EMPLOYEE ENGAGEMENT

THROUGH EFFECTIVE
PERFORMANCE MANAGEMENT

This book is a practical guide for managers to increase and support employee
engagement through stronger performance management tools and techniques.
In this second edition, Edward Mone and Manuel London incorporate
new developments in the field, including discussion of issues about the value of
challenging goals, annual formal appraisals, forced ranking, and ways to give
constructive feedback. The authors expand the traditional notion of performance
management to include building trust, creating conditions of empowerment,
managing team learning, and maintaining ongoing straightforward com-
munications about performance, all of which are critical to employee engagement.
Case studies offer concrete examples, and checklists and surveys supply managers
with ways to assess employee engagement as well as directions for increasing
engagement. An up-to-date, straightforward guide, this book is appropriate for
graduate students in Industrial and Organizational Psychology, Human Resources,
and Management Studies, as well as scholars and practitioners in those fields.

Edward M. Mone has more than 30 years of corporate experience in career,

leadership, and organization change and development, and has been a lecturer in
the College of Business and School of Professional Development at the State
University of New York at Stony Brook, USA for more than 10 years.

Manuel London is Dean and Distinguished Professor of Management in the

College of Business at the State University of New York at Stony Brook, USA.
He holds a PhD in Industrial and Organizational Psychology from the Ohio State
University. He writes and conducts research on performance management, leader
development, and team learning.
EMPLOYEE
ENGAGEMENT
THROUGH EFFECTIVE
PERFORMANCE
MANAGEMENT
A Practical Guide for Managers

Second Edition

Edward M. Mone and Manuel London

Second edition published 2018
by Routledge
711 Third Avenue, New York, NY 10017
and by Routledge
2 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2018 Taylor & Francis
The right of Edward M. Mone and Manuel London to be identified as authors
of this work has been asserted by them in accordance with sections 77 and 78
of the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or
reproduced or utilized in any form or by any electronic, mechanical,
or other means, now known or hereafter invented, including photocopying
and recording, or in any information storage or retrieval system,
without permission in writing from the publishers.
Trademark notice: Product or corporate names may be trademarks
or registered trademarks, and are used only for identification
and explanation without intent to infringe.
First edition published by Routledge 2010
Library of Congress Cataloging-in-Publication Data
Names: Mone, Edward M., author. | London, Manuel, author.
Title: Employee engagement through effective performance management :
a practical guide for managers / Edward M. Mone and Manuel London.
Description: Second Edition. | New York : Routledge, 2018. | Revised edition
of the authors' Employee engagement through effective performance management,
c2010. | Includes bibliographical references and index.
Identifiers: LCCN 2017039767| ISBN 9781138648272 (hardback : alk. paper) |
ISBN 9781138648289 (pbk. : alk. paper) | ISBN 9781315626529 (ebook)
Subjects: LCSH: Achievement motivation. | Employee motivation. |
Career development.
Classification: LCC BF503.M66 2018 | DDC 658.3/14—dc23
LC record available at https://lccn.loc.gov/2017039767

ISBN: 978-1-138-64827-2 (hbk)

ISBN: 978-1-138-64828-9 (pbk)
ISBN: 978-1-315-62652-9 (ebk)

Typeset in Bembo and Stone Sans

by Florence Production Ltd, Stoodleigh, Devon, UK
To Ceil and Marilyn for their warm and
continuing support of our collaborative efforts,
which span almost 30 years.
CONTENTS

List of Figures xiii

List of Tables xiv
About the Authors xv
Preface xvii
Acknowledgments xxiv

1 The Performance Management Process and

Employee Engagement 1
An Introduction 1
The Performance Management Process 2
Managers’ Attitudes and Research about Performance Management 2
A Focus on Feedback 3
Overview of the Book 7
Appendix 1.1: Talent Management Suites and Performance
Management 10

2 Understanding Performance Appraisal 13

Performance Appraisals 15
Formal Performance Appraisals 16
Approaches to Performance Appraisal Rating Systems 17
Rating Behaviors and Competencies 20
Measurement 23
Avoiding Common Rating Errors 24
Preparing for the Appraisal Meeting 25
viii Contents

What You Would Typically Cover in the Meeting 26

Performance Appraisal and Compensation 27
Conclusion 29

3 Building a Climate of Trust 30

Trust: An Overview 30
Trust and Performance Management 31
Understanding the Drivers of Trust 32
Evaluating Your Current Climate, Addressing Areas of Need, and
Actively Managing the Climate of Trust 39
Conclusion 47
Appendix 3.1: Trust and Empowerment Climate Assessment Survey,
Manager Version 48
Appendix 3.2: Trust and Empowerment Climate Assessment Survey,
Employee Version 53
Appendix 3.3: Trust and Empowerment Climate Assessment Results
Summary—Sample Report 58

4 Setting Meaningful and Effective Goals 65

Goal Setting 65
Why Are Goals Important? 66
A Goal-Setting Framework 67
Where Do Goals Come From? 70
Putting the Elements Together 72
Why Challenging Goals Are Important 73
Types of Goals 74
Goal-Setting Process 77
Driving Motivation to Achieve Goals 79
The Goal-Setting and Performance Evaluation Conundrum 80
Conclusion 82
Appendix 4.1: Understanding Goal Alignment and Cascading 82

5 Meeting the Feedback Challenge 85

Assessing Yourself 86
Why Give Feedback? 87
What to Consider When Giving Feedback 87
Tips for Giving Effective Feedback 88
What Is Constructive and Destructive Feedback? 88
Your Employees’ Receptivity to Feedback 90
Being Good at Self-Monitoring 91
 Contents ix

Being High or Low in Self-Esteem 92

And What About You? 93
Giving Feedback: A Case Study 93
Giving Performance Feedback: A Sample Discussion 94
Feedback for Reinforcement 96
How to Handle the More Difficult Conversations 98
Conclusion 102
Appendix 5.1: Assessment for Measuring Self-Esteem 103

6 Recognizing Employee Performance 105

Obstacles to Giving Recognition 106
What Is Recognition? 107
What Do You Recognize? 108
How Do You Recognize Your Employees, and What Does It Cost? 109
How Do You Make Your Recognition Effective? 111
What Are Your Next Steps? 112
Recognition as a Reinforcer 113
Conclusion 113

