performance management research topics

Performance Management Research Paper Topics

Performance management research paper topics are an area of academic inquiry that delves into the methods, strategies, and challenges involved in the evaluation, motivation, and enhancement of employee performance within an organizational context. This field is multifaceted and intersects with various disciplines such as human resources, organizational behavior, psychology, and leadership studies. This page aims to provide an exhaustive list of research paper topics in performance management, divided into ten distinct categories. Additionally, it includes a comprehensive article elucidating performance management principles and the breadth of research paper topics it encompasses. Guidance on how to choose and write a research paper in this field is also provided, along with an overview of iResearchNet’s custom writing services, offering expert assistance for those in need of tailored support for their academic endeavors in performance management.

100 Performance Management Research Paper Topics

The field of performance management is a dynamic and expansive area that bridges various domains such as human resources, organizational behavior, leadership, and technology. The study of performance management helps in understanding the strategies, tools, and methodologies used to assess, enhance, and sustain employee performance within an organization. This comprehensive list of performance management research paper topics is organized into ten distinct categories, each focusing on different aspects of performance management. These topics can serve as a starting point for students, researchers, and practitioners to explore new avenues and contribute to this growing field.

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• Designing Effective Performance Appraisal Systems
• Biases in Performance Evaluation
• 360-Degree Feedback Mechanisms
• The Role of Self-Assessment in Performance Evaluation
• Peer Evaluation and Team Performance
• Integrating Technology in Performance Appraisals
• Legal and Ethical Considerations in Appraisals
• Aligning Performance Appraisal with Organizational Goals
• Continuous versus Annual Performance Reviews
• The Relationship between Appraisal and Employee Motivation
• Aligning Performance Management with Organizational Strategy
• Role of Leadership in Performance Management
• Performance Management in Non-Profit Organizations
• Integrating KPIs within Performance Management Strategy
• Role of Organizational Culture in Performance Management
• Global Performance Management Strategies
• Implementing Balanced Scorecard Approach
• Managing Performance in Virtual Teams
• The Impact of Mergers and Acquisitions on Performance Management
• Performance Management in Family-Owned Businesses
• Identifying and Fostering High-Potential Employees
• Career Development and Performance Management
• Performance Management for Remote Workers
• The Role of Mentoring in Employee Development
• Individual Development Plans and Performance
• Employee Empowerment and Performance Management
• Customized Training Programs and Performance Enhancement
• Integrating Soft Skills Development in Performance Management
• Cross-Functional Training and Performance
• Managing Underperformance and Performance Improvement Plans
• AI and Machine Learning in Performance Management
• Utilizing Big Data in Performance Analysis
• Mobile Technologies for Continuous Performance Management
• Integrating HRIS Systems for Performance Tracking
• Privacy and Security Concerns in Performance Management Technology
• Automation and Performance Management
• The Impact of Social Media on Performance Management
• Cloud-Based Performance Management Solutions
• Virtual Reality Training and Performance Enhancement
• Technology Adoption and Change Management in Performance Systems
• Transformational Leadership and Performance
• The Role of Emotional Intelligence in Leadership Performance
• Authentic Leadership and Employee Performance
• Ethical Leadership and Performance Management
• Coaching Leadership and Performance Enhancement
• Gender Differences in Leadership and Performance
• Leadership Styles and Organizational Performance
• Developing Leadership Talent within an Organization
• Cross-Cultural Leadership and Global Performance Management
• Succession Planning and Leadership Performance
• Performance Management in Healthcare
• Educational Institutions and Performance Management
• Performance Management in the Public Sector
• Performance Management in Manufacturing Industries
• Hospitality Industry and Performance Management
• Performance Management in Start-ups
• Retail Sector and Performance Metrics
• Performance Management in the Gig Economy
• Outsourcing and Performance Management
• Performance Metrics in the Entertainment Industry
• Ethical Considerations in Performance Appraisal
• Whistleblowing and Organizational Performance
• Managing Ethical Dilemmas in Performance Management
• Sustainability and Performance Management
• Corporate Social Responsibility and Performance Metrics
• Ethical Leadership and Organizational Performance
• Integrating Ethics into Organizational Performance Culture
• Transparency and Fairness in Performance Evaluation
• Ethical Treatment of Underperforming Employees
• Social Ethics and Performance Management in Multinational Corporations
• Building High-Performance Teams
• Team Dynamics and Performance Metrics
• Conflict Management within Teams
• Cross-Functional Team Performance Management
• Virtual Team Performance Metrics
• Team Diversity and Performance
• Agile Teams and Performance Management
• Measuring Team Creativity and Innovation
• Team Collaboration Tools and Performance
• Rewards and Recognition in Team Performance
• Global Performance Standards and Metrics
• Cross-Cultural Performance Management
• Performance Management in Multinational Corporations
• Managing Expatriate Performance
• Global Talent Management and Performance
• Local vs. Global Performance Appraisal Methods
• Cultural Intelligence and Performance Management
• Managing Performance in Global Virtual Teams
• Performance Management Challenges in Emerging Markets
• Global Leadership and Performance Management
• Emerging Trends and Challenges in Performance Management
• Performance Management in the Post-COVID World
• The Role of Well-being and Mental Health in Performance
• Diversity, Equity, and Inclusion in Performance Management
• Integrating Millennials and Gen Z into Performance Culture
• Resilience and Agility in Performance Management
• The Future of Performance Management with AI
• Gamification and Employee Performance
• Gig Economy and Performance Management Challenges
• Remote Work and Performance Management Post-COVID
• Sustainability and Green Performance Metrics

