

Source: K. Murphy, “Performance Evaluation Will Not Die, But It Should,” Human Resource Management Journal 30 (2020), pp. 13–31; Deloitte Development LLC, “Continuous
Performance Management,” 2017, http://marketing.bersin.com, accessed January 22, 2019; N. Sloan, D. Agarwal, S. Garr, and K. Pastakia, “Performance Management: Playing a
Winning Hand,” December 28, 2017, https://www2.deloitte.com/insights/us/en/focus/human-capital-trends/2017/redesigning-performance-management.html , accessed January 22,
2019; E. Pulakos, R. Mueller-Hanson, and S. Arad, “The Evolution of Performance Management: Searching for Value,” Annual Review of Organizational Psychology and
Organizational Behavior 6 (2019), pp. 249–71; A. Colquitt, Next Generation Performance Management (Charlotte, North Carolina: Information Age Publishing, 2017).

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 Purposes of Performance Management

Six purposes:
1. Strategic.
2. Administrative.
3. Developmental.
4. Communication.
5. Organizational maintenance.
6. Documentation.
Difficult for one system to fulfill all purposes.

LO 8-3
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 Table 8.3 Purposes of Performance Management

PURPOSE DESCRIPTION
Strategic Link employee behavior and expected results with organizational goals.
Administrative Used in salary administration (pay raises), promotions, retention–
termination, layoffs, recognition of employee performance.
Developmental Identify employee strengths and weaknesses for managers to use in
providing feedback and coaching and development and career
planning.
Communication Emphasize what employees are expected to do, how they are
performing, and what they need to improve. Indicate important
company values and principles.
Organization Show workforce performance, training, and development and talent
Maintenance acquisition needs.
Documentation Record for administrative decisions and information for litigation and
investigations.

SOURCES: A. Colquitt, Next Generation Performance Management (Charlotte, North Carolina: Information Age Publishing, 2017); H. Aguinis, Performance Management, 4th ed.
(Chicago: Chicago, University Press, 2019); J. Cleveland, K. Murphy, and R. Williams, “Multiple Uses of Performance Appraisal: Prevalence and Correlates,” Journal of Applied
Psychology 74 (1989, pp. 130–35.

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 Performance Measures Criteria 1

Strategic Congruence:
• Extent to which performance management system elicits
job performance that is congruent with organization’s
strategy, goals, and culture.
• Must be flexible to adapt to change.
• Critical success factors (CSFs) or key performance
indicators (KPIs).
• Google uses objectives and key results (O KRs).

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 Performance Measures Criteria 2

Strategic Congruence (continued)

• Using nonfinancial performance measures:
• Measures that likely link to company’s goals need to be
identified.
• Use existing databases or develop measures.
• Use statistical and qualitative methods for testing
relationships.
• Revisit the model and revise if needed.

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 Performance Measures Criteria 3

Validity:
• Extent to which a performance measure assesses all
relevant aspects of performance.
• Must not be deficient or contaminated:
• Deficient: It does not measure all aspects of performance.
• Contaminated: It evaluates irrelevant aspects of performance
or aspects that are not job related.
• Concerned with maximizing overlap between actual job
performance and measure of job performance.

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 Figure 8.2 Contamination and Deficiency of a
Job Performance Measure

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 Performance Measures Criteria 4

Reliability:
• Consistency of a performance measure
• Interrater reliability:
• Consistency among individuals who evaluate employee’s
performance
• Test–retest reliability:
• Should be reliable over time

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 Performance Measures Criteria 5

Acceptability:
• Extent to which a performance measure is deemed
satisfactory or adequate.
• May take too much time or not be accepted as fair.
• Three categories of fairness:
1. Procedural.
2. Interpersonal.
3. Outcome.

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 Table 8.4 Categories of Perceived Fairness
and Implications for Performance
Management Systems
IMPORTANCE FOR
PERFORMANCE
FAIRNESS MANAGEMENT
CATEGORY SYSTEM IMPLICATIONS
Procedural Development • Give managers and employees opportunity to participate in development of
fairness system.
• Ensure consistent standards when evaluating different employees.
• Minimize rating errors and biases.
• Managers should collaborate with employees to set goals and key
performance indicators.
Interpersonal Use • Give timely and complete feedback.
fairness • Allow employees to challenge the evaluation.
• Provide feedback in an atmosphere of respect and courtesy.
• Individual, team, and company goals and key performance indicators should
be transparent to all employees.
Outcome Outcomes • Communicate expectations regarding performance evaluations and
fairness standards.
• Communicate expectations regarding rewards.
• The rationale for compensation and development decisions should be
communicated and understood.