7 Learning About 360-Degree Feedback 115

What Is 360-Degree Feedback? 116
The 360-Degree Feedback Process 117
How Is a 360-Degree Process Developed? 117
360-Degree Feedback Surveys Differ from Employee Opinion
Surveys 117
The Value of Feedback from Different Perspectives 118
Participating in Designing the Survey 118
Frequency of Administering the Survey 119
Why Is 360-Degree Feedback So Popular? 119
Should Survey Feedback Results Be Used to Make Administrative
Decisions About Managers? 120
What Is the Rationale for Using 360-Degree Feedback Results for
Making Administrative Decisions? 121
Typical Reactions When Introducing 360-Degree Feedback 122
The Need for Clear Communication 123
Questions Your Managers May Have about 360-Degree Feedback 123
Questions Employees May Have about 360-Degree Feedback 125
Ways Companies Administer the Survey 126
Just-in-Time, Do-It-Yourself 360-Degree Feedback 126
The Feedback Report 127
x Contents

Ways Companies Tend to Deliver the Report 127

Does 360-Degree Feedback Work? 129
Tracking Changes in Behavior Over Time 130
Sample Upward Feedback Survey and Report 131
Interpreting the Sample Report 140
Conclusion 141

8 Coaching for Success 142

Defining Coaching 143
The Manager as Coach 144
Areas for Coaching 145
5S Coaching 147
The Coaching Process 147
The Pros and Cons of Professional Coaching 149
Objectives of Professional Coaching 152
What Happens During Coaching? 154
Meetings with a Professional Coach 155
Getting the Coaching Relationship Off to a Good Start 156
How Do You Help Your Employee Get a Professional Coach? 156
Selecting the Right Coach 157
Effectiveness of Coaching 157
When Is Coaching Likely to Succeed? 159
Common Obstacles to Effective Coaching 160
Keep in Mind the Benefits of Coaching 161
Coaching Is Not Therapy 162
Measuring the Effects of Coaching 162
Conclusion 163

9 Managing Employee and Team Learning and

Development 164
Practical Advice for Helping Your Employees Engage in Self-
Development 165
Characteristics of a Continuous Learner 166
Career Motivation 167
The Expansive Personality 168
Are Your Employees Truly Expansive? 169
Job Crafting for Meaning and Development 172
Informal Learning 172
How to Create Opportunities for Informal Learning 173
Reflecting on Experience 175
 Contents xi

Managing Your Team’s Learning 177

Defining Team Learning 178
Facilitating Team Learning 179
Managing Learning in Multiteam Systems 181
Conclusion 182

10 Managing and Preventing Employee Burnout 183

What Is Burnout? 185
Work Environment Factors and Burnout 188
Identifying Burnout 190
Early Warning Signs of Burnout 191
Symptoms of Burnout 191
Taking Action to Reduce Burnout 192
Addressing Workload 193
Addressing Control 193
Addressing Recognition and Reward 194
Addressing Community 195
Addressing Fairness 196
Addressing Values 196
Preventing Burnout 197
Conclusion 198
Appendix 10.1: Symptoms of Burnout Checklist 199
Appendix 10.2: Strategies for Coping with and Preventing Burnout
Checklist 201
Appendix 10.3: Tactics for Addressing Personality-Centered Causes
of Stress 203
Appendix 10.4: Creating a More Engaging Work Environment 205

11 A Closing Look at Performance Management and

Employee Engagement 208
Case Study 210
Some Final Words 222

References 224
Author Index 233
Subject Index 235
FIGURES

3.1 Creating a Climate of Trust 33

7.1 Sample 360-Degree Feedback Survey 131
7.2 Sample 360-Degree Feedback Report 136
8.1 The 5S Coaching Process 149
TABLES

1.1 Path Model Direct and Indirect Predictors of Employee

Engagement Related to Performance Management 8
2.1 Effectiveness Evaluation 21
3.1 Impact of Reciprocity on Employee Performance 36
3.2 Responding at the Organization Level 41
3.3 Trust Action Plan 44
3.4 Empowerment Plan 45
4.1 Example 1 71
4.2 Example 2 71
4.3 Results Evaluation 75
4.4 Expectancy Theory and Employee Motivation 79
4.5 Strategies for Increasing Employee Motivation 80
5.1 Self-Monitoring Views 91
5.2 Strategies for Handling Difficult Reactions to Constructive
Feedback 99
8.1 Focus of Coaching 145
8.2 Coaching Don’ts 146
8.3 5S Coaching Steps and Suggested Actions 150
10.1 The Personal Causes of Burnout Checklist 186
10.2 The Personality-Centered Causes of Burnout Checklist 186
ABOUT THE AUTHORS

Edward M. Mone has more than 30 years of experience in career, leadership, and
organization change and development. He is currently a lecturer in the College of
Business and School of Professional Development at the State University of New
York at Stony Brook. He was vice president for organization development (OD)
at CA Technologies, where he was responsible for management and leadership
training and development, succession planning, mentoring, the company-wide
employee opinion survey and employee research, coaching, 360-degree feedback,
and performance management. He was previously vice president of OD at Cable-
vision Systems, Inc., and director of people processes and systems at Booz-Allen
& Hamilton, Inc. He was human resources division manager for strategic planning
and development at AT&T, where he also held a variety of human resource and
OD positions. Before that, he was a partner in an outplacement and career manage-
ment firm. He holds an MA in counseling psychology, and has completed doctoral
coursework in organizational psychology, as well as individual, team, and organ-
ization learning at Teachers College, Columbia University. He has coauthored and
coedited books, book chapters, and articles in the areas of human resources and
OD, including Leadership for Today and the Future (Bridgepoint Education, Inc.,
2016), with Manuel London.

