Performance Management Survey

SOCIETY FOR HUMAN RESOURCE MANAGEMENT
Research
Performance Management Survey
SHRM / PDI Peformance Management Survey
Contents
3
About This Report
Sponsors
A Message from the SHRM Foundation
Executive Summary
Survey Results
7
11
13
Overall Characteristics of Performance Management Systems

7
System Objectives: Employees Come First
Satisfied With Appraisals; Dissatisfied With Development
More Executive Support Required
Top Effectiveness Measures
11
System Components Are Integrated
Planning and Evaluation

11
Performance Planning and Evaluation: Executives Have the Edge
12
Development and Career Planning: A Need to Focus on the Future
Development
13
Classroom Training Popular and Preferred
14
The Fully Developed Executive?
15
Lack of Training in Feedback and Coaching
15
Rewards: Performance Pay Common At All Levels
15
Technology Industries: Champion for Non-Exempt Employees
16
The Future: More 360-Degree Feedback
18
Conclusion
19
Demographics
20
A Message from Personnel Decisions International
21
Sample Questionnaire
26
Appendix
Society for Human Resource Management and Personnel Decisions International
About This Report
he Society for Human Resource Management

(SHRM), with partial funding from the
SHRM Foundation, and Personnel Decisions
International (PDI) co-sponsored the 2000 Performance Management Survey to gather information on
performance management in todays workplace.
The following report provides an analysis of the survey results, based on the responses of 480 human
resource (HR) professionals.
The traditional focus of performance management
systems has been on performance planning and evaluation, rewards and discipline. In developing this survey, SHRM and PDI decided to focus on a more contemporary viewpoint of performance management. In
addition to the traditional aspects, this survey covers
development and career planning, feedback, coaching, training and development methods.
The study objectives were to:
measure current and best practices in performance management;
measure how organizations view the effectiveness
of their current performance management systems
overall and of specific performance management
tools; and
forecast where activity will be shifting in the near
future.
SHRM and PDI decided to survey SHRM members in organizations that were most likely to have
performance management systems in placethose
organizations with 100 or more employees. In July
2000, questionnaires were faxed to 2,710 SHRM
members: one-third each from organizations with
100-499 employees, 500-2,499 employees and
2,500+ employees. Respondents could choose
between two survey completion methods: paper or
online. Of the 480 HR professionals responding to
the questionnaire, 75% completed the paper survey
and 25% completed the web survey.
The survey report contains numerous tables
and charts that capture the participants responses.
Several comparisons based on organization size are
made throughout the report. To see key data categorized by organization size, please visit either of
the following web sites: www.shrm.org/surveys/ or
www.personneldecisions.com. In addition,
throughout the report readers are posed questions
about their own organizations performance management practices in order to enhance the usefulness of the survey results. Also, the report includes
a copy of the survey questionnaire and an appendix that contains white papers relating to performance management.
A Report from the SHRM Survey Program
Sponsors
he Society for Human Resource Management (SHRM) is the leading voice of the
human resource profession. SHRM provides education and information services, conferences and seminars, government and media
representation, online services and publications
to more than 140,000 professional and student
members throughout the world. The Society,
the worlds largest human resource management association, is a founding member of the
North American Human Resource Management
Association (NAHRMA) and the World Federation of Personnel Management Associations
(WFPMA).
The SHRM Foundation is a non-profit organization established in 1966 to fund and support
applied research, publications, scholarships and
educational programs to help HR professionals and
their employers prepare for the future. The Foundations goal is to continuously improve standards
of practice and performance for the HR profession
and to help HR leaders stay current with the latest

developments and trends.
Personnel Decisions International (PDI) is a
global human resources consulting firm. PDI has
helped client organizations meet their business
challenges through integrated solutions to human
resource needs since 1967. PDI works in partnership with clients to:
define successful performance and identify the
capabilities needed to achieve it.
measure performance and capabilities, and evaluate potential.
develop the capabilities needed to be successful
now and in the future.
PDIs goal is to help clients build effective organizations and gain competitive advantage through wisely choosing and effectively developing their most
important assetpeople. For more information
regarding PDI, see A Message from Personnel
Decisions International following the survey report
on page 20.
A Message from the
SHRM Foundation
ts a great time to be a human resource professional. Companies today recognize that people
are the competitive advantage, and HR is being
asked to play a strategic leadership role in shaping
their organizations future. To do this, human
resource professionals will need to continually
expand their knowledge and competencies. Thats
why the SHRM Foundation is so important today.
Investing in Knowledge For Your Future

The SHRM Foundation is a 501(c)(3) non-profit
organization that promotes research and development in the human resource field. The SHRM
Foundation advances the profession and increases
the knowledge and effectiveness of human
resource professionals through its funding of leading-edge human resource research, publications
and educational initiatives.
Sponsorship of the SHRM Survey Program

As a sponsor of the SHRM Survey program, the
SHRM Foundation is able to provide timely
research findings on important issues to SHRM
members on a regular basis. For example, the following SHRM and Personnel Decisions International (PDI) survey on performance management systems offers rich insights into the importance of
employee-oriented performance systems in todays
highly competitive work environment.
The survey findings reveal that employees today
want to know the answer to the question made
famous by Ed Koch, former Mayor of New York
City: How am I doing? Like Koch, employees
want feedback about their performance and what
the organization expects of them. Furthermore,
employees want information about what they need
to do to develop as leaders and to increase their
value as employees. This important survey provides
food for thought for HR professionals especially
the inclusion of development as part of performance management systems.
Foundation-Related Research Projects

The SHRM/PDI survey on performance management systems is part of the larger human resource
issues on productivity and career development. The
SHRM Foundation is particularly interested in
understanding more about the attitudes of employees today, especially in relationship to the organization. For example, here are two Foundation
research projects currently underway that explore
this issue in more detail:
Changing Nature of the Employment Relationship : by
Lynn M. Shore, Ph.D., Lois E. Tetrick, Ph.D., and Sandy
J. Wayne, Ph.D.
In the competition for talent, it is increasingly important
for organizations to understand the changing nature of
the employment relationship. The employment relationship
refers to employees perceptions of what they owe the organization and what the organization owes them in return.
The proposed research examines how HR practices help
form the employment relationship, which in turn, influences organizational outcomes (commitment, performance,
citizenship, turnover).
Voluntary Turnover, Workforce Productivity and Organizational Performance: Investigating the Role of HR Management Investments: by Jason Shaw, Ph.D.
This research project investigates the relationships between
voluntary turnover and organizational performance in a
survey study of 1,200 motor carriers, supplemented by two
archival data sources. Results will enhance the scientific
knowledge base and provide value for practitioners making HRM decisions that impact bottom line performance.
For More Information

Contact the SHRM Foundation for more information about these and other research projects by emailing speyton@shrm.org. Thank you for your
support of the SHRM Foundation and your commitment to excellence in the profession.
Executive Summary
he 2000 Performance Management Survey

showed that performance management in
organizations is evolving from a system dominated by the performance appraisal to a system that
focuses on employee development. However, the
transition is far from complete. Stronger executive
support for performance management and
increased employee participation in development
activities is needed in order for performance management systems to truly become a tool to help
attract and retain talent.
Seventy-five
percent of participants reported that

most of their executives had performance goals
linked to operating results, compared to 36% for
exempt employees and 17% for non-exempt
employees.
Development planning and career planning efforts
were limited. Twenty-five percent of participating
organizations had written development plans for all
executives, and a mere 8% of respondents organizations had career plans for all executives.
Development
Overall Characteristics of
Performance Management Systems
Respondents
gave top priority to performance

management system objectives focused on
employees rather than managers.
Respondents were significantly more satisfied with
traditional system components performance
planning and evaluations, discipline compared
with developmental components leadership
development, development planning, 360-degree
feedback, and coaching.
Executive support for performance management
was lacking. HR professionals reported that many
executives and senior managers did not endorse
or even use their performance management system.
Planning and Evaluation
Seven
out of 10 respondents reported that their

organizations had written performance plans for
most executives. Nearly two-thirds (64%) had performance plans for most exempt employees, and nearly
half (45%) had plans for non-exempt employees.
Classroom training was the most popular method

for professional development. Eighty-six percent of
respondents organizations conducted in-house
classroom training and 84% had employees participate in external classroom training.
On-the-job training and in-house classroom training were rated as the most effective professional
development methods. Independent study both
traditional and online was viewed as the least
effective development method.
Respondents reported that a lower percentage of
executives at their organizations compared with
exempt and non-exempt employeesparticipated
in most development activities.
The Future
360-degree feedback
was the only specific performance management area where companies

planned to increase their activity during the next
year. 360-degree feedback was used by only onethird of respondents organizations.
Survey Results
n todays tight labor market, the ability to

attract and retain valuable employees is a source
of competitive advantage for organizations in
every industry. One key to attracting and retaining
high-performing employees is to provide strong
support for their best performance: define and
establish clear performance goals; track progress
and give relevant, useful feedback; and develop
employees to meet or exceed the companys goals
and their own personal career goals.
The traditional approach to providing such support has been in the form of performance management systems. But what are HR professionals
objectives for their performance management systems? What are the current and best practices in
performance management? How effective do
human resource professionals think that their current performance management systems are both
overall and with regard to specific tools? What are
the greatest challenges to improving performance
management systems? In which area of performance management will HR professionals concentrate their efforts in the near future?
To answer these questions, the Society for
Human Resource Management (SHRM) and Personnel Decisions International (PDI) conducted
the 2000 Performance Management Survey. Survey
respondents shared their insights on current prac-
tices and anticipated activity in performance management. The following pages report the results of
this survey.
OVERALL CHARACTERISTICS OF
PERFORMANCE MANAGEMENT SYSTEMS
System Objectives: Employees Come First
Survey participants believed that performance management systems should focus on the employee.
Respondents were asked to place seven performance management system objectives in rank order
based on their importance (1 being most important; 7 being least important). Results showed that
the highest ranked objectives for performance management systems were employee-oriented:
Provide information to employees about perceptions of their performance.
Clarify organizational expectations of employees.
Provide information to employees about their
development needs.
Those objectives focused on providing information to managers were ranked lower by survey
respondents. For example, documenting performance for employee records and providing information to managers for making promotion/demotion decisions ranked sixth and seventh, respectively (see Figure 1).
Figure 1: Objectives of Performance Management System