SOURCE: B. Hancock, E. Hioe, and B. Schaninger, “The Fairness Factor in Performance Management,” April 2018, https://www.mcvkinsey.com, accessed January 10, 2019; HB R
Guide to Performance Management (Boston MA: Harvard Business Review Press, 2017); S. W. Gilliland and J. C. Langdon, “Creating Performance Management Systems That
Promote Perceptions of Fairness,” in Performance Appraisal: State of the Art in Practice, ed. J. W. Smither (San Francisco: Jossey-Bass, 1998).

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 Performance Measures Criteria 6

Specificity:
• Extent to which a performance measure tells employees
what is expected and how to meet expectations.
• Relevant to both strategic and developmental purposes.
• Must measure what an employee must do to achieve
company’s goals.
• Must point out employee’s performance problems.

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 Approaches to Measuring Performance 1

Evaluating Performance:
• Difficult to do because performance is complex.
• What is considered effective performance and how it is
measured varies.
• Five different approaches.
• Must measure what gets accomplished (objectives) and
how it gets accomplished (behaviors).

LO 8-5
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 Approaches to Measuring Performance 2

The Comparative Approach:

• Compare an individual’s performance to others.
• Ranking:
• Simple ranking: highest performer to poorest performer.
• Alternation ranking: cross one name off list at a time.

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 Approaches to Measuring Performance 3

The Comparative Approach (continued)

• Forced distribution:
• Employees ranked in predetermined categories.
• Best way to identify high-potential employees and the
poorest performers.
• Helps managers tailor development activities to employees
based on performance.
• Can improve the potential performance of company’s
workforce.

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 Table 8.5 Performance and Development Based
on Forced Distribution and Ranking 1

RANKING OR
DISTRIBUTION CATEGORY PERFORMANCE AND DEVELOPMENT PLAN
A • Accelerate development through challenging job
Above average assignments.
Exceptional • Provide mentor from leadership team.
A1 performer • Recognize and reward contributions.
15% of Employees • Praise employee for strengths.
• Consider leadership potential.
• Nominate for leadership development programs.
B • Offer feedback on how B can become a high performer.
Average • Encourage development of strengths and improvement
Meets expectations of weaknesses.
Steady performer • Recognize and reward employee contributions.
60% of Employees • Consider enlarging job.

SOURCES: B. Axelrod, H. Handfield-Jones, and E. Michaels, “A New Game Plan for C Players,” HB R, January 2002, pp. 80–88; A. Walker, “Is Performance Management as Simple
as A B C?” T + D, February 2007, pp. 54–57; T. De Long and V. Vijayaraghavan, “Let’s Hear It for B Players,” HB R, June 2003, pp. 96–102.

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 Table 8.5 Performance and Development Based
on Forced Distribution and Ranking 2

RANKING OR DISTRIBUTION
CATEGORY PERFORMANCE AND DEVELOPMENT PLAN
C • Give feedback and agree upon what specific skills,
Below expectations behavior, and/or results need to be improved, with
15% of Employees timetable for accomplishment.
• Move to job that better matches skill.
D • Placed on Performance Improvement Plan.
Poor performance • Terminate.
15% of Employees

SOURCES: B. Axelrod, H. Handfield-Jones, and E. Michaels, “A New Game Plan for C Players,” HB R, January 2002, pp. 80–88; A. Walker, “Is Performance Management as Simple
as A B C?” T + D, February 2007, pp. 54–57; T. De Long and V. Vijayaraghavan, “Let’s Hear It for B Players,” HB R, June 2003, pp. 96–102.

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 Approaches to Measuring Performance 4

The Comparative Approach (continued)

• Paired comparison:
• Compare every employee with every other employee.
• Tends to be time consuming.

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 Approaches to Measuring Performance 5

The Comparative Approach (continued)

• Evaluating the comparative approach:
• Virtually eliminates problems of leniency, central tendency,
and strictness.
• Easy to develop and use.
• Problems:
• Often not linked to strategic goals.
• Validity and reliability depend on the raters.
• Lack specificity for feedback.
• Employees and managers less likely to accept evaluations.

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 Approaches to Measuring Performance 6

The Attribute Approach:

• Graphic rating scales:
• Evaluate list of traits on a five-point scale.
• Can be discrete scale or continuous scale.