Manuel London is Distinguished Professor at the State University of New York

at Stony Brook. He received his AB from Case Western Reserve University
and his MA and PhD from the Ohio State University in industrial and organiza-
tional psychology. He taught at the University of Illinois in Champaign-Urbana
before joining AT&T. There he conducted research and designed programs for
management assessment, performance evaluation, and leadership development.
London has been on the Stony Brook faculty since 1989 where he has served
xvi About the Authors

as Deputy to the President, Associate Provost for Enrollment & Retention

Management, Director of the Undergraduate College of Leadership & Service,
Associate Dean of the College of Business, and, for the last 8 years, Dean. He is
the author of 18 books, the editor of 10, and the author of more than 130 articles
in the areas of performance evaluation, job feedback, career motivation, leadership
development, and group learning. His books and articles have won awards from
the Association for Human Resource Development and the Society for Human
Resource Management.
PREFACE

You might ask the following questions:

• What is employee engagement?

• Why does employee engagement matter?
• And if it does matter, what can I do to drive employee engagement?

Whether you are a manager or a practitioner in the field of human resources,

these are valid questions that we posed in our first edition, and they are just as
valid today. Chances are you have heard something about employee engagement
at a conference, at a seminar, or through consultant-sponsored web casts, or read
something about it in the popular press, a management “how-to” book, as the
goal or naming of various initiatives in your organization, or the more profes-
sional or academic literature. Chances are, as well, that you find the concept of
employee engagement somewhat hard to define if not confusing. In fact, that is
a major reason for writing this book and this revision. We were somewhat
dismayed by our search for practical definitions of employee engagement and
clear strategies and tactics that managers can use to create an engaged workforce.
In fact, our current review of selected and more recent works on employee
engagement reveals the fact that there is still no widespread agreement on what
engagement actually means, and whether or not it is an entirely unique concept
or, perhaps, just the opposite end of the engagement-burnout continuum as pro-
posed by Maslach and Leiter (1997) or engagement—disengagement as originally
conceived by Kahn (1990). In addition, some have called engagement a problem-
atic construct, and note that variations on the term—job engagement, work
engagement, employee engagement, etc.—are abundant (Truss, Delbridge, Alfes,
Shantz, & Soane, 2014).
xviii Preface

So, based on our proprietary research and experience and further review of
the literature, we provide our definition of employee engagement and present the
idea that an expanded view of performance management and its related processes,
tools, and techniques are the keys to driving employee engagement. Although this
book will be of value to managers, students, and a wide range of practitioners,
we have written it in a “how-to” style for managers, and the remainder of the
book will take that perspective and voice; we will show what managers can do
to achieve the objective of fostering high levels of employee engagement in their
organizations. Consultants and human resource practitioners can use this book as
a practical and reliable resource for helping leaders and managers create an
engaged workforce, whereas those instructing students in business, management,
and human resource courses at the undergraduate or graduate levels can use the
book as a primary or complementary text to help their students understand the
main components of excellent performance management and ways to achieve an
engaged workforce. Because this book is to be a practical guide, in the first edition,
we purposely limited our literature references to those that make sense for this
style of book to give evidence, without being exhaustive, that our recommen-
dations and the best practices we have developed and used with client organizations
over time are grounded in solid theory and research. For this second edition, in
a similar vein, we built upon our earlier work and reviewed selected journals,
periodicals, and books since this book was first published in 2010. This was a
targeted review, looking for new insights regarding employee engagement and
performance management, and practical strategies and tactics for executing the
various phases of performance management.
So, let us begin with our definition of employee engagement: An engaged
employee is someone who feels involved, committed, passionate, and empowered
and demonstrates those feelings in work behavior. Employee engagement has been
considered a trait (something that is characteristic of an employee’s personality),
a state (a condition that an employee may be in for some period of time), and a
behavior that an employee demonstrates, for example, challenging the status quo,
being innovative, or just being a good organization citizen (Macey & Schneider,
2008). Although we believe that some employees are more predisposed to be
engaged than not, we do recognize, however, that engagement tends to be a
state and not a personality trait, and that even the best of employees are not 100
percent engaged all the time.
As a test of our ideas about employee engagement, we used our definition as
the basis for creating a set of questions that we incorporated into an employee
opinion survey conducted in 2008 at XINC (a pseudonym), a large, global
company (we describe this study in more detail in Chapter 1). The result of this
effort was the identification of a highly reliable set of 18 questions that, taken
together, created an employee engagement index—another way of saying a
measure of employee engagement. With an index in place, we were able to
determine specific drivers of employee engagement, which then allowed us to
 Preface xix

identify the management actions necessary to create an engaged workforce.

Although this study was limited to one organization, the results validated much
of the research in the field at the time—and is still largely supported by subsequent
research (Crawford, LePine, & Rich, 2010; Oracle, 2016)—and strengthened the
credence of the recommendations we make throughout this book.
In general, our advice and direction for what managers can do to create
a more engaged workforce are really about better performance management.
In this book, we expand upon the boundaries of the traditional notions of perfor-
mance management to include building trust, creating conditions of empower-
ment, fostering team development, and maintaining ongoing, straightforward
communications about performance, all of which we have found to be essential
to employee engagement.
In some respects, employee engagement is similar to employee satisfaction,
and probably has some measurement overlap. For example, Dalal, Baysinger,
Brummel, and LeBreton (2012) report a correlation between job satisfaction and
engagement of 0.62. But there is a difference, and they are distinct constructs
(Christian, Garza, & Slaughter, 2011). Satisfaction describes a condition or state
of satiation. When employees are satisfied, they feel good or happy. When
employees are engaged, they also take action in support of the organization.
Although employee satisfaction remains highly important and has been linked to
customer satisfaction, employee engagement goes further. Engagement “is strongly
correlated to a number of individual, group and corporate performance outcomes
including recruiting, retention, turnover, individual productivity, customer
service, customer loyalty, growth in operating margins, increased profit margins,
and even revenue growth rates” (Gibbons, 2006, p. 10).
What can you do as a manager to drive employee engagement? As suggested
by our own research, as well as the work of others (see for instance, Christian
et al., 2011; Gibbons, 2006; Macey & Schneider, 2008; Oracle, 2016), you can
take the following actions to build an organization of engaged employees:

• Establish a foundation of trust and empowerment with your employees.