Objectives
Average
Rank
Provide information to employees about their performance
2.8
Clarify organizational expectations of employees
2.8
Identify developmental needs
3.7
Gather information for pay decisions
4.0
Gather information for coaching
4.2
Document performance for employee records
4.6
5.2
Gather information for promotion decisions
Source: SHRM /PDI 2000 Performance Management Survey
Satisfied With Appraisals;

Dissatisfied With Development
Respondents were asked to rate their satisfaction
with each of 10 performance management system
components and their system as a whole. Respondents were significantly more satisfied with traditional performance management system components than with developmental components. For
example, a majority of respondents were either
satisfied or very satisfied with their organizations
performance evaluations (61%), performance
planning (51%), and discipline (51%), while only
one in three were satisfied or very satisfied with
leadership development (38%), development
planning (34%), 360- degree feedback (33%), and
coaching (33%) (see Figure 2). This may be due to
the fact that organizations have been using traditional methods for a longer period of time, and
that many organizations have only recently started
thinking about development as part of their performance management systems.
This presents a gap between what HR professionals ranked as their most important objectives
for their performance management systems and
how their systems are actually working. They tended to be less satisfied with the developmental areas
precisely those areas critical to achieving their
objectives of providing information to employees
about perceptions of their performance and about
their development needs (e.g., 360 - degree feedback, development planning and coaching).
If employees come first, should the focus of these systems
shift to development from appraisal? Or can a system
accomplish both?
One-third (32%) of survey respondents were
unsatisfied or very unsatisfied with their overall
performance management system. This dissatisfaction can largely be attributed to dissatisfaction
with the developmental components of the system
leadership development, coaching, 360-degree
Figure 2: System Satisfaction
51%
51%
50%
49%
47%
46%
33%
360-degree Feedback
33%
Coaching
System Components
34%
Development
Planning
Rewards
Overall
Training
Informal
Feedback
Discipline
20 %
Leadership
Development
38%
40 %
Performance
Planning
Low
61%
60 %
Performance
Evaluation
Percent Satisfied and

Percent Very Satisfied
High 80 %
feedback, and development planning. Many survey respondents recognized that employee development needed to be viewed as a retention strategy. Employees continue working for organizations
where they feel they are: being adequately challenged, learning new skills and capabilities, supported and coached by their manager, and progressing toward their career goals.
More Executive Support Required

Clearly, executive support of performance management is critical to system success. However,
results showed that respondents believed such support was absent. In an open-ended question,
respondents were asked to list the greatest challenge to improving their performance management system. Many survey respondents focused on
executive/management support. For example,
one in four respondents (22%) explicitly mentioned that their greatest challenge was lack of
support/endorsement from top management,
17% reported that their performance manage-
ment system was undervalued in the company,

and 14% stated that lack of system use by management was an obstacle (see Figure 3).
Survey results showed that there is room for
improvement with regard to executive support of
performance management systems at respondents
organizations. At 42% of participating organizations, executives did not review the performance
management system at all (see Figure 4). Survey
respondents recognized that executives needed to
actively use the system and publicly support it in
order for the system to have credibility.
How would a change in executive behavior toward performance management improve its results? What would
you have executives do differently?
Top Effectiveness Measures

Respondents were asked in an open-ended question how the effectiveness of their performance
management system was measured. Thirty percent
Figure 3: Future Challenges

25%
22%
20%
Percent of
Organizations
17%
14%
15%
13%
13%
13%
11%
10%
Requires too
much time
Require new/upgraded
system
Lack of training
Difficult to create
performance goals
Lack of use by
management
Performance management
undervalued in company
0%
Lack of upper
management support
5%

9
Figure 4: Review by Management

60%
52%
50%
Percent of
Organizations
42%
40%
37%
Sr. Management
30%
HR Management
19%
20%
15%
17%
12%
10%
0%
6%
Not Reviewed
Annual
Biennial
More Frequent
Frequency of Review
Figure 5: Measures of System Effectiveness

35%
30%
22%
19%
20%
18%
15%
12%
8%
7%
7%
5%
5%
3%
2%
2%
Productivity
Changes
10%
Training Needs
Percent of
Organizations
25%
Too New to
Measure
30%
Method
10
Compared with
Compensation
Review Ratings
Distribution
Turnover/Retention
Informal
Discussions
Compared with
Business Goals
Survey or Focus
Group
Compared with
Performance Goals
Forms Completion
Informal Feedback
0%
of respondents listed informal feedback and 22%

listed forms completion/timeliness of forms as the
method used to measure effectiveness of the system. Other measures are listed in Figure 5.
System Components Are Integrated

When asked how well their performance management system components were integrated, 44% of
respondents reported that their components were
integrated or well integrated. Thirty-eight percent
of respondents reported an average level of integration for system components (see Figure 6).
PLANNING AND EVALUATION

Performance Planning & Evaluation:
Executives Have the Edge
Seven out of 10 respondents reported that their
organizations had written performance plans for
most at least three out of four of their executives. Nearly two-thirds (64%) of respondents
organizations had performance plans for most
exempt employees, and nearly half (45%) had
plans for most non-exempt employees.
A disparity between executives and non-exempt

employees existed in terms of linking performance goals to operating results. Seventy-five percent of participants reported that most at least
three out of four of their executives had performance goals linked to operating results. Thirty-six
percent of participating organizations linked performance goals to operating results for exempt
employees and 17% of respondents organizations
had performance goals linked to operating results
for non-exempt employees. While it is true that
executives often have more influence related to
reaching operating results, non-exempt employees
may feel disenfranchised because fewer of them
have stated performance goals that are directly
connected to business results.
If non-exempt employees are typically a large percentage of
the employee population and so few have goals related to
operating results, is the linkage really necessary?
Survey data showed equality across job levels as to
who has input into performance evaluations.
Approximately half of executives (55%), exempt
Figure 6: Integration of System
Well
Integrated
15%
Integrated
29%
Not
Integrated
4%
Weakly
Integrated
14%
Average
38%

11
(61%), and non-exempt (53%) employees had

input into their own performance evaluations.
Across all job levels, the direct supervisor had the
most input into performance evaluations (Figure 7).
Performance plans and evaluations were largely
done on an annual basis, with 85% of respondents organizations preparing performance evaluations and reviewing performance plans/goals
annually for all employees. This leaves an opportunity for organizations/managers to review performance more often than once a year to check
progress and to avoid annual surprises during
performance review conversations.
Are there pockets of success in your organization that
can be explained by the informal impact of a great manager? What does this say about formalizing the review
process is it really necessary? How can you transfer
this success to other parts of your organization?
Development & Career Planning:

A Need to Focus on the Future
According to survey results, 25% of participating
organizations had written development plans for
all executives compared with 17% for all exempt
employees and 12% for all non-exempt employees. These percentages were even lower for organizations with 100-499 employees (23% for executives, 13% for exempt and 9% for non-exempt).
Development plans were typically prepared and
reviewed annually.
Career plans were even less commonly used
than development plans. Sixty-three percent of
respondents reported that their organizations did
not have career plans for executives compared
with 66% for exempt employees and 73% for nonexempt employees. A mere 8% of respondents
organizations had career plans for all executives
and only 3% had career plans for all exempt and
non-exempt employees.
93%
96%
96%
55%
61%
53%
49%
12
Executives
Exempt
Non-Exempt
Group
9%
4%
5%
Others
9%
13%
10%
14%
12%
4%
Reports
Customers
17%
16%
10%
Peers
Self
35%
33%
Other Management
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Supervisor
Percent of
Organizations
Figure 7: Input into Appraisals
Organizations appear to be missing a key

opportunity to retain employees. Employees who
work for organizations that actively partner with
them to create development and career opportunities are more likely to stay. This is supported by
a 2000 SHRM Retention Practices Survey finding that
a primary reason why employees voluntarily resign
from their positions is to pursue career opportunities elsewhere.
DEVELOPMENT
Classroom Training Popular and Preferred
Survey results showed that classroom training
reigns as the most popular method of professional
development. Eighty-six percent of respondents
organizations conducted in-house classroom train-
ing and 84% had employees participate in external classroom training. Coaching from managers
and on-the-job training/action learning ranked
next in terms of usage. The development method
used least by respondents was externally hired
coaches (28%) (see Figure 8). Organizations with
2,500+ employees had the highest usage level for
all development methods except external classroom training. Smaller organizations (with 100499 employees) had the lowest usage level for inhouse classroom training (83%), traditional independent study (53%), online independent study
(34%), and externally hired coaches (17%).
Respondents were asked to rate the effectiveness
of eight professional development methods on a
scale from 1 to 5, where 1 is not at all effective
and 5 is very effective. Survey respondents
86%
84%
76%
74%
58%
44%
28%
External
Coaching
Job
Assignments
Online
Independent
Study
Traditional
Independent
Study
On-the-job Training/
Action Learning
Manager
Coaches
34%
External
Classroom
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
In-house
Classroom
Percent of
Organizations
Figure 8: Development Method Usage
13
viewed on-the-job training and in-house classroom

training as the most effective professional development methods, with an average 3.90 effectiveness
rating. They viewed independent study both
traditional and online as the least effective
development method (see Figure 9).
What keeps people from actively pursuing their own
learning through independent study?
cant amount of time in the classroom. On average,

exempt employees spent 2.6 days per year in classroom training compared to 2.3 days for executives
and 2.1 days for non-exempt employees. Employees at organizations with more than 2,500 employees spent more time in the classroom on average
compared with smaller organizations (see Figure
10).
The Fully Developed Executive?