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 Approaches to Measuring Performance 7

The Attribute Approach (continued)

• Mixed-standard scales:
• Define relevant performance dimensions and then develop
statements representing good, average, and poor
performance along each dimension.
• Statements then mixed with statements from other
dimensions on the rating instrument.
• Can be trait or behavior-oriented scales.

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 Approaches to Measuring Performance 8

The Attribute Approach (continued)

• Evaluating the attribute approach:
• Easy to develop and generalizable.
• Problems:
• Little congruence between the techniques and company’s
strategy.
• Vague performance standards are open to different
interpretations by different raters.

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 Approaches to Measuring Performance 9

The Behavioral Approach:

• Behaviorally anchored rating scales (BARS):
• Behavioral anchors associated with different levels of
performance.
• Can increase interrater reliability.
• Can bias information recall.

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 Approaches to Measuring Performance 10

The Behavioral Approach (continued)

• Behavioral observation scales (BOS):
• Uses many effective and poor behaviors to specifically define
all behaviors that are necessary for effective or poor
performance.
• Requires managers to rate frequency with which employee
has exhibited each behavior.
• May require more information than most managers can
process or remember.

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 Approaches to Measuring Performance 11

The Behavioral Approach (continued)

• Competency models:
• Identifies and provides descriptions of common
competencies.
• Useful for various HR practices including recruiting,
selection, training, and development.
• Helps identify the best employees to fill open positions.
• Used in development plans that allow employee and
manager to target specific strengths and development
areas.

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 Approaches to Measuring Performance 12

The Behavioral Approach (continued)

• Evaluation of the behavioral approach:
• Can link company’s strategy to specific behavior necessary for
implementing strategy.
• Provides specific guidance and feedback for employees about their
expected performance.
• High acceptability and reliability.
• Weaknesses:
• Behaviors and measures must be continually monitored and revised.

• Assumes there is “one best way” to do job and behaviors that

constitute this best way can be identified.

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 Approaches to Measuring Performance 13

The Results Approach:

• The use of objectives:
• Managers set goals that are used as standards to evaluate
individuals’ performance.
• Three common components:
1. Setting effective goals (SMART goals).

2. Different types of measurements can be used for goals or objectives.

3. Goals set with managers’ and subordinates’ participation.

• Manager gives objective feedback throughout.

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 Table 8.11 Best Practices in Goal Setting
BEST PRACTICES IN GOAL SETTING
1. Employees and managers should discuss and set no more than three to five goals.
2. Goals should be brief, meaningful, challenging, and include the results the employee is
expected to achieve.
3. The time frame for goal achievement should be related to when they are expected to be
accomplished.
4. The relationship between goals and rewards should be appropriate.
5. Goals should be “linked up” rather than “cascaded down.” This means that functions,
teams, and employees should set their own goals that are related to company goals.
6. Employees will be more committed to achieving their goals and performance will be
higher if they make their goals known to someone higher in perceived relative status
(such as their manager or a mentor).

SOURCES: H. Klein, R. Lount Jr., H. Park, and B. Linford, “When Goals Are Known: The Effects of Audience Relative Status on Goal Commitment and Performance,” Journal of
Applied Psychology 105 (2020), pp. 372–89; R. Hanson and E. Pulakos, Putting the “Performance” Back in Performance Management (Alexandria, V A: Society for Human Resource
Management, 2015); R. Noe and L. Inks, It’s about People: How Performance Management Helps Middle Market Companies Grow Faster (Columbus, O H: National Center for the
Middle Market, Ohio State University Fisher College of Business, G E Capital, 2014): D. Grote, How to Be Good at Performance Appraisals (Boston, M A: Harvard University Press,
2011); A. Fox, “Put Plans into Action,” HR Magazine, April 2013, pp. 27–31.

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 Approaches to Measuring Performance 14

The Results Approach (continued)

• Balanced scorecard:
• Four perspectives of performance:
1. Financial.

2. Customer.

3. Internal or operations.

4. Learning and growth.

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 Approaches to Measuring Performance 15

The Results Approach (continued)

• Productivity Measurement and Evaluation System (ProMES):
1. Identify products or set of activities or objectives the
organization expects to accomplish.
2. Define indicators of the products.
3. Establish contingencies between the amount of indicators and
level of evaluation associated with that amount.
4. Develop a feedback system.

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 Figure 8.5 Increases in Productivity for a Repair Shop
Using ProMES Measures

SOURCE: P. Pritchard, S. Jones, P. Roth, K. Stuebing, and S. Ekeberg, “The Evaluation of an Integrated Approach to Measuring Organizational Productivity,” Personnel Psychology,
42, (1989), pp. 69–115.