• Ensure your employees have challenging and meaningful work and that you
clarify its importance to your organization.
• Establish clear performance goals for your employees that are challenging
and aligned with overall workgroup and organization goals.
• Establish clear development goals for your employees and help them to
understand the career growth opportunities available to them.
• Regularly communicate with your employees about their goals and the
organization’s goals and the importance of their work to help ensure their
work is aligned with corporate objectives and to help them recognize that
their efforts are meaningful and valuable.
• Provide ongoing coaching and feedback to your employees to ensure
performance and development are on track and support work–life balance.
xx Preface

• Recognize and reward your employees for their achievements and successes.
• Encourage your employees to be innovative and creative.
• Conduct fair and effective performance appraisal discussions, and write
effective appraisals.
• Foster team-level learning and development in support of group-level
engagement and performance.
• Monitor the overall climate and efforts of your employees and teams,
ensuring that job and organization demands do not lead to burnout.

Again, this book is a straightforward guide to driving employee engagement

through an expanded view of performance management processes, strategies, and
approaches. Our goal is to convey the essence of good management in helpful
and clear terms. We hope to assist you, as managers, with the tough, interpersonal
aspects of performance management, especially when it comes to creating the
conditions for trust and empowerment and providing feedback.
Let us now describe performance management as we refer to it in this book. When
most managers think of performance management, they tend to think of the annual
performance appraisal, a once-a-year event. Or some might go further and state
that as a process it includes goal setting, feedback, and appraisal. However, we
view performance management as an ongoing process that requires constant
attention. It includes goal setting, feedback, development, recognition, coaching,
and performance appraisal, built on a foundation of trust and empowerment, with
a constant focus on communication. We have found that in many companies,
the more formal processes, such as goal setting and performance appraisal, are
complex or given short shrift because of the daily press of business. The informal
processes, such as giving feedback and coaching for learning and development,
are functions that managers often do not feel comfortable doing. In this book,
we stress how important these formal and informal processes are and reinforce
not only how they contribute to increased performance but also how they foster
and sustain employee engagement. We cover these processes concisely so that
managers can use this book as a reference guide throughout the performance
management process.
Performance management involves a continuous cycle of activities, and it is
most effective under conditions of high trust and empowerment. Goal setting
and performance appraisal are the beginning and end points of performance
management. They frame the daily performance management process such as
providing feedback to employees and recognizing and rewarding their efforts.
In Chapter 1, we provide an overview of performance management and why
it is important. We also discuss and present findings from our study at XINC
that clearly show how you can use performance management to drive employee
engagement in your organization. In subsequent chapters, we cover each aspect
of our expanded view of performance management, highlighting how each
element of the process impacts engagement.
 Preface xxi

The first element we discuss—performance appraisal—is the focus of Chapter

2. It is the most familiar part of performance management, and the appraisal is
often the basis for making personnel-related decisions. We show you how to be
more effective at performance appraisal, describe the two major types of appraisal
you will likely encounter, and show you how to effectively discuss the link
between appraisal and compensation with your employees.
What it will take for you to build, create, and sustain the conditions of trust
and empowerment, central to both effective performance management and high
levels of employee engagement, is the subject of Chapter 3. We invited our
colleague, Jamie Moore, to cowrite the original chapter, much of which we build
upon in this edition. We present a variety of tools, checklists, and assessments
throughout the book, and in this chapter, you will find a reliable and valid survey
that you can use to gauge the extent to which you have created a climate of trust
and empowerment with your team.
In Chapter 4, we focus on goal setting, the foundation of the traditional
performance management process. Goals enable you to align individual and team
performance with organizational-level performance. Goal setting helps you drive
engagement as it clarifies expectations, often leading to more challenging work.
It also helps you add meaning to your employees’ jobs and work when you link
their efforts to your department’s and company’s purpose and being. In addition,
goals serve as the basis for communication about development and performance.
Goals also set the stage for the ongoing process of giving feedback. Giving
feedback is often the hardest part of a manager’s job. Managers shy away from
giving feedback to their employees about their performance—perhaps because
they fear they will be defensive or angry. After all, we want people to like us,
and giving them feedback to help change behavior or improve performance may
not endear them to us. But it should. We should all appreciate feedback because
it helps us to grow and improve our performance. Let us also recognize that
feedback is not necessarily negative. Giving positive feedback is important, too.
It makes others feel good about themselves, and it lets them know they are on
the right track. Feedback is important to sustaining engagement—helping
employees to know that their contributions are aligned with and of value to the
organization. So, the question becomes how can you give feedback in a way that
will help the other person listen? Chapter 5 describes the benefits of feedback
and ways to provide constructive feedback, as well as techniques for how to have
some of the more difficult manager–employee performance-related conversations.
On the other hand, there are many ways to recognize excellent performance
and promote employee engagement, but these, like feedback, are often avoided
or ignored. Managers just do not seem to feel comfortable telling employees that
they appreciate how hard they are working and how important their work is to
the department and the company. They may be afraid of offending others who
are not being recognized or embarrassing those who are. In Chapter 6, we cover
xxii Preface

ways of recognizing employees’ accomplishments and encourage you to use

recognition, along with feedback and coaching, to reinforce and drive expected
levels of performance.
In Chapter 7, we describe the increasingly popular topic of 360-degree
feedback surveys. Today, these surveys are used in many organizations to form-
alize the collection of feedback from multiple sources and to guide a manager’s
development and performance improvement. We try to demystify the process so
you can understand more clearly what it is, how it is typically used, and the benefits
that it offers your management employees as part of their continuous development
and learning. In fact, 360-degree feedback is the most frequently used tool in
conjunction with more formal coaching efforts—and we discuss coaching in
Chapter 8.
Although feedback is key to enhancing performance, coaching can significantly
increase the value of feedback, further improving your employees’ chances of
success. In Chapter 8, we explain the purpose and value of coaching, describe
how the coaching process works, answer key questions, show you what it takes
to coach effectively, and discuss the pros and cons of working with a professional
coach. By the way, not only does the act of coaching in and of itself tend to
increase engagement, but also you can use coaching to focus directly on increasing
your managers’ capacity to drive engagement in their own organizations.
After the coaching chapter, we turn, in Chapter 9, to managing employee
and team learning and development. Here, we emphasize the importance of
fostering self-development and learning from experience. In addition, we present
several constructs, such as career motivation and expansiveness, to help you better
assess and understand the extent to which your employees are self-developers.
We also show you how to promote and guide informal learning and how to help
your employees capitalize on that learning through reflection. As our research
will show, helping your employees to develop their skills is important for
employee engagement. In Chapter 9, we also define team learning, discuss how
to assess team-learning needs, and show you how to facilitate team learning to
improve your team’s performance and create a more engaged team.
Although we acknowledge that some writers more recently see burnout and
engagement as distinct concepts, in Chapter 10, we will continue to work with
the idea, largely for practical application and discussion purposes, that burnout
is, more or less, the opposite of engagement (similar to Maslach & Leiter, 1997).
Although in previous chapters, we describe the processes, techniques, and tools
that can drive engagement, in this chapter we focus on helping you to prevent
and cope with employee burnout. In fact, if your employees or teams are close
to or suffering from burnout, they will need focused attention to bring them
back to a normal level of effectiveness before they can be reengaged. We invited
two other colleagues, Christina Eisinger and Kathryn Guggenheim, to cowrite
the original chapter with us, much of which remains unchanged.
 Preface xxiii