The exploration of performance management research paper topics is an ongoing journey that reflects the evolving nature of organizations and the workforce. These topics offer a rich array of research opportunities that cater to different interests, backgrounds, and expertise levels. The multifaceted nature of performance management ensures its relevance and applicability across various sectors and geographical contexts. It is hoped that this comprehensive list of topics will inspire new insights, stimulate creativity, and contribute to the ongoing discourse in this vital area of management studies. Whether a novice researcher or an established scholar, there is a plethora of avenues to explore within the domain of performance management that can lead to meaningful contributions to both theory and practice.

Performance Management and the Range of Research Paper Topics

Introduction to performance management.

Performance Management is a continuous, dynamic process that aims to enhance organizational efficiency by aligning individual performance with organizational goals and values. It’s not just about assessing employee performance but also about understanding, managing, and optimizing that performance to achieve strategic objectives. It involves setting clear goals, continuously monitoring and evaluating performance, providing feedback, developing employee skills, and fostering a positive work environment.

This article will explore the intricate world of performance management, discussing key principles, concepts, and the extensive range of research paper topics it offers. From the traditional methods of performance appraisal to the contemporary integration of technology and ethics in managing performance, this field is rich with potential for exploration and innovation.

Key Principles and Concepts

• Alignment with Organizational Goals: One of the primary purposes of performance management is to ensure that individual and team goals are in harmony with the overall objectives of the organization.
• Continuous Monitoring and Feedback: Performance management is not a one-time event but a continuous process. Regular feedback helps employees understand their areas of strength and opportunities for improvement.
• Employee Development: Performance management plays a crucial role in identifying the training and development needs of employees. It allows for personalized development plans that help employees grow within the organization.
• Motivation and Engagement: By recognizing and rewarding outstanding performance, and by providing support and guidance where needed, performance management can significantly enhance employee motivation and engagement.
• Fair and Transparent Evaluation: Ethical considerations, including fairness, transparency, and consistency, must be upheld in performance evaluations to ensure trust and credibility in the system.
• Integration of Technology: The use of technology, such as AI and big data analytics, is transforming the ways in which performance is monitored and analyzed, offering more accurate and real-time insights.

