Performance management effectiveness: Lessons from world-leading firms

Michal Biron, Elaine Farndaljaap, Jaap Paauwe

Research output: Contribution to journalArticlepeer-review

Abstract

While interest in performance management has increased considerably in recent years, research has revealed inconsistent results about its effectiveness. Inconsistencies may be related to insufficient understanding of the factors likely to enhance the effectiveness of performance management systems. The current study seeks to address this issue by investigating performance management systems in 16 world-leading firms. We use signalling theory [e.g. Spence (1973), Quarterly Journal of Economics, 87, 355-374; Murray (1991), Journal of Marketing, 55, 10-25] to propose that to the extent that firms promote certain facilitating practices, employees infer that management is concerned with performance management issues, and this may have a trickle-down effect with regard to the effectiveness of the firm's performance management system. Our framework proposes four performance management system facilitators, which include v(1) taking a broad view of performance management that includes both strategic and tactical elements; (2) involving senior managers in the process; (3) clearly communicating performance expectations and (4) formally training performance raters.

Original languageAmerican English
Pages (from-to)1294-1311
Number of pages18
JournalInternational Journal of Human Resource Management
Volume22
Issue number6
DOIs
StatePublished - Apr 2011

Keywords

  • Communication
  • Performance management
  • Performance measurement
  • Senior management involvement
  • Training

All Science Journal Classification (ASJC) codes

  • Industrial relations
  • Management of Technology and Innovation
  • Business and International Management
  • Organizational Behavior and Human Resource Management
  • Strategy and Management

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