So you might be asking, “What does it look like when all the elements of
performance management come together, and how does that impact employee
engagement?” Our last chapter answers this question through a short case in which
we illustrate the everyday realities of performance management, its holistic nature,
and how it affects engagement. You will recognize the importance of trust and
empowerment, how a manager’s actions can create the conditions for burnout,
and how personality factors can affect a manager’s expectations and behavior. You
will also recognize the value of having clear goals; providing, seeking, and using
feedback constructively; how 360-degree surveys and coaching can support
performance and development efforts; and how the end-of-year performance
appraisal and discussion provide understanding and closure to the end of one
performance year, while setting the stage for the beginning of a new one.
Finally, we leave you with a short set of expectations for how to use
performance management to drive engagement. We hope you will exceed these
expectations!
ACKNOWLEDGMENTS

We would like to formally thank Christina Eisinger, Kathryn Guggenheim, and

Jamie Moore—all excellent OD practitioners—for their contributions to the first
edition of this book, and specifically for their cowriting of that edition’s Chapter
3 ( Jamie) and Chapter 10 (Chris and Kate).
We would also like to thank Christina Chronister and Julie Toich, our editors,
and Taylor & Francis for their support.
1
THE PERFORMANCE
MANAGEMENT PROCESS AND
EMPLOYEE ENGAGEMENT

An Introduction
This book addresses how you, as a manager, can create an engaged workforce
through effective performance management. We explain how to use state-of-
the-art goal setting, feedback, coaching, development, appraisal and recognition
processes, strategies, and techniques, and how to build a climate of trust and em-
powerment. You will learn about 360-degree survey feedback, professional
coaching, and self-assessment. Overall, Employee Engagement through Effective Perform-
ance Management will help you to create a culture that encourages feedback and
development, promotes self-direction for continuous learning, and fosters employee
engagement.
You may work in a large multinational company; a smaller, perhaps culturally
diverse domestic firm; or a corporate start-up such as an e-commerce business.
Your company may have a traditional multilevel bureaucratic structure or a small,
flexible structure. Your company may be stable or, more likely in today’s world,
be undergoing transformational change. Regardless of your organizational context,
the fundamentals of performance management are the same. Setting goals, giving
feedback, coaching for performance effectiveness, evaluating performance, and
recognizing accomplishments are the cornerstones for maintaining an engaged
workforce.
Although your company may have a human resources department that designs
programs to support these elements (for instance, the corporate performance
appraisal program), the principal responsibility for performance management rests
with you and your company’s management team. Performance management,
though driven by the human resources department, is a business process that is
really “owned” by line managers, and will be most effective when it has strong
executive-level sponsorship (Bersin, 2006).
2 Performance Management Process

In this chapter, we define the performance management process, consider

managers’ attitudes and research about performance management, and highlight
the importance of feedback as a central element of the process. We then describe
our model of employee engagement and present our study of employee
engagement conducted at XINC. This study examines relationships between
perceptions of job conditions and feelings of engagement. Throughout the book,
we use these results together with research and ideas from other sources to make
our recommendations for supporting and improving employee engagement
through performance management. We conclude the chapter with an overview
of the book.

The Performance Management Process

Performance management is not a fixed sequence of events but a continuous process
that is constantly renewing itself as performance unfolds, especially as key events
create opportunities to demonstrate expertise and contribute to organizational goals.
In fact, the elements of the performance management process are not stand-
alone human resource programs. They are part of an integrated system and actions
that should be aligned with organizational objectives; under these conditions of
integration and alignment, the entire process moves away from being event driven
and becomes more strategic in perspective (London & Mone, 2009).
To reinforce the notion of integration, consider, for example, the following
relationships between goal setting, feedback, coaching, and appraisal:

• Goals provide the standard for feedback and performance appraisal.

• Feedback leads to setting goals for performance improvement and career
development.
• Coaching helps to process feedback, set meaningful goals, practice new
behaviors, seek additional feedback, and track changes in performance.
• Performance appraisal evaluates goal attainment and is a basis for ongoing
feedback, development planning, and continuous performance improvement.
Performance appraisal may be a formal annual or semiannual process con-
ducted by the employee’s immediate supervisor and is the basis for changes
in compensation. This is called “summative” appraisal. Performance appraisal
may be informal and in-the-moment, coming from the supervisor and/or
coworkers and be shaping and constructive—the basis for advice about how
to improve performance. This is called “formative” appraisal.