Although classroom training is popular and
preferred, employees are not spending a signifi-
Compared to exempt and non-exempt employees,

fewer respondents reported that executives at
Figure 9: Development Method Effectiveness

5
3.85
3.79
3.78
3.77
3.60
3.30
3.27
Traditional
Independent
Study
3.90
Online
Independent
Study
Average Rating
14
External
Coaching
Job
Assignments
External
Classroom
Manager
Coaches
In-house
Classroom
Action
Learning/
OTJ Training
their companies participated in development

activities such as in-house classroom training, independent study, coaching provided by internal personnel, job assignments, and action learning/onthe-job training. The only development method
that executives used more than other job levels
was externally hired coaches of the respondents who do hire external coaches, 90% reported
that executives at their organizations use external
coaching as a developmental tool.
Exempt employees led the way in terms of participating in development activities. Nearly all
respondents reported that exempt employees at
their organizations participated in the following
development methods: in-house classroom training (95%), online independent study (94%),
external classroom training (93%), coaching provided by managers (92%), and traditional independent study (91%).
Non-exempt employees had the highest level of
participation for on-the-job training (91%), and
the lowest level of participation for external classroom training (74%) and external coaches (26%).
used internal coaching, yet only one-third of executives, managers and supervisors at their organizations were trained in coaching others. The challenge for organizations is to insure that all executives, managers and supervisors are using best
practices and appropriate methods in providing
feedback and coaching.
If your managers are trained in coaching and giving
feedback, how well are they doing it? If they need improvement, what will it take to help them be their best?
Rewards: Performance Pay

Common at All Levels
Most participating organizations used performance bonus pay at all levels. For example, 86%
used bonus pay for executives, 83% used it for
exempt employees and 68% used it for nonexempt employees. The usage level for performance bonus pay was even higher at large organizations and those in the technology industry. The
most popular types of performance bonus pay for
all levels were based on individual performance,
profit sharing, and team performance.
Lack of Training in Feedback and Coaching

On average, approximately half of executives,
managers and supervisors in participating organizations were trained in providing feedback. Three
out of four respondents organizations (75%)
Technology Industries: Champion for NonExempt Employees

Technology industries (e.g., finance, insurance,
high tech/computers, and telecommunications;
Figure 10: Average Annual Classroom Training Hours, by Job Level

Organization Size
Job Level
< 100
Employees
(n=26)
100-499
Employees
(n=142)
500-2,499
Employees
(n=126)
2,500 +
Employees
(n=160)
Overall
Survey
Average
(n=454)
Executives
15.8 hours
16.3 hours
16.7 hours
22.5 hours
18.6 hours
Exempt
21.9 hours
19.3 hours
18.6 hours
24.2 hours
21.0 hours
Non-Exempt
16.0 hours
17.2 hours
14.8 hours
19.1 hours
17.2 hours

15
organizations producing or highly dependent on

rapidly changing technology) as a group led the
way in using performance management tools for
non-exempt employees, according to survey
results.
The technology industry group also had the
highest usage and satisfaction levels for all development methods other than job assignments. Not
surprisingly, the biggest usage gap was in online
independent study. Fifty-seven percent of technol-
ogy organizations reported using online independent study, compared with 41% of manufacturing
organizations and 42% of services organizations.
The technology industry group also had the highest average annual classroom training hours for all
levels (see Figure 11).
The Future: More 360-Degree Feedback

According to survey results, 360-degree feedback
was used by only one-third of respondents organi-
Figure 11: Usage of Performance Management Tools, by Industry Group
Performance Management Tool
Technology
Industry Group
(n=99)
Services/Other
Industry Group
(n=192)
Performance plans for most*

non-exempt employees
60%
37%
46%
Development plans for most*

26%
17%
16%
Career plans for

35%
27%
21%
Link performance goals to operating

results for non-exempt employees
77%
63%
53%
Performance pay for

89%
71%
53%
Online independent study
57%
41%
42%
Classroom training, average annual

hours per employee
Executives
Exempt employees
Non-exempt employees
21 hours
26 hours
23 hours
*Denotes at least three out of four non-exempt employees

16
Manufacturing
Industry Group
(n=166)
18 hours
20 hours
16 hours
17 hours
20 hours
16 hours
zations for executives (32%) and exempt employees (29%), and only one-fifth (18%) of respondents organizations for non-exempt employees
(see Figure 12). Larger organizations (with 2,500+
employees) tended to use 360-degree feedback to
determine development needs and career plans.
Respondents from mid-sized organizations (5002,499 employees) reported the highest usage level
for determining pay changes. Smaller organizations (100-499 employees) tended to use 360degree feedback to evaluate performance.
Although current usage is low, the near future

looks bright for 360-degree feedback. Data shows
it is the only specific performance management
area where organizations planned to increase their
activity during the next year. This is especially true
for smaller organizations (with fewer than 2,500
employees). Longer term, there is opportunity for
organizations to shore up their efforts in the other
developmental areas that exhibited dissatisfaction
such as leadership development, development
planning and coaching.
Figure 12: Usage of 360-Degree Feedback

90%
82%
Percent of
Organizations
80%
70%
68%
Executives
Exempt
Non-exempt
71%
60%
50%
40%
32%
30%
29%
18%
20%
10%
0%
Uses
Does Not Use
Usage
17
Conclusion
The 2000 Performance Management Survey showed
that performance management in organizations is
in transition from a system dominated by the performance appraisal to a more comprehensive
human resource management system that
includes activities such as development and career
planning, leadership development, coaching and
360-degree feedback. However, the transition is far
from complete.
The biggest challenge facing HR professionals
as they make this transition is to gain executive
support for performance management systems.
Currently, many executives are not reviewing or
using the system, nor are they participating in
development activities as much as other job levels.
Executives need to be active role models for performance management and publicly support it in
order for systems to have credibility.
According to survey results, the most important
performance management system objectives were
18
employee-focused. However, HR professionals

were not satisfied with system components that
were most likely to help employees improve their
performance coaching, leadership development, 360-degree feedback and development
planning. This dissatisfaction may be due to the
fact that many organizations have been using traditional methods (e.g. performance appraisals, discipline) for a longer period of time and have only
recently started to use developmental tools as part
of their performance management system.
Several performance management system
aspects require additional focus, including
increased support and review from senior management, more emphasis on formal feedback systems,
development and career planning. These aspects
will allow the performance management system to
reach its full potential as a tool to fully utilize the
potential of the existing workforce, to retain current employees and to attract additional talent as
necessary.
Demographics
Number of Employees Total Company:
Fewer than 100 employees
100 to 499 employees
1,000 to 2,499 employees
2%
31%
14%
13%

10,000+ employees
No response
8%
7%
20%
5%
Number of Employees This Location:

Fewer than 100 employees
15%
45%
16%
11%

10,000+ employees
No response
4%
3%
2%
4%
59%
More than 50% of exempt

employees in unions
No response
9%
6%
Wholesale/Retail
Education
Government
Telecommunications
Utilities
Agriculture/Other
No response
4%
3%
3%
2%
2%
1%
4%
Unionization (exempt employees in unions):

None
Less than 10% of exempt
employees in unions
11 to 50% of exempt
employees in unions
Type of Organization:
Manufacturing
Finance/Insurance
Health Care
Servicesprofit
High Tech/Computers
Nonprofit
Transportation
12%
14%
35%
13%
11%
9%
5%
4%
4%
19
A Message from PDI

A Message from Personnel Decisions
International (PDI)
In todays workplace, human capital is the primary constraint in meeting organizational goals.
Attracting and retaining talented employees and
maximizing their performance have become of
paramount importance. Thus, the role of HR professionals has never been more crucial to organizational success.
At PDI, we are committed to helping the HR
community succeed and believe that providing useful information, such as the Performance Management Survey, to HR professionals is our most
important role. We are proud and excited to cosponsor the 2000 Performance Management Survey
with SHRM, and are confident that the information
provided in this report has been helpful to you.
Our Performance Management Perspective

PDI is dedicated to advancing performance management practices. We believe that a holistic approach
to performance management that focuses on defining, measuring and, most importantly, developing
capabilities is key to success. Our goal is to help our
clients to advance their performance management
processes so far that performance evaluations are no
longer needed employees will receive feedback
and develop capabilities daily, thereby eliminating
the need for an annual evaluation.
20
About PDI
Personnel Decisions International (PDI) is a global
human resources consulting firm. Our services and
tools are developed out of extensive research and
more than 30 years of experience with client organizations around the world. We know our services
are effective because of our on-site, validated results
with real clients in real business situations.
We work in partnership with our clients to pinpoint their business needs, then bring together PDI
consulting, services and tools to meet those needs.
The solutions we create can be applied to individuals, teams and organizations. PDI solutions help
our clients to define, measure and develop capabilities for successful performance.
PDI has more than 20 operating offices around
the world. Each office is staffed with consulting psychologists experienced in the cultures of their particular region. Every PDI client is served by a team
of people selected from one or several offices for
the expertise required by the clients business need.
For More Information:

Contact PDI for more information about our capabilities related to performance management or
other business challenges. Call 1-800-633-4410 or
visit our web site at www.personneldecisions.com
for further information.
SHRM/PDI
Performance Management Survey
Summer 2000
Thank you for participating in the SHRM/PDI Performance Management Survey 2000.
The objective of this survey is to understand current practices in the entire area of
performance management, including performance planning and evaluation; development
and career planning; feedback, coaching, training and development, and rewards. All
responses are confidential.
Please complete the survey by July 28, 2000 and fax back to SHRM at (703) 836-0367 or mail to
SHRM, Survey Research, 1800 Duke Street, Alexandria, VA 22314. Or you may complete this
survey online at http://www.surveyhost.com/perform/. Your password is "survey".
If you have any questions about the survey, call Tom Eckstein or Sarah Kiecker, representatives for
PDI, at 800-750-4077.
1. Overall Characteristics of your Performance Management System
1a. Using the following scale, please rate your
satisfaction with the following parts of your
current performance management system.
(Check one box per row.)
Performance planning/goal setting
.....
Performance evaluation . . . . . . . . . . . . . . . . .
Development planning . . . . . . . . . . . . . . . . .
360-degree feedback . . . . . . . . . . . . . . . . . .
Informal feedback . . . . . . . . . . . . . . . . . . . . .
Coaching and/or Mentoring . . . . . . . . . . . . .
Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leadership development . . . . . . . . . . . . . . . .
Rewards . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Discipline . . . . . . . . . . . . . . . . . . . . . . . . . . .
Overall performance management system . .
1b. How frequently is the effectiveness of your
Performance Management System reviewed
by
Senior Company Executives?
...
Human Resources? . . . . . . . . . . . . . . .
Very
Unsatisfied
Quarterly
.Neither
SemiAnnually
Annually
Very
Satisfied
NA
Every 2
Years
Not
Reviewed
Average
Well
Integrated
1c. How is the effectiveness of your Performance Management System measured?
1d. In your opinion, how well integrated with each other are the
components of your performance management system
(performance planning and evaluation; development and career
planning; feedback, coaching, training and development, and
rewards)? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Not
Integrated
1
1e. Rank the importance of the following performance management system

objectives. Place a "1" next to the objective that's most important, a "2"
next to the objective that's second most important, etc. If any item listed
below is not an objective of your organization's performance management
system, check the box labeled "NA" (not applicable) in the second column.
Clarify organizational expectations of employees
..............
NA
Provide information to managers for coaching purposes. . . . . . . . . . . . .

Provide information to managers for making pay decisions . . . . . . . . . .
Provide information to managers for making promotion/demotion
decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provide documentation on performance for employee records. . . . . . . .
Provide information to employees about perceptions of their
performance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Provide information to employees about their development needs. . . . .
Other
2. Characteristics of Performance Planning/Goal Setting and Evaluation
2a. What percentage of employees from each of
the following groups have WRITTEN
<
10% - 25% - 50% - 75% performance or goal plans? (Check one box
None
10%
24%
49%
74%
99%
All
per row.)
Senior Executives
..............
Exempt . . . . . . . . . . . . . . . . . . . . . . . . .
Non-Exempt . . . . . . . . . . . . . . . . . . . . .
2b. How frequently are performance evaluations
SemiEvery 2
conducted for employees in the following groups?
Quarterly annually Annually Years
Other
Senior Executives
...................
Exempt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-Exempt . . . . . . . . . . . . . . . . . . . . . . . . . .
How
frequently are performance plans/goals
2c.
SemiEvery 2
reviewed with employees from the following
Quarterly annually Annually Years
Other
groups? (Check one box per row.)
Senior Executives
...................
Exempt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-Exempt . . . . . . . . . . . . . . . . . . . . . . . . . .
2d. What percentage of performance plans for
employees in the following groups have
<
10% - 25% - 50% - 75% performance targets directly connected to
None
10%
24%
49%
74%
99%
All
operating results? (Check one box per row.)
Senior Executives
..............
Exempt . . . . . . . . . . . . . . . . . . . . . . . . .
Non-Exempt . . . . . . . . . . . . . . . . . . . . .
2e. Who has direct input into the performance
evaluation process? (Check ALL that
apply in each row.)
Senior Executives evaluations
..
Exempt evaluations . . . . . . . . . . . . . .
Non-Exempt evaluations . . . . . . . . . .
Direct Other
Super- Managevisor
ment
Self
Complete and return by July 28, 2000
Direct CustPeers Reports omers
Others
3. Characteristics of Development and Career Planning

3a. Percent of employees from each group with
a WRITTEN development plan for next 12
None
to 18 months? (Check one box per row.)
Senior Executives
..............
Exempt . . . . . . . . . . . . . . . . . . . . . . . . .
Non-Exempt . . . . . . . . . . . . . . . . . . . . .
3d. Percent of employees from each group with

a WRITTEN career plan for next 2 to 5
years? (Check one box per row.)
Senior Executives
..............
Exempt . . . . . . . . . . . . . . . . . . . . . . . . .
Non-Exempt . . . . . . . . . . . . . . . . . . . . .
10% 24%
25% 49%
50% 74%
75% 99%
All
SemiEvery 2
Not
Quarterly Annually Annually Years Reviewed
3b. How frequently are development plans prepared

for each group? (Check one box per row.)
Senior Executives
..................
Exempt . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-exempt . . . . . . . . . . . . . . . . . . . . . . . . .
3c. How frequently are development plans reviewed
for each group? (Check one box per row.)
Senior Executives
.................
Exempt . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-exempt . . . . . . . . . . . . . . . . . . . . . . . . .
<
10%
SemiEvery 2
Not
Quarterly Annually Annually Years Reviewed
None
<
10%
10% 24%
25% 49%
50% 74%
75% 99%
All
4. Characteristics of Feedback, Coaching and T&D

4a. Which of the following development methods are used in your organization?
(Check yes or no in the first two columns below for all that are used.)
4b. For each method used in your organization, please indicate which employee groups participate.
(Check all groups participating in the last three columns below.)
Yes
No
Sr.
Execs.
Exempt
Nonexempt
In-house, instructor-led classroom programs . . . . . .

External instructor-led classroom programs . . . . . . .
Independent study using traditional methods . . . . . .
Independent study using online materials . . . . . . . .
Externally-hired coaches . . . . . . . . . . . . . . . . . . . . .
Internal Coaches (HR, managers or other employees)
Systematic job assignments, job rotation . . . . . . . . .
Action Learning and other On-the-Job training . . . .
4c. How effective do you believe the following development methods are as used by your organization?
Not at all
Somewhat
Very
Effective . Effective . Effective NA
In-house, instructor-led classroom programs . . . . . . . . .

External, instructor-led classroom programs . . . . . . . . . .
Independent study using traditional methods . . . . . . . . .
Independent study using online materials . . . . . . . . . . . .
Externally-hired coaches . . . . . . . . . . . . . . . . . . . . . . . . .
Internal coaches (HR, managers, other employees) . . . .
Systematic job assignments, job rotation . . . . . . . . . . . .
Action Learning and other On-the-job training . . . . . . . .
4d. Percent of employees from each of the

following groups who are trained to provide
feedback to others? (Check one box per
row.)
Senior Executives
..............
Managers . . . . . . . . . . . . . . . . . . . . . . .
First-Line Supervisors . . . . . . . . . . . . .
4e. Percent of employees from each of the
following groups who are trained to coach
or mentor others? (Check one box per
row.)
Senior Executives
.............
Managers . . . . . . . . . . . . . . . . . . . . . . .
First-Line Supervisors . . . . . . . . . . . . .
None
None
4f. Average number of hours of overall classroom

training provided per year for each employee group?
Senior Executives
....................
Exempt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Non-Exempt . . . . . . . . . . . . . . . . . . . . . . . . . . .
4g. What percent of the following employee
groups receive formal 360-degree
feedback? (Check one box in each
row.)
Senior Executives
..........
Exempt . . . . . . . . . . . . . . . . . . . . .
Non-Exempt . . . . . . . . . . . . . . . . .
4h. How is 360-degree feedback used
for each group? (Check all that
apply.)
Senior Executives
.....
Exempt . . . . . . . . . . . . . . . .
Non-Exempt . . . . . . . . . . . .
None
<
10%
10% 24%
25% 49%
50% 74%
75% 99%
All
<
10%
10% 24%
25% 49%
50% 74%
75% 99%
All
None
< 10
hrs.
11 21 41 20 hrs. 40 hrs. 60 hrs.
> 60
hrs.
<
10%
10% 24%
25% 49%
50% 74%
75% 99%
All
Determine
Evaluate development Determine Determine
performance
needs
pay changes career plan Do not use
5. Characteristics of Rewards
5a. What basis does your organization use for performance bonus pay for the following employee
groups? (Check all that apply per row.)
Team Competency
Individual Performance or Skill
Profit
Senior Execs. . . . . .
Exempt . . . . . . . . . .
Non-Exempt . . . . . .
5b. Describe other performance bonus pay methods used.
Stock
None
Other
6. Future Activities
6a. Using the following scale, please rate how much emphasis your
organization will place on the following parts of its performance
management system in the next year.
Performance planning/goal setting
.........................
Performance evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Development planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
About
the same More
Less
1
1
1
2
2
2
3
3
3
4
4
4
5
5
5
360-degree feedback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Informal feedback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Coaching and/or Mentoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
1
1
2
2
2
3
3
3
4
4
4
5
5
5
Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leadership development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rewards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
1
1
2
2
2
3
3
3
4
4
4
5
5
5
Discipline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Overall performance management system . . . . . . . . . . . . . . . . . . . . . .
1
1
2
2
3
3
4
4
5
5
6b. What do you believe is the greatest challenge to improving your organization's current performance
management system?
7. Organization Characteristics
7a. Number of Employees
in This Location
Less than 100
100 - 499
500 - 999
1,000 - 2,499
2,500 - 4,999
5,000 - 9,999
10,000 and over
7b. Number of Employees

in Entire Organization
7c. Percent of Employees in

Unions
Less than 100

100 - 499
500 - 999
1,000 - 2,499
2,500 - 4,999
5,000 - 9,999
10,000 and over
None
Less than 10%
11 to 50%
Over 50%
7d. Primary Industry