Range and Depth of Research Paper Topics

Performance management is a multifaceted field that offers an extensive array of research topics. Here’s a glimpse into some areas:

• Performance Appraisal and Evaluation: This area explores various methods, tools, and approaches used in evaluating employee performance. It may include studies on biases in evaluation, legal aspects, 360-degree feedback, etc.
• Technology and Performance Management: How is technology transforming performance management? Research topics here could include the use of AI in performance analysis, privacy concerns in using technology, and the effectiveness of virtual reality training.
• Leadership and Performance Management: The role of leadership in shaping and driving performance within an organization is paramount. Topics in this area might include transformational leadership, ethical leadership, and the impact of different leadership styles on performance.
• Ethics and Performance Management: Ethics in performance management ensures that evaluations and processes are conducted with integrity and fairness. This might involve research into ethical dilemmas, corporate social responsibility, and transparency in performance evaluation.
• Performance Management in Different Sectors: Performance management practices can differ widely across sectors such as healthcare, education, manufacturing, and public administration. Studies can explore the unique challenges and solutions within these sectors.
• Emerging Trends and Challenges: The field of performance management is continually evolving. Topics in this category might include performance management in the gig economy, integration of mental health considerations, and post-COVID changes in performance management.

Performance management is an integral aspect of modern organizational life. It transcends mere evaluation, encompassing a wide range of practices aimed at maximizing both individual and organizational performance. Its complexity and dynamism offer rich opportunities for scholarly research across a multitude of areas.

The range of research paper topics in performance management reflects the breadth and depth of this field. Whether examining the role of leadership, the impact of technology, ethical considerations, or sector-specific challenges, there is a vast landscape to explore and contribute to.

Understanding performance management is not only vital for business leaders and HR professionals but also offers a compelling and wide-ranging field of study for academics and students alike. The diversity of topics and the continuous evolution of practices ensure that performance management will remain a vibrant and essential area of study and application in the foreseeable future.

How to Choose Performance Management Research Paper Topics

The selection of a research paper topic is not just a random choice; it is the foundational step in the research process that can define the success of the entire project. When it comes to performance management—a field that is multifaceted and ever-changing—choosing a relevant and engaging topic can be both exciting and challenging. Below, you’ll find guidance on how to select a topic in the area of performance management that resonates with your interests, aligns with academic requirements, and contributes to the body of knowledge in this field.

1. Understand Your Interest and Passion:

• Identify what aspect of performance management genuinely interests you.
• Consider what themes, theories, or practices you are eager to explore.
• Reflect on personal experiences or observations that might inspire a specific focus.

2. Consider the Scope and Relevance:

• Evaluate if the topic is broad enough to explore in detail but narrow enough to handle within the constraints of your paper.
• Ensure that the topic is relevant to your field of study and current trends in performance management.

3. Assess Available Resources and Feasibility:

• Consider whether sufficient resources, data, and literature are available for your chosen topic.
• Assess if the research can be conducted within the given timeframe and with the resources at your disposal.

4. Align with Academic and Career Goals:

• Choose a topic that aligns with your academic goals and contributes to your future career.
• Think about how this research might fit into your broader educational or professional trajectory.

5. Check for Originality and Contribution:

• Seek topics that offer a new perspective, approach, or insight into performance management.
• Consider how your research might fill gaps in existing literature or contribute to the field.

6. Seek Guidance from Faculty or Professionals:

• Consult with professors, advisors, or professionals in the field to get insights and recommendations.
• Use their expertise to refine your topic and ensure it is academically sound.

7. Review Existing Literature:

• Conduct a preliminary literature review to understand what has already been studied.
• Identify areas that need further exploration or where you can offer a fresh perspective.

8. Consider Ethical Implications:

• Ensure that the chosen topic complies with ethical standards, especially if it involves human subjects.
• Consider the societal implications and responsibilities tied to your research.

9. Reflect on Practical Applications:

• Think about how your research might have real-world applications or implications.
• Consider the potential impact of your findings on organizational practices or policies.