Managers’ Attitudes and Research about Performance

Management
Performance management, done well, makes employees more competitive and
engaged, enhances leadership development, supports transformational change,
 Performance Management Process 3

and, in general, contributes to higher levels of organization performance (Bersin,

2006). However, in research we have conducted at XINC (discussed later in
the chapter), we found that little more than half (53%) of employees surveyed
believed the performance management process was valued in the firm. Laff (2007)
also reported that 56 percent of line managers believe their performance
management programs are not valuable. Bersin has helped us understand why
managers might hold these views, noting that only 32 percent of organizations
surveyed have a consistent, enterprise-wide performance management process,
and that organizations vary significantly in the extent to which they have adopted
key performance management practices, such as cascading goals, self-appraisals,
360-degree feedback, development planning, and coaching. In addition, in their
review of relevant research, Kinicki, Jacobson, Peterson, and Prussia (2013) suggest
that managers are just not that good at executing the performance management
process—either because they are not sure what to do or are just not dedicating
the necessary time to the process. This is why human resource professionals are
concerned about making performance management a viable strategic process
(London & Mone, 2009).
Finally, there has been some noteworthy debate that provides additional
insight into making performance management more effective and successful.
Specifically, Pulakos and O’Leary (2011) raise the question: Why is performance
management broken? They report that through accumulated research and practice,
managers have a set of performance management tools and processes that should
work well (also noted by Adler et al., 2016), but that how they get implemented
and used is the issue at hand. Fundamentally, Pulakos and O’Leary suggest that
managers and leaders rush to implement new practices, such as cascading goals
or using 360-degree feedback for development or evaluation without considering
how to best implement those practices. The practices generally become an
administrative burden as part of the formal system, and are uncoupled from the
ongoing, day-to-day process of managing performance and development. Yet,
as Mone, Price, and Eisinger (2011) argue, formal performance management
methods and practices and tools can be of great utility and value when they mirror
the informal conversations managers have with their employees. These are the
kinds of valid, useful and practical methods, processes, etc., that we provide
throughout this book, not only in support of performance management, but also
in support of building an engaged workforce.

A Focus on Feedback
Although this book covers each of the major elements of performance
management, we emphasize feedback because it is the common thread stitching
together all the elements of the process and it often causes the most difficulty for
managers. Many managers simply do not know how to give feedback and do
not feel comfortable doing it. For instance, managers may fear employees’
4 Performance Management Process

defensive reactions and losing their loyalty and friendship if they give negative
feedback. These managers avoid spending time talking to employees about their
performance. Other managers do not value giving positive feedback, claiming
that employees know when they are doing a good job.
Despite these difficulties, our research shows that the feedback element of the
performance management process is a key driver of engagement. Feedback helps
managers build a learning culture that is able to adapt to meet changing business
needs. In this kind of culture, feedback and development are linked as employees
take responsibility for their own performance improvement in order to meet new
corporate expectations. As a result, employees value learning and development,
and this strengthens the organization’s ability to succeed in turbulent times.
In addition, employees generally feel that feedback and coaching will enhance
their professionalism and help them to maximize their performance potential and
outcomes. Your feedback positions your employees to be ready to meet future,
unanticipated challenges and to remain competitive for key positions and
advancement within the company.

Employee Engagement
Engagement, as a construct, is relatively complex. Remember we said that an
engaged employee is someone who feels involved, committed, passionate, and
empowered and demonstrates those feelings in work behavior. So, when we set
out to measure engagement and create a measure of engagement, we realized
that we had to try to capture this complexity in the facets we chose and the
questions we would use to measure employees’ level of engagement in our survey
research. We wanted to capture the various attitudes, behaviors, and dispositions
associated with employee engagement in order to help leaders and managers use
the results at individual, team, and organization levels. On the other hand,
academics and researchers tend to focus their efforts on narrowing and refining
the definition and scope of the term (Byrne, 2015). Additionally, most engage-
ment measures and the majority of the research emphasize job work engagement
or the employee’s relationship to his or her work. Our measure also includes a
focus on engagement with the larger organization, which again, may be more
important to managers and HRM practitioners (Schaufeli, 2014).
Our model of engagement, therefore, contains the following six facets
presented with the associated behaviors and attitudes that, in totality, represent
both our model and measure of engagement:

1. Involvement (e.g., feeling engaged, challenged by the work, energized to

perform at your best, and feeling good about the future).
2. Commitment (e.g., feeling committed to a long-term career at the company,
to the company’s success, and to consistently working with a high level of
focus and energy).
 Performance Management Process 5

3. Meaningfulness (e.g., finding your work meaningful and understanding how

you contribute to the success of your company).
4. Empowerment (e.g., feeling empowered to do your job, having the necessary
resources to do your job effectively, and holding a well-structured job).
5. Manager support (e.g., believing your manager cares about your career
development efforts and gives you resources for job-related training and recog-
nizes you when you do a good job so you feel valued for your contributions).
6. Loyalty (e.g., intending to remain with your company, being proud to work
for your company, and being willing to recommend your company as a place
to work).

In the next section, we turn to our employee engagement study. This is where
we identified in statistically valid ways predictors of employee engagement. That
is, these are the most important actions managers can take to drive high levels
of employee engagement. The majority of those actions fall in the realm of
performance management as presented in this book. If you do not want to read
about this study, or find our description of this study a bit too technical, you can
safely move on to the final section of this chapter—“Overview of the Book.”

Measuring Employee Engagement: A Study at a Global

Company
To test our ideas about employee engagement, we conducted a study using an
annual employee opinion survey at XINC. The company has more than 5,000
employees worldwide. The response rate for this Web-based survey exceeded 80
percent.
The survey contained more than 100 questions, answered on a 5-point (1–5)
Likert-type scale, with a neutral midpoint and responses ranging from strongly
disagree to strongly agree. The company had a standard set of items, but we felt
that additional items would be needed drawing from several researchers, in
particular, Kahn (1990), Macey and Schneider (2008), and Maslach and
Leiter (1997, 2008). We decided on 18 questions that would be used to capture
elements of employee engagement. We also used a single measure of employee
engagement. From a statistical perspective, the set of questions had a very high
degree of internal consistency (Cronbach’s alpha is 0.93), or, in other words, it
was a very reliable measure. When examining these questions in some detail, many
of them parallel the two most popular engagement measures, the Job Engagement
Scale (Rich, LePine, & Crawford, 2010) and the Utrecht Work Engagement Scale
(as reported in Byrne, Peters, & Weston, 2016). You would also find support for
many of these questions in studies of the relationship between engagement and
other constructs, such as feedback, job autonomy, and supervisor support (e.g.,
Christian et al., 2011; Crawford et al., 2010). We discuss these findings in the
6 Performance Management Process

chapters to come when they provide additional evidence and support beyond
this study for the key performance management practices we recommend to foster
engagement in the workplace.
So, to measure the level of employee engagement, we created an index by
computing the mean of the 18 questions, and then multiplied the mean (calculated
on a 1–5 scale) by a factor of 20 to create an index that ranges from 20 to 100
percent. This simple average index resulted in a 78 percent level of employee
engagement. However, senior leadership felt that instead of focusing on 18
questions, 10 would be sufficient to track employee engagement and examine
the variables that predicted it and that could be used to improve engagement.
They selected the following 10 questions:

1. I feel empowered to do my job.

2. My job is structured so that I can get work done effectively.
3. My job is challenging.
4. I understand how my work contributes to the overall success of XINC.
5. Overall, I find the work I do meaningful.
6. At XINC, I am energized to perform at my best.
7. Overall, I feel engaged at XINC company.
8. I consistently work with a very high level of focus, enthusiasm, energy, and
effort to get my job done.
9. I am committed to XINC’s success.
10. I feel valued as an employee of XINC company.