Computers, components and
software
Manufacturing - non-durables
Manufacturing - durables
Telecommunications
Other:
Transportation
Utilities
Wholesale/Retail
Finance
Insurance
Health
Services -- profit
Services -- non-profit
Education
Government
8. Optional
Name:
Phone:
Company:
May we contact you if we need to
clarify any of your answers? . . . . . . . .
Yes
Please fax your responses to 703-836-0367 or mail it to SHRM, Survey Research, 1800 Duke Street,
Alexandria, VA 22314 before July 28, 2000.
Results will be available in October, 2000. SHRM members may obtain the report summarizing survey
results at no cost at www.shrm.org or may purchase a copy from the SHRM Store.
Thank you for your time and experience.
No
A PDI White Paper
PERFORMANCE MANAGEMENT SYSTEMS:

A Vital Key to Retention
By Diane Marentette
Courtesy of Personnel Decisions International
ompetition abounds in the business marketplace as well as in the talent marketplace.

CEO after CEO calls for increased individual
and organizational performance, while at the same
time organizations wage campaigns to win the
hearts and minds of employees and candidates.
With this increased emphasis on performance
improvement, competition for employees, and
intense drive for increased retention, one would
think that organizations would get better at performance management which is one of the primary
organizational processes that can result in real, tangible improvement in performance, attraction, and
retention of employees. Yet, performance management retains its untapped potential because organizations continue to limit it to an HR administrative
system which remains surprisingly unrelated to the
current or future business needs and continue to
focus much of the performance management
process on activities which actually serve to demotivate employees.
Strong, effective performance management systems
are one key to attracting and retaining high-value
employees. Employees perform best and stay with
their employer when they receive the proper support from management, and when they know that
their efforts will be rewarded. In an effective performance management system, goals are clearly
defined, progress is tracked, feedback is provided
regularly, performance is evaluated fairly and equitably, and career and development opportunities
are available.
Despite its heightened importance, many companies fail to provide strong performance manage-
26
ment systems. PDI believes that organizations can

dramatically improve the effectiveness and relevance of their performance management processes
by creating the foundation of the system in the
organizations competitive strategy and considering
that performance management actually begins
before employees even join the organization.
PDIs Talent Pipeline (Fig. C) illustrates that by
aligning the business and human capital strategies
of the organization from the start, a company
increases its ability to identify the right people,
make a compelling offer, develop a talent-building
culture, and implement a strategy for maintaining
great talent.
With the Talent Pipeline in mind, two major factors
point toward the problems in todays performance
management systems:
Few performance management systems are linked
to the overall organizations strategy or objectives.
For example, if a companys goal is to develop digital commerce capabilities, its vital for employees
individual performance plans to include developing their personal digital commerce abilities.
Unless this connection between personal and company goals exists, employees can easily feel that they
dont make a difference to the overall goals and
success of their employer.
Too many performance management systems are
focused on measurement rather than development.
Emphasizing evaluation and expectations rather
than personal development puts employees on the
defensive and demotivates them to participate
actively in the process.
There is a better way to get the most from a companys human capital and develop a culture in
which employee training and development is
linked directly to the organizations goals. But
knowing what is wrong with todays performance
management systems and fixing them are two different things. To help find the way, we first need
to explore the weaknesses of traditional performance management systems.
Traditional Performance
Management Systems
A common blueprint for performance management systems includes four phases: performance
planning, ongoing coaching and feedback,
appraisal of accomplishments, and identifying
areas for improvement. Typically, these elements
follow an annual cycle.
The cycle, as illustrated here (Fig. A), begins with
a planning process to set expectations for both the
employee and employer. Throughout the year, the
employees performance is guided through ongo-
ing coaching and feedback. Toward the end of the

cycle, the employees performance is evaluated.
Finally, this evaluation is shared with the employee
to help improve his or her performance.
But something crucial is missing from this blueprint: This traditional system is not configured to
directly support the employers overall goals and
expectations. Beginning employee performance
planning without understanding an organizations
strategy is like pouring concrete for a new buildings foundation before the blueprint is finished.
Securing a strategic foundation will not only build
employees confidence in the relevance of the
process, it will also make it possible to link the
achievement of employees performance goals
directly to the organizations operating results.
Currently, this isnt happening very often, even in
the upper echelons of organizations.
To lay the foundation properly, PDI contends a
company must identify its strategic business goals,
Figure A
THE TRADITIONAL PERFORMANCE MANAGEMENT SYSTEM

Performance
Planning
Identifying areas
for improvement
Ongoing coaching
and feedback
Appraisal of
Accomplishments
27
translate them into business plans, and incorporate them into a Performance Model that
defines the performance needs required to
achieve the organizations expectations and goals.
(See Fig. B)
the true beginning of the performance management cycle. In addition, linking organizational
goals with staff development will help attract executive support for performance management systems.
This performance model will spur top management to recognize the needs of the organization
in human capital terms and understand the
demands the organization will place on its employees. For example, if the organizations business
goal is to grow aggressively in a highly competitive
market, performance models should emphasize
cultivating business development skills that the
company doesnt yet have. The performance
model will also identify resources that must be
acquired or developed to reach those performance expectationsthis allocation of resources is
Performance Planning
The traditional system begins with a planning
process intended to reveal and clarify performance expectations of both the employee and the
employer. Most organizations have a very structured planning process, with written goals for each
employee.
When done well, the goals laid out in the performance plan are specific and comprehensive
enough for employees to truly understand the
organizations needs. Often, performance plan-
Figure B
AN IMPROVED PERFORMANCE MANAGEMENT SYSTEM

Strategic Business
Goals
Business
Plans
Performance Model
Performance
Planning
Identifying areas
for improvement
Ongoing coaching
and feedback
Appraisal of
Accomplishments
28
ning is not done well, however. Overall, this

process can do well at clarifying expectations of
both employees and the employer. However, two
glaring problems complicate most performance
planning processes:
1. If a performance model doesnt exist, individual employee goals may not be linked to the
performance needs of the organization. The
goals set during performance planning should
extend from the organizations performance
needs as outlined in the performance model.
2. These goals are often simply handed to employees with little discussion of how achieving them
will fulfill the organizations needs. Therefore,
employee buy-in to accomplish these goals may
be low, leading to limited enthusiasm to do the
work.
used to benefit both the company and the employee, such as:
to recognize employee accomplishments
to make compensation decisions
to determine development needs
But consider the sensitivity surrounding evaluation. While it is important for employees to understand their level of performance, it is human
nature for people to feel that they are doing a
good jobperhaps even a great job. It can be very
wounding for the ego should the performance
evaluation find differently. Feeling ones efforts
are unappreciatedcompounded by the companys failure to provide help for improvement
through coaching and developmentdemotivates
employees and can perpetuate subpar performance.
Ongoing Coaching and Feedback

Once goals have been established, the typical performance management system requires the manager to hold performance reviews with the employee periodically and to provide ongoing coaching
and feedback. This frequent communication also
supplies opportunities to revisit the goals and consider any changes that should be made to reflect
changed circumstances.
Surprisingly, coaching and feedback arent often
regarded as very important. Few managers currently provide regular coaching and feedback, and
some simply dont do it at all. And, even many
human resource professionals dont consider
coaching to be an important objective of a performance management system.
Appraisal of Accomplishments
Toward the end of the cycle, the employees performance is evaluated. This information can be
Identifying Areas for Improvement

Typically, performance evaluation information is
shared with the employee to improve his or her
performance, usually through the use of a development plan. Like performance planning, development planning is often dictated by the manager, whose suggestions for improvement are expected to be acted upon whether the employee
believes in it or not. Yet without the employees
agreement that improvement in a specific area is
necessary, it is very unlikely that any real improvement will happen. Whats more, if these areas of
improvement are not linked closely to organizational goals, the employee will see even less reason
to work to improve.
Overall, there are two main weaknesses of the traditional performance management system. First,
employees are often not clear how their performance goals link to the companies needs and
29
expectations whether because no performance

model was created or because the link was not
explained to the employee. And secondly, not
enough value or effort is given to supporting the
employees ability to perform at their best.
and growing so they perform well in their current

and future roles. In return, the company offers its
employees the opportunity for continuous learning and the chance to grow into new, more interesting and rewarding roles.
A Better WayPDIs Talent Pipeline
Select
While most traditional performance management

systems dont even start to engage employees until
after theyve been on the job for months, PDI
believes that optimizing employee performance
begins even before the person is hired.
Screening and pre-employment testing processes

can help determine if the candidate has the skills
and personality traits that match the companys
expectations. Then, for much the same reason,
those expectations should be discussed with the
candidate during the interview process. The interview is an opportunity for candidates to share what
motivates them and what they expect from their
career and their employer. This communication is
critical for finding the right person someone
who possesses the required competencies, has the
ability to adapt to changes in expectations as future
requirements become necessary, and who is a likely
fit with the organizations culture and values.
Managers, co-workers and the general work environment all affect employee performance. The
Talent Pipeline outlines five specific junctures that
have a critical impact on how well employees perform.
Attract
As soon as the performance model identifies a
need to fill or create a position, the company must
identify its current and future expectations for
that position. This will help the company define a
compelling value proposition for candidates and
market that message to the right audience.
The company needs to communicate that it
expects its employees to be constantly learning
The employee must clearly understand the expectations of the job or at least have a realistic preview in order to decide whether he or she is a
right fit for the company and the position. Aligning the companys needs with those of the potential employee is critical to maximizing the performance of each new employee.
Figure C
PDIS TALENT PIPELINE