10. Validate with a Research Proposal:

• Create a brief research proposal outlining your topic, research questions, and methodology.
• Use this proposal to validate the feasibility and relevance of the topic with peers or faculty.

Choosing a research paper topic in the domain of performance management is an intricate task that demands careful consideration and thoughtful planning. By understanding your interests, evaluating the scope, ensuring originality, and aligning with both academic and real-world relevance, you can select a topic that not only fulfills academic requirements but also contributes to the broader discourse in performance management. Whether you are exploring technological innovations, ethical dilemmas, leadership influences, or sector-specific challenges, the key lies in choosing a topic that resonates with you and adds value to this multifaceted field. These tips serve as a roadmap to guide you through this critical phase of your research journey, ensuring that the topic you select is engaging, achievable, and impactful.

How to Write a Performance Management Research Paper

Writing a research paper on performance management requires more than just a basic understanding of the subject. It demands a structured approach, thoughtful analysis, critical thinking, and adherence to academic standards. Performance management, being a multifaceted field that covers various aspects like employee evaluation, performance metrics, leadership strategies, organizational behavior, and technological advancements, offers a rich landscape for scholarly investigation. This section provides comprehensive guidance on how to craft a research paper in this domain, from the initial stages of idea formulation to the final draft, ensuring academic rigor and relevance.

1. Identify Your Research Focus and Questions:

• Define the Problem: Clearly state the problem or issue you plan to investigate within performance management.
• Develop Research Questions: Formulate specific research questions that guide your investigation, focusing on ‘what’, ‘how’, and ‘why’ aspects.
• Set Objectives: Outline the aims and objectives of your research, providing direction and purpose.

2. Conduct an Extensive Literature Review:

• Search Reputable Sources: Utilize academic databases to find peer-reviewed articles, books, and journals related to your topic.
• Analyze Previous Studies: Evaluate existing research to identify gaps, controversies, trends, and key theories in performance management.
• Synthesize Findings: Provide an organized summary of the existing literature, highlighting the relevance to your research.

3. Develop a Research Methodology:

• Choose the Research Design: Decide whether to conduct qualitative, quantitative, or mixed methods research based on your questions and objectives.
• Select Tools and Techniques: Determine the appropriate data collection methods, such as surveys, interviews, observations, or experiments.
• Ensure Ethical Compliance: Follow ethical guidelines, especially if your research involves human subjects.

4. Collect and Analyze Data:

• Gather Relevant Data: Use systematic techniques to collect data that directly answers your research questions.
• Analyze Data Thoroughly: Apply statistical or thematic analysis to interpret the data, looking for patterns, relationships, or insights.
• Ensure Accuracy: Validate the findings by cross-referencing with the literature or using triangulation.

5. Construct a Strong Thesis Statement:

• Define Your Argument: Develop a clear, concise thesis statement that encapsulates the main argument or insight of your paper.
• Position Your Thesis: Place the thesis at the end of the introduction, ensuring it aligns with the research focus and questions.

6. Organize the Paper Effectively:

• Create an Outline: Develop a logical structure, including introduction, methodology, findings, discussion, conclusion, and references.
• Use Subheadings: Divide the content into coherent sections with subheadings, facilitating readability.
• Incorporate Visuals: Use charts, graphs, or tables if they enhance understanding.

7. Write with Clarity and Precision:

• Use Formal Language: Maintain an academic tone, avoiding colloquial expressions or jargon.
• Be Concise: Express ideas clearly and succinctly, avoiding unnecessary complexity.
• Maintain Coherence: Ensure that sentences and paragraphs flow smoothly, supporting the overall argument.

8. Cite Sources Properly:

• Follow Citation Style: Adhere to a specific citation style (APA, MLA, etc.), maintaining consistency throughout.
• Give Proper Credit: Cite all sources accurately to avoid plagiarism and to lend credibility to your argument.