Next, we conducted an analysis to determine which survey items were most

highly related to the average of the 10 items, in essence, our shortened index of
employee engagement. This path analysis identified variables that best predicted
engagement and so could be used by managers to improve it. Results of the path
analysis showed eight direct predictors accounted for 61 percent of the variance
in the engagement measure, that is, together, the eight items predicted most (61
%) of reasons employees feel engaged by their work. Other reasons might not
have been included in our survey measure, or are individual reasons people have
that contribute to their feelings about their jobs, or are just errors in the rating
process. If we can affect 61 percent of the factors that influence engagement, we
felt we would be doing well. These eight predictors, along with their beta
coefficients are as follows (the beta coefficients from the regression analyses indicate
how much change a predictor can produce in the outcome variable for each unit
of change in the predictor):

1. I am encouraged to look for ways to improve my work processes and

productivity (b = 0.19).
2. The company communications I receive help me to understand XINC’s
strategy, vision and direction (b = 0.13).
 Performance Management Process 7

3. Overall, I have the resources I need to do my job effectively (b = 0.12).

4. XINC’s leadership acts with the best interest of employees in mind (b = 0.11).
5. I am satisfied with my opportunities for career progression and promotion
(b = 0.09).
6. I consider the total value of my compensation, benefits, and work experience
when I think about what XINC offers in exchange for my employment (b
= 0.08).
7. My manager is someone I can trust (b = 0.08).
8. My manager provides me with ongoing feedback that helps me improve my
performance (b = 0.02).

What is the practical implication for you? Although this study was conducted
in one large, global organization, these predictors or actions provide a roadmap
for how you can improve employee engagement. When you take these actions,
you will have a good chance of increasing your employees’ engagement.
Next, we conducted one more analysis. For each of these direct predictors of
employee engagement, we identified between three and five associated survey
questions as indirect predictors of employee engagement. That is, these variables
predicted the eight main predictors. A total of 28 survey questions fell into this
category of indirect predictor. The 19 of the 28 questions most closely related
to performance management as discussed in this book are listed by predictor in
Table 1.1. Again, the practical implication for you is that the table encompasses
a range of behaviors that you can demonstrate and conditions that you can create
that should further increase your ability to create a fully engaged workforce.
In conclusion, for XINC, this study provided valuable direction for how to
understand, address, and raise the level of employee engagement. The results are
also consistent with what other researchers are saying regarding employee
engagement, and more importantly, the study suggests very specific actions for
managers. Therefore, as mentioned earlier, we will from time to time reference
this study.

Overview of the Book

In each of the chapters, we address one specific element of performance
management. In Chapter 2, we begin with the familiar performance appraisal.
We describe the differences between formal and informal appraisals, and detail
the major steps in the appraisal process. We show you how to prepare for the
appraisal review meeting, and provide you with an easy-to-follow structure for
conducting it. We suggest how you can be a more effective evaluator of
performance and offer you a short assessment to determine if you are making
any critical evaluation errors.
In Chapter 3, we discuss the importance of building a climate of trust between
you and your employees, and present a model to guide you in your efforts. Trust
8 Performance Management Process
TABLE 1.1 Path Model Direct and Indirect Predictors of Employee Engagement
Related to Performance Management
Path Model Direct Predictor
My manager provides me
with ongoing feedback that
helps me improve my
performance.
I am satisfied with my
opportunities for career
progression and promotion.
I consider the total value
of my compensation,
benefits, and work
experience when I think
about what XINC offers
in exchange for my
employment.
My manager is someone
I can trust.
I am encouraged to look
for ways to improve my
work processes and
productivity.
The company
communications I receive
help me to understand
XINC’s strategy,
vision, and direction.
Overall, I have the
resources I need to
do my job effectively.
Path Model Indirect Predictor
• I had the opportunity to set goals with my manager.
• I am satisfied with the recognition I receive from
my manager.
• I had a career-planning discussion with my
manager.
• I am satisfied with the quality of my year-end
performance appraisal discussion.
• I have sufficient opportunities for training.
• My manager supports my career development
efforts.
• The organization’s policies for career progression
are fair.
• I am paid fairly for the work I do.
• At XINC, raises and promotions are based on merit,
not favoritism.
• My manager encourages me to be innovative and
creative in my work.
• My manager values my ideas and opinions.
• My manager treats me fairly and with respect.
• My manager listens to, and acts on, my needs and
concerns.
• I can speak my mind without fear of reprisal.
• People who challenge the way we do things around
here are valued.
• My manager helps me understand how my work
supports XINC.
• I can get the information I need to do my job.
• I have the decision-making authority to do my
job effectively.
• I have control over the quality of my work.
 Performance Management Process 9