Business
Strategy
Human
Resource
Strategy
Performance Model
Attract Select Mobilize Develop Retain
30
Mobilize
Once an employee is hired, he or she needs to be
mobilized to do the job and meet or surpass
expectations. This means the company and the
manager need to communicate clear and accurate
expectations. The employer must orient the
employee to the organization and his or her new
role, and provide the training needed for the
employee to perform the job.
The culture of the organization and context of the
work will greatly affect how successful the employee will be. Along with day-to-day information about
how to use the fax machine and where to pick up a
paycheck, companies must help the new employee
begin to understand the unwritten rules of working
within the organizations culture those things
that cant be understood until they are experienced. The company must take care to integrate
new employees into company activities, group
meetings and social events to help them understand the organizations culture and heritage, what
it stands for and how it operates. Lessons learned
and mindsets locked in during this acclimation
process can last the entire tenure of a persons
employment, affecting the performance and success of both the employee and the organization.
Mobilizing requires ongoing evaluation, feedback
and adjustments, and is frequently the driver
behind traditional performance management systems. However, key characteristics of successful
mobilization are: 1) the regular clarification of
performance expectations, and 2) the ongoing
feedback and coaching provided to help the
employee perform at his or her best immediately
and consistently.
This is not a one-sided process. The manager and
the employee must work together to ensure buy-in
and even enthusiasm for meeting expectations,

being open to feedback, and regularly exchanging
ideas about how everyone involved can achieve
their best and the companys best. PDI developed
the GAPS Model (Fig. D) to highlight the critical
information needed during the mobilization
process.
Goals and values: The only way to ensure people
will perform their best is to understand what motivates them. Managers should not assume they
know what matters to employees they must ask
them. Regular conversations about what gets
them charged up, what they like to do, and what
they care about will help the manager understand
what drives their behavior. The more that is
known about an employees personal interests, values, desires, work objectives and career aspirations, the better prepared the manager is to talk
about their performance.
Abilities: Managers must explore the employees
view of his or her own capabilities, style and performance especially in relation to important
goals, values and success factors. This provides
great information about how employees see themselves compared to how others see them.
Perceptions: Managers should share with employees how others perceive their capabilities, style,
performance, motives, priorities and values. Others perceptions arent necessarily true, but they
do represent a slice of reality. It is the managers
role to help the employee understand the reality
created by identified perceptions and to help
them decide whether they can be successful in
that setting. This can be the basis of change, once
an employee understands how his or her own
goals may not be met successfully without his or
her attention.
31
Figure D
GAPS
Where the
person is
Where the
person is going
The
Persons
View
ABILITIES
GOALS & VALUES
How they see

themselves
What matters to
the person
Others
Views
PERCEPTIONS
SUCCESS FACTORS
How others see

the person
What matters
to others
Copyright 2000 Personnel Decisions International Corporation. All rights reserved.
Success factors: Managers must clarify what matters to other people in the organization, including
the manager as well as others important to the
employees success, such as senior management,
peers and direct reports.
Once the dialogue between the manager and
employee has strengthened to a point where information is available to both in all cells of the
GAPS model, related and important conversations
can take place.
Is there a gap between what the organization
expects of the employee (success factors) and
what the employee wants to do (goals and values)?
If so, is it possible for both to be accomplished?
If not, is this job or even organization the best
place for this employee to be successful?
32
Is there a disconnect between what the employee thinks he or she is good at (abilities) and what
others perceive (perceptions)?
What impact is that having on the employees
ability to accomplish his/her own goals?
Throughout the mobilization process, these conversations deepen the commitment to high levels of
performance, as well as help the manager and the
employee understand the constraints to achieving it.
Develop
Because evaluation and feedback are part of mobilizing an employee, it is important to follow up
with opportunities for the employee to develop in
the areas where he or she needs or wants to
improve. An employee who is encouraged and
enabled to develop his or her skills will be much
more satisfied and loyal to the employer. Also,
increasing an employees versatility, adaptability,

and effectiveness for future assignments and challenges will make him or her a more valuable and
valued employee.
The organizations culture is critical to development. The Successful Executives Handbook (PDI,
Oct. 1999) lists ten characteristics of an environment that supports employee development:
Open discussions with people about performance and development needs are common.
People feel like they get honest feedback.
People feel responsible to focus and meet their
objectives.
Leaders encourage others to take appropriate
risks to pursue learning.
People are willing to try new things.
New ideas and fresh perspectives are welcomed.
People can challenge the status quo.
The culture encourages people to do new things.
People are held accountable for meeting objectives and delivering on commitments.
People trust their leaders to walk their talk.
Enhancing the organizations culture to support
development has a tremendous impact on enhancing performance of individual employees. When
employees can expect honest, candid feedback on
all aspects of their performance, they will work
harder to avoid unpleasant feedback and generate
positive feedback. If employees are encouraged to
be curious and challenge the barriers that stifle
their performance, they are more likely to
improve their ability to overcome those barriers.

Finally, if employees are held accountable for
enhancing their performance, the organization
will see the support of development throughout
the culture.
Retain
Employee turnover costs companies both hard
and soft dollars. It is expensive to interview, hire
and train someone. Plus, an employees departure
can cause poor customer service, reduced morale
and employee uncertainty. The time and energy it
takes to hire a new employee pays off only if the
employee was right for the job in the first place
and stays with the company.
Many elements affect retention, including the
level of compensation and benefits, work environment comfort, relationship with co-workers and
boss, feelings of being appreciated, and personal
factors that are completely uncontrollable by the
company. However, the connection between
enhancing performance and retention is strong
when people are actively and passionately pursuing being their best, they are less likely to leave.
By the time the employee is being provided with
development, it should be clear which employees
are not a good fit with the position or the organization. Releasing with dignity those who dont fit
and helping them find other opportunities is not a
punishment. In fact, it is just one more step necessary to help them achieve their best performance
and be personally successful.
33
Enhancing Performance
Employees perform at their best when their
employers strategic goals, human capital decisions and individual employee goals are aligned
and when employees are given the support they
need to achieve those goals.
Sticking with a performance management system
that regularly reminds employees of their inability
to satisfy some organizational need can reduce
performance and may even cause the loss of a
potentially good employee. In todays tight labor
market, that lost employee represents lost dollars
and lost opportunity.
34
Human resource professionals and their companies should ask some hard questions about what
they are accomplishing with their performance
management systems. What will it take to improve
the system for the betterment of employees and,
in turn, the company? Do not assume the answer
to these questions will be too hard to implement
or too expensive. It costs too much not to provide
the support that will drive employees, and their
employers, to the best performance possible.
An SHRM White Paper
PERFORMANCE APPRAISAL AS AN
EMPLOYEE DEVELOPMENT TOOL
by Howard M. Pardue, Ph.D., SPHR
ne of the critical human resource issues of

the 21st century is an organizations ability
to refine and develop mechanisms to provide meaningful job performance feedback to all
employees. A positive and coherent understanding
between the employee and supervisor as to what is
acceptable job performance is essential for all
employee and management work relationships to
survive.
Optimum development and proper utilization of
each employee is essential to the success of any
organization. How am I doing? is often one of
the most urgent questions on an employees mind
today. Providing factual, candid and objective
answers to this question is an effective means of
enhancing employee development and sustaining
a sound employee relations program.
The enhancement of understanding can be
accomplished in two basic ways:
Job Descriptions
All employees must understand what is expected
of them in the performance of their jobs. Behavioral research data clearly indicates that many
organizations throughout a global economy today
continue to persist in assuming the employee
knows what is expected without ever discussing
the expectations of the job to be performed.
Performance Appraisal
Employee opinion survey data indicates the need
for employees to be given continuous performance feedback in a constructive, coaching, mentor relationship. Management creates a high percentage of its problems by totally ignoring the
need to inform the employee how he/she is
doing, thus creating a high level of uncertainty,
anxiety, low productivity and in many cases the
loss of a loyal and productive employee.
Appraisal has been defined as the act of the judging quality and value. Performance appraisal within the organizational context is the supervisors
judgment of how well an employee performs
his/her job based on established job measurement criteria. Note that it is job performance
which is being appraised and rated. A performance appraisal that focuses primarily on employee personality traits does little to enhance productivity or identify training, career developmental
needs, potential promotability, and contributions
an employee is making toward meeting organizational objectives.
Why Have A Performance Appraisal Program?