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 Approaches to Measuring Performance 16

The Results Approach (continued)

• Evaluation of the results approach:
• Minimizes subjectivity.
• Links individual’s results with organization’s strategies and goals.
• Challenges:
• Can be both contaminated and deficient.

• Individuals may focus only on aspects of performance that are

measured and neglecting others.

• Feedback may not help employees learn how to change behavior to

increase performance.

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 Approaches to Measuring Performance 17

The Quality Approach:

• Customer orientation.
• Prevention approach to errors.
• Continuous improvement.
• Primary goal is improving customer satisfaction.

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 Approaches to Measuring Performance 18

The Quality Approach (continued)

• Many performance management systems are incompatible
with quality approach.
• Major focus should be to provide employees with
feedback:
• Subjective feedback from managers, peers, and customers
about personal qualities.
• Objective feedback based on work process using statistical
process control methods.

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 Approaches to Measuring Performance 19

The Quality Approach (continued)

• Statistical process control techniques:
• Process-flow analysis.
• Cause-and-effect diagrams.
• Pareto charts.
• Control charts.
• Histograms.
• Scattergrams.

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 Figure 8.6 Pareto Chart

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 Figure 8.7 Control Chart

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 Approaches to Measuring Performance 20

The Quality Approach (continued)

• Evaluation of the quality approach:
• Adopts a systems-oriented focus.
• Advocates evaluation of personal traits, which are difficult to
relate to job performance except in work teams.

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 Choosing a Source for Performance
Information 1

Managers:
• Most frequently used source of performance information.
• Motivated to make accurate ratings.
• Feedback from supervisors strongly related to performance
and to employee perceptions of appraisal’s accuracy.
• Might not have time to observe performance or may have
bias against employee.

LO 8-7 & 8-8

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 Choosing a Source for Performance
Information 2

Peers:
• Have expert knowledge of job requirements.
• Have most opportunity to observe employee in day-to-day
activities.
• Often in best position to praise and recognize each other’s
performance on daily basis.
• Not expected to provide feedback.
• Bring a different perspective.
• Potential for bias and discomfort evaluating peers.

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 Choosing a Source for Performance
Information 3

Direct Reports:
• Have best opportunity to evaluate how manager treats
employees.
• Upward feedback.
• Gives subordinates power over managers.
• Might lead to emphasis of employee satisfaction over
production.

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 Choosing a Source for Performance
Information 4

Self:
• Not often used as sole source of performance information,
but can still be valuable.
• Tendency toward inflated assessments.

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 Choosing a Source for Performance
Information 5

Customers:
• In service industries, only person present to observe
employee’s performance.
• Service companies use customer evaluations:
• When employee’s job requires direct service to customer or
linking customer to other services within the company.
• When company is interested in gathering information to
determine what products and services customer wants.
• Expensive.

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 Choosing a Source for Performance
Information 6

360-Degree Appraisal:
• Multiple raters (boss, peers, subordinates, customers)
provide input into a manager’s evaluation.
• Minimizes bias.
• Used primarily for strategic and developmental purposes.

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 Use of Technology in Performance
Management 1

Performance Management Systems Technology:

• Web-based systems.
• Social media:
• Social performance management.

• Electronic tracking and monitoring systems.

LO 8-9
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 Use of Technology in Performance
Management 2

Technology Concerns:
• Electronic monitoring systems threaten employees’ right to
privacy and dignity to work without being monitored.
• Time-tracking software may be inaccurate.
• Needless surveilling results in less productivity and
motivation, demoralizes employees, and creates stress.

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 Use of Technology in Performance
Management 3

Reducing Rater Errors, Politics, and Increasing Reliability

and Validity of Ratings
• Heuristics:
• Unconscious bias.
• Appraisal politics.

LO 8-10
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 Table 8.14 Typical Rater Errors

RATER ERROR DESCRIPTION

Similar to me Individuals who are similar to us in race, gender, background, interest,
beliefs, and the like receive higher ratings than those who are not.
Contrast Ratings are influenced by comparison between individuals instead of an
objective standard (for example, employee receives lower-than-
deserved ratings because he or she is compared to outstanding peers).
Leniency Rater gives high ratings to all employees regardless of their
performance.
Strictness Rater gives low ratings to all employees regardless of their
performance.
Central tendency Rater gives middle or average ratings to all employees despite their
performance.
Halo Rater gives employee high ratings on all aspects of performance
because of an overall positive impression of the employee.
Horns Rater gives employee low ratings on all aspects of performance
because of an overall negative impression of the employee.