is not only important to driving employee engagement but also a necessary

foundation for empowerment and crucial to successfully working with your
employees through all the phases of your company’s performance management
process.
In Chapter 4, we highlight the value of setting goals. We define the differences
between goals, strategies, and tactics, which are often confusing terms to managers.
We present a comprehensive goal-setting framework to help you ensure that your
department’s goals are meaningful, challenging, and aligned with your company’s
strategic direction. We then provide a step-by-step process for setting goals with
your employees. Finally, we show you how to solve the “goal-setting and
performance evaluation” conundrum.
Giving feedback is the focus of Chapter 5, and as mentioned earlier in this
chapter, managers often have trouble with this part of performance management.
Recognizing this, we include tips for delivering effective feedback, as well as
a short feedback self-assessment. This assessment will provide you with insight
into your own skill level and thinking about feedback. Drawing on research in
the areas of self-monitoring and self-esteem, we suggest ways for you to assess
your employees’ receptivity to feedback. We then present a short case and two
examples of feedback discussions to illustrate how to deliver feedback effectively
and successfully. We believe that this chapter will convince you that feedback is
indeed a valuable component of performance management, and that it will help
you learn how to provide constructive feedback that your employees will seek,
welcome, and accept. Your goal should be to create a culture in your department
or organization in which your employees feel comfortable talking about how to
improve their own and others’ performance.
We presume you believe that your employees deserve recognition for their
accomplishments, but chances are you also believe that salary increases and
promotions are all they need to feel recognized for their efforts. In Chapter 6,
we discuss what is probably the most often overlooked and underutilized element
of performance management—recognition, another form of feedback. We will
help you determine which behaviors and performance to recognize, how to choose
the most appropriate forms of recognition, and how to make your efforts at
recognizing your employees as effective as possible. When done well, your
recognition will focus performance improvement and development actions and
foster higher levels of engagement.
In Chapter 7, we address a method used to enhance the likelihood that your
employees will receive and use feedback. Called 360-degree feedback, this method
involves using a survey to systematically collect performance feedback from direct
reports, peers, supervisors, and sometimes customers. We discuss the advantages
and disadvantages of using 360-degree feedback survey results for making
administrative decisions about your employees or using the results solely for their
development. We also answer many of the questions that you and your employees
might have about the implementation and use of 360-degree feedback in your
10 Performance Management Process

department. We close the chapter with a sample survey, a sample report, and a
discussion of how to interpret the report. In terms of performance management,
you will see that the results from a 360-degree survey can be used to prompt
discussions about feedback, and can be a basis for establishing development goals
and targeting performance improvement.
We address coaching from two perspectives in Chapter 8. First, we show you
how you can improve your own capability as a coach, and then we describe the
pros and cons of professional coaching. We define coaching, clarify your role as
a coach, offer coaching tips, and show you how to use a five-step process we
call 5S coaching. We then discuss in detail what is involved with professional
coaching, including how to get a coach, what to expect, and the value a
professional coach can offer.
In Chapter 9, we show you how to manage your employees’ development
and how to help them become continuous learners and self-developers and
capitalize on formal and informal learning opportunities. We include assessments
for evaluating your employees’ learning needs and strategies to manage your
employees’ ongoing learning. In fact, we show you how to help your employees
“learn how to learn.” We also specifically address how to manage and facilitate
your team’s learning.
No doubt your employees face considerable challenges for the use of their
time and energy. Performance management helps you to focus their efforts. But
sometimes your employees, even your currently highly engaged employees, can
experience burnout. Chapter 10 focuses on burnout, the opposite end of the
spectrum from engagement. We define burnout and its causes, show you how
to identify the warning signs and symptoms of burnout in your employees, and
discuss how you can address and prevent burnout in your organization. You will
see that there is much you can do in your role as a manager to alleviate burnout
and help your employees get back on track to feeling productive and engaged.
In the final chapter, we use a case to illustrate performance management in
action and to show you how all the elements of the process work together to
drive performance and engagement. You will discover the value of midyear reviews
and coaching, of working with a professional coach, and of the use of 360-degree
feedback. We hope the case, as well as this book in general, are affirming and
motivational, encouraging you to devote time to performance management
in spite of all the demands you face. The payoff for you is that your employees
will be more involved in continuous learning, more focused on performance
excellence, and more engaged.

Appendix 1.1: Talent Management Suites and

Performance Management
A talent management suite can be thought of as an integrated set of applications
(integrated software) that is used primarily for attracting, developing, managing,
 Performance Management Process 11

and rewarding employees. If you are working in a larger organization, you are
probably familiar with one or more of these applications.
Talent management suite applications or modules, which can be used alone
or in concert with others, typically include workforce planning, recruiting,
onboarding, goal management, performance appraisal, competency assessment and
management, learning, career development, succession planning, recognition, and
compensation administration. Some leading vendors offering talent management
suites, including top performance management applications, are Cornerstone
OnDemand, SAP, and Oracle, while Saba and Halogen can be considered to
have strong performance management components in their overall talent
management suites; no vendor, however, dominates all components of the suite
(Cameron, Freyermuth, Hanscome, & Poitevin, 2015).
Given the purpose of this book, let us consider what one vendor has to offer
in terms of a performance management application. Although these applications
will vary somewhat from vendor to vendor in terms of what is included, for
example, learning and development might be a separate module, the Saba
Performance (Saba Software, Inc., 2014) application entails:

• Performance reviews, including 360-degree feedback and performance-driven

development plans;
• Goal management, including the ability to set goals, monitor goal progress, as
well as cascade and align goals;
• Social recognition and engagement, including various forms of supervisor and
peer recognition approaches;
• Coaching and development, including regular feedback and features such as
automated personal development recommendations.

Of course, we cover these and others aspects of performance management in

this book, providing best practices and showing how those practices foster
engagement. So, even if your organization’s performance management process
is online as a component of a talent management suite, these practices still apply
to conducting performance management effectively and successfully with your
employees.
Although we recommend that your organization adopt a performance
management module, if possible, to make the process that much more efficient
and effective, let us point out that the benefits of having more than just a
performance management application integrated with other modules are
noteworthy. For example, you could evaluate your employee’s behavior or
competencies as part of the annual performance appraisal and uncover an area
for development. A learning module, sometimes called an LMS or learning
management system, would electronically link the development area to relevant
classroom or online courses or a range of informal development experiences. This
linkage makes it easier for both you and your employee to identify possible formal
12 Performance Management Process

and informal training and development options. It would also make it easier
for your employee to register for the training and for you to track which
course(s) your employee registers for, when he or she will attend, and to verify
completion of the course. Your overall appraisal rating, on the other hand, could
be linked to a compensation module, which would automatically recommend a
possible merit increase based on your employee’s current salary and position in
the salary range, the size of the merit pool, and the actual rating.
In summary, you could probably imagine how much harder all of this would
be to accomplish if you had to check catalogues, policy manuals, administrative
guidelines, e-mails from HR, etc., to accomplish the same ends when it comes
to performance management, if not overall talent management.
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