Volumes have been written on the subject of
employee performance appraisal. The arguments
for and against formal appraisal systems continue.
The increased demand for accountability by government agencies and related legislation, which
we will address later, including legal challenges of
human resource decisions, have made performance appraisal systems almost a necessity rather
than a luxury for all organizations.
The human resource professional must direct a
performance appraisal system for many reasons,
not the least of which is a well documented
method that can be accepted as a valid defense in
litigation proceedings. The Equal Employment
Opportunity Commissions Uniform Selection
Guidelines have literally forced performance
appraisal systems into being.
There are many other valid reasons to conduct
employee performance appraisals and many
potential uses for the information generated.
Decisions related to promotability, advancement,
selection for training, salary administration, discipline and even potential termination may flow
35
from the results of an objective performance

appraisal process.
What Elements Make A Good Performance

Appraisal System?
Ideally the ingredients of an effective state-of-theart performance appraisal program should be
designed to ensure:
1. That all employees are periodically interviewed
regarding their career progress to assist them in
developing to the fullest.
2. That a systematic measure of an employees
overall value to the organization is recorded.
3. That essential information concerning the
strengths and weaknesses of all employees in relation to career development including potential
for advancement and suitability for other positions and training is recorded.
The major underlying principles of a truly participative, performance oriented appraisal program
are as follows:
1. The appraisal of a subordinates job performance is a part of the normal day-to-day responsibility of every supervisor and relates directly to
his/her responsibility for planning and assignment of work.
2. Criteria for job performance must be related
to the job itself. Sufficient flexibility should be
maintained so that achievement measures can be
set to reflect accurately and realistically the
unique requirements of different positions, levels
of assignment and operating conditions.
3. Improvement in job performance can be
accomplished most effectively if the employee
participates directly in establishing the achievement measures for his/her job. To do a better
job, the employee should know what is expected,
how he/she is doing on the job and where assistance can be obtained when needed.
36
4. Employees are inclined to accept suggestions

for improving and/or maintaining their performance when they are provided feedback on a
continuing basis.
5. The supervisors prime responsibility is to
coach and collaborate in an individuals development. Two major forces in an employees development must be given full consideration to
achieve maximum results:
a. The employee must recognize and understand the responsibility of his/her immediate
supervisor as that of an active partner and coach
in providing career and job related assistance.
b. The supervisor must recognize and be concerned with the employees personal aspirations,
motivation and career growth needs.
6. An effective performance evaluation system
requires supervisors to communicate job standards and other expectations to employees
before the evaluation period begins. By doing so,
employees know what constitutes good performance and the supervisor can then more objectively assess performance.
7. Effective compensation systems must link performance achievements to salary increase considerations. Even the best compensation plan is difficult to administer if performance is not the major
determining factor in granting salary increases.
8. Frequent feedback sessions must be conducted
with employees throughout the evaluation period. Periodic mini-session reviews, held perhaps
monthly helps minimize the employee from
being surprised at appraisal time, and helps
maintain focus.
9. Career pathing and counseling must be a part
of the performance review cycle. By focusing on
performance accomplishments, more precise
guidance can be given to employees about career
options with the company, and the achievement
of agreed upon milestones.
Performance Appraisal Legal Issues

Earlier mention was made of the need to design
appraisal programs that will meet legal guidelines.
Defending performance appraisals has attracted
increased attention in the last few years, especially
since most organizations are now aware that
human resource decisions based on performance
appraisals can affect employment conditions for
protected employee groups.
The seriousness of this problem is underscored by
the fact that several million employees have their
job performance appraisal annually for purposes
of salary review, promotion consideration, human
resource development progress, and potential corrective action items.
Although several articles which have appeared in
human resources literature since the mid-70s
have been useful in highlighting specific legal
issues involving performance appraisal, few have
articulated the relative importance of the various
factors that explain how organizations can effectively develop and successfully defend their performance system before the Equal Employment
Opportunity Commission or in the courts.
All organizations must understand how vulnerable
their performance appraisal programs are to litigation and whether they are likely to be successful in
defending their programs in the event of an official
complaint. In the event the employer fails to show
that its performance appraisal program was
designed and administered on the basis of the Uniform Selection Guidelines established under the
authority of Title VII of the Civil Rights Act of 1964
as amended, the court may render the employer
liable for back pay, court costs, specific management
training programs for and/or promotion of protected group employees as part of the case settlement.
An analysis of recent court decisions reveal that

circumstances involved in a successfully defended
performance appraisal programs are described as
follows:
1. Supervisors were given specific written instructions and training on how to complete the
appraisals.
2. Job content was used in developing the basis of
the appraisal instrument.
3. Appraisals were behavior oriented rather than
personality trait oriented.
4. The results of the completed appraisal were
reviewed with the employee appraised and the
employee was given the opportunity to comment
and submit written comments if appropriate.
In addition, privacy legislation has been introduced or enacted in numerous states since the
early 90s. In 1996 the Privacy Protection Study
Committee released a report titled Personal Privacy in an Information Society. Among the 34
recommendations made by the Commission was
the suggestion that an effective privacy protection
policy must provide employees access to records
relating to their qualifications for promotion, pay
raises or to records relating to discipline and
potential termination.
Beyond the direct and potential legal implications
relating to employee access to their records, there
are other strong reasons for allowing such access.
First is the issue of employee confidence in the
performance appraisal systems reasonableness
and fairness. If the results of performance
appraisals are withheld, uncertainty and suspicion
will surely result. Second, if appraisals are to influence performance in a positive way, results must
be communicated. Third, access to results provides an opportunity for an individual to challenge judgments or to correct simple mistakes
37
which are inevitable in any system. Finally, access

to such information is essential if the due process
rights of employees are to be assured.
In the final analysis, the integrity, the effectiveness and the legal defensibility of a performance
appraisal system will depend on its legitimacy as a
tool for making employment decisions.
Employers should attempt to reduce the possibility that an employee will be able to establish a
prima facie case of discrimination if for example
there is a disproportionately small percentage of
females and minorities in the top four EEO categories by establishing affirmative action goals. Second, the employer must be certain that the content of the performance appraisal system is based
on job content and that performance measures
are job related, and are not based on general
traits that lend themselves to opinion, subjective
judgment and rater bias. Third, in administering
the program detailed and clearly written instructions must be given to each manager. Finally, the
manager must be required to discuss the rating
results with each employee to ensure appraisal
sessions are productive and contribute to employee effectiveness. Each manager must be trained in
how to rate employee performance and how to
provide feedback in a positive fashion.
Conclusion
The 21st century promises a more demanding and
visible role for all human resource professionals.
This role requires developing a futuristic strategic
plan which articulates human resource programs
which address a myriad of issues. Creating and
maintaining viable performance appraisal programs is essential to organization growth. Yet, even
more significant initiatives will be developing a
visionary human resources agenda that is integrat-
38
ed into the organizations mission and to correlate

specific programs such as compensation issues,
performance appraisal and job evaluation processes conceptually and operationally.
In the 21st century continued changes will occur
in terms of who works in organizations, why they
work and what they do. A major part of the human
resource professionals responsibility will be to
coach operating managers and supervisors to realize that the manner in which they manage key HR
decisions such as promotion and termination is of
interest to several parties, to include one or more
federal regulatory agencies. Senior executives
must be prepared and encouraged to implement
strategies for managing employees in ways that are
fair and ethical and will meet government and
public scrutiny standards. Clearly, supervisory
management development must move from a one
time orientation session to regular developmental
programs to update, enlighten and expand basic
management leadership skills. Designing effective
performance appraisal programs to meet the
needs of the organization and its employees
requires substantial effort, dedication and commitment from the CEO down through all levels of the
organization.
Thanks to Howard Pardue, PhD., SPHR, for contributing this article. Many of the suggestions and philosophical views in this article were inspired by cumulative
experiences as a practitioner and consultant in coordinating the implementation of organization-wide
appraisal programs in a variety of industry segments
and cultures. This paper is intended as general information, and is not a substitute for legal or other professional advice.
For more information on this subject, send an e-mail to
the SHRM Information Center at infocen@shrm.org
An SHRM White Paper
Change Performance Evaluations to Process Evaluations

By Richard J. Lukesh
n the 21st century, we cannot continue to emotionally abuse our most valued assets (employees) with the annual bloodletting called
Performance Evaluation. In todays business environment where competitive advantages are determined by price, speed and quality, we need an
evaluation process that promotes the corporate
goal of Continuous Improvement on an individual
level. We need to replace Performance Evaluations with Process Evaluations!
Step #1 - The Process-Oriented Job Description
Lets start with the basics - the Job Description. In
reviewing the garden-variety job description, aside
from the standard sections for ADA compliance,
reporting lines, KSA requirements, etc., there is a
section that describes the job with the heading
Activities, Responsibilities, Duties, or Tasks. This

section is supposed to be representative of the job
to be performed. However, it typically only provides a cursory list of activities such as:
Prepares a variety of reports
Handles customer complaints
Provides accurate and timely information
Establishes and maintains close liaison with
clients.
This section of the job description should identify
the core activities of the job along with the most
significant process steps for an activity and the
quantitative standards for each process step. For
example, the above activity, Prepares a variety of
reports, can be broken down into the specific
reports to be completed with process steps and
outcomes for each report as follows:
PROCESS-ORIENTED JOB DESCRIPTION
TASKS/DUTIES
PROCESS ACTIVITIES & INPUTS
STANDARDS & OUTPUTS
Completes
monthly Sales
Report.
Collects Sales Rep Monthly Territory

Worksheets via fax or e-mail.
By 5:00PM on the last workday of

each month.
Calls Sales Reps about missing Worksheets & information missing from the
Worksheets.
By 11:00AM on the 1st working day

of the new month.
Inputs Worksheet data on Excel

spreadsheets.
Prints & proofs Sales Report.
Zero misspelled words & financial data

must balance with Region Summaries.
Delivers completed Sales Report to VP

of Sales.
Between 9:00AM & 11:00AM on the

2nd working day of the new month.
39
An entire job description written in a process-oriented format accomplishes the following:

