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Industrial and Organizational Psychology, 4 (2011), 188189. Copyright 2011 Society for Industrial and Organizational Psychology.

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Technology Is Transforming the Nature of Performance Management


STEVEN T. HUNT SuccessFactors, Inc.

As someone who has assisted with the design and implementation of hundreds of performance management systems, I read the article by Pulakos and OLeary (2011) with considerable interest. One major reaction I had is the degree to which the authors overlooked the massive impact cloud computing technology has on the effectiveness of performance management processes (Levensaler & Laurano, 2010). Discussing performance management without addressing how cloud computing technology is changing the process is akin to discussing the use of standardized selection assessments without mentioning online testing. In 1990, one could have made a strong argument that the operational impracticalities of paper-and-pencil testing vastly outweighed the benets of using psychometrically validated assessments for hiring. But the advent of Internet stafng methods has completely changed this discussion. The same thing has happened over the past 5 years in the world of performance management. Performance management is undergoing a signicant shift from xed paper-andpencil or highly static in-house enterprise technology platforms to more dynamic online systems. These online systems make once clumsy processes much more efcient, exible, and easy to use. This is perhaps
Correspondence concerning this article should be addressed to Steven T. Hunt. E-mail: shunt@successfactors.com Address: SuccessFactors, Inc., 16958 Richen Park Circle, Sherwood, OR 97140

most apparent in the area of goal cascading. The authors claim that creating the cascade itself is extremely challenging operationally and we do not recommend that cascaded goals be implemented in the vast majority of organizations. I might have agreed with these statements 5 years ago when goal cascading technology had not been fully developed. But goal cascading technology has completely changed the situation. We have seen companies successfully implement goal cascading across more than 10,000 employees around the globe in less than 2 months. Given what we know about the power goals have for increasing employee performance (Latham, 2004), the organizational benets associated with implementing this type of process can probably be considered self-evident. Similar examples exist regarding the impact technology is having on processes used for performance evaluation and employee feedback. Performance management technology has also enabled companies to implement several of Pulakos and OLearys recommendations. For example, companies are increasingly deploying technologyenabled performance management tools that provide simple job aids to managers to encourage them to engage in effective performance management behaviors on an ongoing basis. Three strategies mentioned by the authorsframe of reference training, storing high-quality goals in a searchable database, and evaluating employees on difculty and complexityare currently being

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deployed through the use of performance management technology. Another benet of performance management technology is that it allows companies to evaluate whether managers are carrying out basic management tasks, such as setting employee goals and providing employee feedback. These systems enable companies to measure if managers are performing what Pulakos and OLeary call the role of a manager. These measures are critical for rewarding effective managerial behavior, making managers accountable for effective behavior. As one client told me, until my company implemented [a technology-enabled performance management process], we were not able to measure whether managers were even talking to their employees about performance, regardless of whether they were doing it effectively. When appropriately designed, technology-enabled performance management processes allow companies to increase workforce productivity by creating methods that support, evaluate, and ultimately improve manager performance on fundamental tasks, such as setting

goals, evaluating performance, providing effective feedback, and rewarding and holding employees accountable for meeting performance expectation. I appreciate Pulakos and OLearys desire to call attention to issues that limit the value of performance management. But their article fails to consider the critical role that performance management technology is playing in addressing many of these issues. Innovations in performance management technology do not address all the problems that plague performance management methods, but they have had a major impact on many of the concerns raised by Pulakos and OLeary. References
Latham, G. P. (2004). The motivational benets of goal-setting. Academy of Management Executive, 18, 126129. Levensaler, L., & Laurano, M. (2010). Talent management systems 2010: Market realities, implementation experiences, and solution provider prole. Oakland, CA: Bersin. Pulakos, E. D., & OLeary, R. S. (2011). Why is performance management broken? Industrial and Organizational Psychology: Perspectives on Science and Practice, 4, 146164.