9. Revise and Edit:

• Review for Content: Check that the content aligns with the research focus and that arguments are well-supported.
• Edit for Grammar and Style: Look for grammatical errors, typos, and stylistic inconsistencies.
• Seek Peer Review: Consider getting feedback from peers or faculty to ensure objectivity and quality.

10. Consider Practical Implications:

• Discuss Real-world Relevance: Highlight how your findings can be applied in practical settings or contribute to the field of performance management.
• Make Recommendations: Provide actionable recommendations or suggestions for further research.

Crafting a research paper on performance management is an intellectually stimulating and academically rewarding process. It requires careful planning, in-depth research, critical thinking, and meticulous writing. By following these ten detailed tips, aspiring researchers can navigate the complexities of the subject matter, producing a paper that not only meets academic standards but also contributes valuable insights to the field of performance management. Whether investigating leadership effectiveness, employee motivation, performance metrics, or technological interventions, the key lies in a methodical approach, intellectual curiosity, and scholarly integrity. This guide serves as a comprehensive resource to aid students in this academic endeavor, fostering excellence in research, writing, and practical application.

iResearchNet Writing Services

iResearchNet, a reputable name in academic writing services, offers a comprehensive and personalized approach to performance management research papers. Understanding the multifaceted aspects of performance management, our services are designed to meet individual needs, academic standards, and current industry insights. Let’s explore the 13 features that set iResearchNet apart:

• Expert Degree-Holding Writers: Our team consists of highly qualified writers holding academic degrees in management and related fields. With a blend of theoretical understanding and hands-on industry experience, our writers not only understand the intricate concepts of performance management but also provide real-world insights that enrich the content of your research paper.
• Custom Written Works: Every research paper at iResearchNet is crafted from scratch, based on the unique requirements, topic, and academic level of the student. We pride ourselves on delivering original and plagiarism-free work, reflecting your individual perspective, insights, and voice, making each paper truly unique.
• In-Depth Research: Our writers conduct comprehensive research using credible and up-to-date sources to support your thesis and arguments. By integrating the latest trends, findings, and methodologies in performance management, we ensure that your paper stands out for its depth of analysis and relevance to current industry practices.
• Custom Formatting: Adherence to specific formatting styles is paramount in academic writing. We meticulously follow the formatting guidelines prescribed by your institution, whether it’s APA, MLA, Chicago/Turabian, or Harvard style. Every citation, reference, and structural element is carefully aligned with the required standards.
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The future of feedback: Motivating performance improvement through future-focused feedback

Jackie Gnepp

1 Humanly Possible, Inc., Oak Park, Illinois, United States of America

Joshua Klayman

2 Booth School of Business, University of Chicago, Chicago, Illinois, United States of America

Ian O. Williamson

3 Wellington School of Business and Government, Victoria University of Wellington, Wellington, New Zealand

Sema Barlas

4 Masters of Science in Analytics, University of Chicago, Chicago, Illinois, United States of America

Associated Data

All relevant data are within the manuscript and its Supporting Information files ( S1 Dataset ).

Managerial feedback discussions often fail to produce the desired performance improvements. Three studies shed light on why performance feedback fails and how it can be made more effective. In Study 1, managers described recent performance feedback experiences in their work settings. In Studies 2 and 3, pairs of managers role-played a performance review meeting. In all studies, recipients of mixed and negative feedback doubted the accuracy of the feedback and the providers’ qualifications to give it. Disagreement regarding past performance was greater following the feedback discussion than before, due to feedback recipients’ increased self-protective and self-enhancing attributions. Managers were motivated to improve to the extent they perceived the feedback conversation to be focused on future actions rather than on past performance. Our findings have implications for the theory and practice of performance management.

Introduction

Once again, Taylor Devani is hoping to be promoted to Regional Manager. Chris Sinopoli, Taylor’s new boss, has arranged a meeting to provide performance feedback, especially regarding ways Taylor must change to succeed in a Regional Manager position. Like Taylor’s previous boss, Chris is delighted with Taylor’s award-winning sales performance. But Taylor was admonished in last year’s performance appraisal about cavalier treatment of customers and intolerant behavior toward employees. Taylor was very resistant to that message then and there have been no noticeable improvements since. What can Chris say to get through to Taylor?