A manager can identify the major process steps
and outcomes for which an employee will be held
accountable.
An employee will have a clear understanding of
the expectations of each activity.
A manager can monitor changes in the number
of core activities along with the time commitment and costs of process activities as those activities increase or decrease with business volume.
The employee and manager can jointly and
objectively review process steps and outcomes
that affect departmental performance.
By developing a Process-Oriented Job Description with an employee, the manager has laid the
foundation for Continuous Improvement on an
individual level.
Step #2 - The Process Evaluation
In todays customer competitive environment,
companies are installing Customer Relationship
Management (CRM) systems as a way to individualize product and service offerings to the specific
needs of each customer. Can we in management
afford to do any less with our employees?
The days of the one evaluation form fits all are
long gone. If we are going to reduce accelerated
depreciation (turnover) of our people assets, we
need to respond to the day-to-day issues of the
job (the processes) that affect the quality of work
life for each employee. A Process Evaluation represents a major tool for improving quality of work
life. However, the format of a Process Evaluation
becomes critical to its success.
If a Process-Oriented Job Description is properly
developed, then 99% of the Process Evaluation
40
form is complete. To finalize the Process Evaluation, a manager simply adds three columns next
to the Standards & Outputs column with the
headings:
Falls Below Standard
Meets Standard
Exceeds Standard.
These three choices to the outcome of a given
process step parallel the concepts used in process
control charts to determine whether a process is
in control. In Statistical Process Control (SPC)
terms, a process is described as doing its best
and in control (Meets Standard) when the
process outcomes behave with random variability
within the Lower Specification Limit (LSL) and
the Upper Specification Limit (USL) of the
process. Employee performance (process outcomes) can be thought of in the same terms and
even plotted on control charts to determine if the
outcomes are stable and predictable, or whether
the outcomes represent excessive variation thus
signaling the presence of special causes.
In essence when a Process-Oriented Job Description is developed correctly, the manager simultaneously creates a position specific Process Evaluation form. At the time of the Process Evaluation
(NOT Performance Evaluation), the employee
and manager discuss the processes and outcomes
of the position and jointly review strategies to
improve quality, reduce cycle time and lower
process costs. This process review simply analyzes
the three dimensions of competitiveness (quality,
speed, price/costs) on a micro level that the
organization should be analyzing on a macro
level. Additionally, the Process Evaluation
updates the job description yearly.
For an executive who is assigned strategic goals

such as Improve market share by 10%, the
process-oriented format works equally well. A
process-oriented goal would require an executive
to identify the process steps and benchmark standards for each step. A goal, such as improving
market share, may have 25 significant steps, many
of which are highly interdependent on other
areas such as suppliers, manufacturing, market
research, advertising, recruiting and training of
new sales reps, etc. These steps must be precisely
orchestrated to achieve the desired output; otherwise, the year-end evaluation results in executive finger pointing and excuses. It is the orchestration of these steps, as well the outcome of each
step, that an executive should be measured
against, not just the end result.
The Process Evaluation creates a collaborative
employee/manager environment where the
Process-Oriented Job Description becomes the
driving element of a companys Continuous
Improvement effort and the job description
becomes a work-in-process rather than a once
and done event.
Step #3 - The Behavior Assessment
Question: Can an employee meet the standard
on every process output and be fired for poor performance? Answer: No! However, the employee
can meet the standard on every process output
and be terminated for unacceptable behaviors.
There seems to be an unwritten rule in business
that suggests we hire people for their hard skills
such as degrees, achievements and experience,
but we terminate them for lack of soft skills such
as ability to work in a team, misplaced emotion,
inability to change, inconsiderate treatment of
subordinates or customers, etc.
The truth is that employers have a right to expect

employees to exhibit certain positive behaviors or
at the very least not exhibit certain negative
behaviors. On the other hand, employees have
the right to know what behaviors the employer
will reward and punish.
If a manager has an employee who meets the standard on all process outputs, but is a disruptive
force within the organization, the manager has an
obligation to confront the employee with the
errant behavior and develop a plan to minimize or
eliminate the behavior. If the behavior does not
change, the employee may be terminated.
Simply stated, an employee must meet the behavior expectations of his/her manager. Despite the
fact that two separate managers may have different behavior expectations for the same department, employees must satisfy the behavior expectations of the person in charge. For example, an
individual who manages a Collection Agency may
demand that employees present themselves to
delinquent accounts in a very demanding and
confrontational manner. Another person managing the same Agency may require Collectors to
use a soft-sell consultative approach. In either
situation, employees who may have been rising
stars under one manager are now examples of
unacceptable behavior to the other manager.
This example illustrates the need for a manager
to develop a representative list of behaviors that
he/she considers exemplary of successful/top
performers and those behaviors considered typical of unsuccessful/low performers. By creating
this list of behaviors, the manager can objectify
many of his/her subjective behavior expectations. This behavior list can then be distributed
to employees, reviewed with the employees and
41
should be part of an employee-manager discussion disassociated from a Process Evaluation. It is

imperative that the Manager reviews this behavior list with Human Resources to avoid any discrimination problems as a result of identifying
behaviors that represent ethnic/cultural differences.
The behavior list forms the basis of a Behavior
Assessment in which the manager engages an
employee in a discussion about the managers
observation of positive and negative interpersonal skills exhibited by the employee. Clearly, this
exercise is very subjective compared to the objective Process Evaluation. However, the manager is
paid to maintain a productive and cohesive team.
With every team there are rules of behavior
designed to maximize the output of the team or
at the very least minimize disruption to the team.
When an employee does not play by the managers rules, despite how subjective the rules may
be (Caveat: the rules must be legal), the manager, as the teams coach, is obligated to bench the
player, regardless of the exemplary individual
output of the person.
By separating Behavior Assessment from Process
Evaluation, a manager separates any errant
42
behaviors from outcomes of the job. If however,

the behavior is a factor that truly affects a process
outcome, then the specific behavior needs to be
addressed in the Process Evaluation as a special
cause that affects the variability of the process
and causes the process to be out of control.
For example if an employee were frequently late
for work but meets standard on all outcomes, it
would be inappropriate to commingle an
exchange about this behavior at the Process Evaluation, as this may tend to hinder the employees
full participation in the discussion of process
steps and outcomes. However, in the case of a
Collection Agency employee who falls below the
LSL of the Collection Ratio for the Agency
because of an abrasive phone presence, the
Process Evaluation would be an appropriate setting to review this behavior as a special cause of
variation in process output. In this latter situation, the employee and manager would brainstorm a list of special causes that could affect
the process outcome (Collection Ratio) to which
the manager would add his/her observations of
the employees abrasive telephone mannerisms.
An action plan would then be developed to minimize or eliminate all of the special causes
affecting process outcomes.
Conclusion
Many organizations have established Continuous
Improvement programs that affect the high visibility processes with the largest impact on the
bottom line. However, these same organizations
fail to realize that the high visibility processes are
supported by a collection of low visibility inputprocess-output events.
As the objective and quantifiable techniques of
Continuous Improvement are applied to individual positions in a Process Evaluation, the nature
of the employee-employer relationship becomes
more collaborative and less confrontational.
When employees comprehend how their positions can be enriched by process improvement
methodologies, the extension of the Continuous
Improvement philosophy to major business
processes is not such a huge cultural or educational leap.

A Process Evaluation is a tool for dramatically
improving individual quality, productivity and
efficiency while eliminating historically one of
the most hated employment events - the Annual
Performance Evaluation.
Thanks to Richard J, Lukesh for contributing this article. It is intended as information only and is not a substitute for legal or professional advice. Richard J.
Lukesh is a Principal in the consulting firm of Regional Services, Inc. based in Exton, PA.
For more information on this subject, send an e-mail to
the SHRM Information Center at infocenn@shrm.org.
43

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SOCIETY FOR HUMAN RESOURCE MANAGEMENT

Performance Management Survey

SHRM / PDI Peformance Management Survey

About This Report

A Message from the SHRM Foundation

Overall Characteristics of Performance Management Systems

System Objectives: Employees Come First

Satisfied With Appraisals; Dissatisfied With Development

More Executive Support Required

Top Effectiveness Measures

System Components Are Integrated

Planning and Evaluation

Performance Planning and Evaluation: Executives Have the Edge

Development and Career Planning: A Need to Focus on the Future

Classroom Training Popular and Preferred

The Fully Developed Executive?

Lack of Training in Feedback and Coaching

Rewards: Performance Pay Common At All Levels

Technology Industries: Champion for Non-Exempt Employees

The Future: More 360-Degree Feedback

A Message from Personnel Decisions International

SHRM / PDI Peformance Management Survey

About This Report

he Society for Human Resource Management

A Report from the SHRM Survey Program

and to help HR leaders stay current with the latest

SHRM / PDI Peformance Management Survey

A Message from the

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A Report from the SHRM Survey Program

he 2000 Performance Management Survey

percent of participants reported that

gave top priority to performance

Planning and Evaluation

out of 10 respondents reported that their

Classroom training was the most popular method

was the only specific performance management area where companies

SHRM / PDI Peformance Management Survey

n todays tight labor market, the ability to

Figure 1: Objectives of Performance Management System

Provide information to employees about their performance

Clarify organizational expectations of employees

Identify developmental needs

Gather information for pay decisions

Gather information for coaching

Document performance for employee records

Gather information for promotion decisions

Source: SHRM /PDI 2000 Performance Management Survey

A Report from the SHRM Survey Program

Satisfied With Appraisals;

Figure 2: System Satisfaction

Source: SHRM /PDI 2000 Performance Management Survey

Percent Satisfied and

SHRM / PDI Peformance Management Survey

More Executive Support Required

ment system was undervalued in the company,

Top Effectiveness Measures

Figure 3: Future Challenges

Source: SHRM /PDI 2000 Performance Management Survey

A Report from the SHRM Survey Program

Figure 4: Review by Management