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 Use of Technology in Performance
Management 4

Reducing Rater Errors, Politics, and Increasing Reliability

and Validity of Ratings (continued)
• Reducing errors:
• Rater error training.
• Rater accuracy training, or frame-of-reference training.
• Unconscious bias training.
• Calibration meetings.

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 Performance Feedback

The Manager’s Role in an Effective Performance Feedback

Process:
• Feedback should be given frequently, not once a year.
• Create the right context for the discussion.
• Ask employee to rate their performance before the session.
• Have ongoing, collaborative performance conversations.
• Recognize effective performance through praise.
• Focus on solving problems.
• Focus feedback on behavior or results, not on the person.
• Minimize criticism.
• Agree to specific goals and set a date to review progress.

LO 8-11
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 What Managers Can Do to Diagnose
Performance Problems and Manage
Employees’ Performance 1

Diagnosing the Causes of Poor Performance:

• Consider whether poor performance is detrimental to
business.
• Determine the cause.
• Meet with employee.

LO 8-12
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 Figure 8.8 Factors to Consider in Analyzing
Poor Performance 1

Input
Does the employee recognize what he or she is supposed to do?
Are the job flow and procedures logical?
Do employees have the resources (tools, equipment, technology, time) needed
for successful performance?
Are other jobs demands interfering with good performance in this are?

Employee Characteristics
Does the employee have the necessary skills and knowledge?
Does the employee know why the desired performance level is important?
Is the employee mentally, physically, and emotionally able to perform at the
expected level?

Feedback
Has the employee been given information about his or her performance?
Is performance feedback relevant, timely, accurate, specific, and understandable?

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 Figure 8.8 Factors to Consider in Analyzing
Poor Performance 2

Performance Standard/Goals
Do performance standards exist?
Does the employee know the desired level of expected performance?
Does the employee believe she or he can reach the performance standard?

Consequences
Are consequences (rewards, incentives) aligned with good performance?
Are the consequences given in a timely manner?
Do work-group or team norms encourage employees not to meet performance
standards?

SOURCES: Based on G. Rummler, “In Search of the Holy Performance Grail,” Training and Development, April 1996, pp. 26–31; C. Reinhart, “How to Leap over Barriers to
Performance,” Training and Development, January 2000, pp. 20–24; F. Wilmouth, C. Prigmore, and M. Bray, “H P T Models: An Overview of the Major Models in the Field,” Performance
Improvement 41 (2002), pp. 14 –21.

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 What Managers Can Do to Diagnose
Performance Problems and Manage
Employees’ Performance 2

Actions for Managing Employees’ Performance:

• Take into account employees’ ability, motivation, or both.
• Solid performers have high ability and high motivation.
• Misdirected effort is motivated but lacks ability.
• Underutilized have ability but lack motivation.
• Deadwood have low ability and motivation.

• Performance improvement plan (PIP).

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 Table 8.17 Ways to Manage Employees’
Performance
Motivation and ability Type of Employee Ways to Manage
High motivation and high ability Solid Performers • Reward good performance.
• Identify development opportunities.
• Provide honest, direct feedback.
Low motivation and high ability Underutilizers • Give honest, direct feedback.
• Provide counseling.
• Use team building and conflict resolution.
• Link rewards to performance outcomes.
• Offer training for needed knowledge or skills.
• Manage stress levels.
High motivation and low ability Misdirected effort • Coaching.
• Frequent performance feedback.
• Goal setting.
• Training or temporary assignment for skill development.
• Restructured job assignment.
Low motivation and low ability Deadwood • Withholding pay increases.
• Demotion.
• Outplacement.
• Firing.
• Specific, direct feedback on performance problems.

SOURCES: Based on M. London, Job Feedback (Mahwah, NJ: Lawrence Erlbaum Associates, 1997), pp. 96–97; H. Aguinis and E. O’Boyle, Jr., “Star Performers in the Twenty-First
Century,” Personnel Psychology 67 (2014), pp. 313–50; D. Grote, How to Be Good at Performance Appraisals (Boston: Harvard University Press, 2011); J. Conger and A. Church,
“The 3 Types of C Players and What to Do About Them,” February 1, 2018, from https://hbr.org, accessed January 10, 2019.

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 Developing and Implementing a System That
Follows Legal Guidelines
Suits Related to Performance Management:
• Discrimination:
• Based on age, race, gender, or national origin.

• Unjust dismissal:
• Dismissal for reasons other than those employer claims.

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