This vignette highlights three points that will be familiar to theorists, researchers, and practitioners of performance feedback. First, the vignette reflects that performance feedback often includes a mix of both positive and negative feedback. Second, it reflects the common experience that the recipients do not always accept the feedback they get, let alone act on it. Third, it raises the question of what a feedback provider should say (and perhaps not say) in order to enable and motivate the feedback recipient to improve.

The present research focuses on feedback conversations in the context of work and career, but it has implications far beyond those contexts. Giving feedback about performance is one of the key elements of mentorship, coaching, supervision, and parenting. It contributes to conflict resolution in intimate relationships [ 1 ] and it is considered one of the most powerful activities in education [ 2 ]. In all these instances, the primary goal is to motivate and direct positive behavior change. Thus, a better understanding of where performance feedback conversations go wrong and how they can be made more effective is an important contribution to the psychology of work and to organizational psychology, but also to a broad range of psychological literatures, including education, consulting, counseling, and interpersonal communications.

Across three studies, we provide the first evidence that performance feedback discussions can have counterproductive effects by increasing the recipient’s self-serving attributions for past performance, thereby decreasing agreement between the providers and recipients of feedback. These unintended effects are associated with lower feedback acceptance and with lower motivation to change. Our studies also provide the first empirical evidence that feedback discussions promote intentions to act on the feedback to the extent they are perceived as focusing on future performance, rather than past performance. These findings suggest a new line of investigation for a topic with a long and venerable history.

Performance feedback in the workplace

Performance feedback can be distinguished from other types of managerial feedback (e.g., “production is up 12% from last quarter”) by its focus on the recipients’ conduct and accomplishments–doing the right things the right way with the right results. It is nearly universal in the modern workplace. Even the recent trend toward doing away with annual performance reviews has come with a directive for managers to have more frequent, if less formal, performance feedback conversations [ 3 ].

Psychologists have known for decades that the effects of performance feedback on performance are highly variable and not always beneficial: A meta-analysis by Kluger and DeNisi found that the modal impact on performance is none [ 4 ]. Such findings fostered a focus on employee reactions to performance appraisals and the idea that employees would be motivated to change behavior only if they accepted the feedback and believed there was a need to improve [ 5 – 7 ]. Unfortunately, unfavorable feedback is not easily accepted. People have been shown to cope with negative feedback by disputing it, lowering their goals, reducing commitment, misremembering or reinterpreting the feedback to be more positive, and engaging in self-esteem repair, none of which are likely to motivate efforts to do a better job next time [ 8 – 16 ].

We are not recommending that feedback providers avoid negative feedback in favor of positive. Glossing over discrepancies between actual performance and desired standards of performance is not a satisfactory solution: Both goal-setting theory and ample evidence support the idea that people need summary feedback comparing progress to goals in order to adjust their efforts and strategies to reach those standards or goals [ 17 , 18 ]. The solution we propose is feedback that focuses less on diagnosing past performance and more on designing future performance.

Diagnosing the past

Managers talk to employees about both the nature and the determinants of their performance, often with the goal of improving that performance. Indeed, feedback theorists have long argued that managers must diagnose the causes of past performance problems in order to generate insight into what skills people need to improve and how they should change [ 19 ]. Understanding root causes is believed to help everyone decide future action.

Yet causality is ambiguous in performance situations. Both feedback providers and feedback recipients make causal attributions for performance that are biased, albeit in different ways. Whereas the correspondence bias leads the feedback provider to over-attribute success and failure alike to qualities of the employee [ 20 – 22 ], this bias is modified by a self-serving bias for the feedback recipient. Specifically, feedback recipients are more inclined to attribute successes to their positive dispositional qualities, and failures to external forces such as bad luck and situational constraints [ 23 – 26 ]. These self-enhancing and self-protective attributions benefit both affect and feelings of self-worth [ 27 , 28 ].

Organizational scholars have theorized since the 1970’s that such attribution differences between leaders and subordinates are a likely source of conflict and miscommunication in performance reviews [ 12 , 29 – 31 ]. Despite this solid basis in social psychological theory, little evidence exists regarding the prevalence and significance of attribution misalignment in the context of everyday workplace feedback. In the workplace, where people tend to trust their colleagues, have generally positive supervisor-supervisee relations they wish to maintain, and where feedback often takes place within a longer history of interaction, there may be more agreement about the causes of past events than seen in experimental settings. In Study 1, we explored whether attribution disagreement is indeed prevalent in the workplace by surveying hundreds of managers working in hundreds of different settings in which they gave or received positive or negative feedback. (In this paper, “disagreement” refers to a difference of opinion and is not meant to imply an argument between parties.) If workplace results mirror experimental findings and the organizational theorizing reviewed above, then our survey should reveal that when managers receive negative feedback, they make more externally focused attributions and they view that feedback as lacking credibility.

Can feedback discussions lead the two parties to a consensual understanding of the recipient’s past performance, so that its quality can be sustained or improved? One would be hard pressed these days to find a feedback theorist who did not advocate two-way communication in delivering feedback. Shouldn’t the two parties expect to converge on the “truth” of the matter through a sharing of perspectives? Gioia and Sims asked managers to make attributions for subordinates’ performance both before and after giving feedback [ 32 ]. Following the feedback conversation, managers gave more credit for success and less blame for failure. However, Gioia and Simms did not assess whether the recipients of feedback were influenced to think differently about their performance and that, after all, is the point of giving feedback.

Should one expect the recipients of workplace feedback to meet the providers halfway, taking less credit for success and/or more responsibility for failure following the feedback discussion? There are reasons to suspect not. The self-serving tendency in attributions is magnified under conditions of self-threat, that is, when information is conveyed that questions, contradicts, or challenges a person’s favorable view of the self [ 33 ]. People mentally argue against threatening feedback, rejecting what they find refutable [ 11 , 34 ]. In Studies 2 and 3, we explored the effects of live feedback discussions on attributions, feedback acceptance, and motivation to improve. We anticipated that feedback recipients would find their self-serving tendencies magnified by hearing feedback that challenged their favorable self-views. We hypothesized that the very act of discussing performance would create or exacerbate differences of opinion about what caused past performance, rather than reduce them. We expected this divergence in attributions to result in recipients rejecting the feedback and questioning the legitimacy of the source, conditions that render feedback ineffective for motivating improvement [ 7 , 14 , 35 ].

Focusing on the future

Given the psychological obstacles to people’s acceptance of negative feedback, how can managers lead their subordinates to want to change their behavior and improve their performance? This question lies at the heart of the challenge posed by feedback discussions intended both to inform people and motivate them, sometimes referred to as “developmental” feedback. Despite its intended focus on learning and improvement [ 36 , 37 ], developmental feedback may nonetheless explicitly include a diagnostic focus on the past [ 38 ], such as “why the subjects thought that they had done so poorly, what aspects of the task they had difficulty with, and what they thought their strong points were” (p. 32). In contrast, we propose that the solution lies in focusing on the future: We suggest that ideas generated by a focus on future possibilities are more effective at motivating change than are ideas generated by diagnosing why things went well or poorly in the past. This hypothesis is based on recent theory and findings regarding prospective thinking and planning.

Much prospection (mentally simulating the future) is pragmatic in that it involves thinking about practical actions one can take and behavioral changes one can make to bring about desirable future outcomes [ 39 ]. In the context of mixed or negative performance feedback, such desirable outcomes might include improved performance, better results, and greater rewards. Research comparing forward to backward thinking suggests that people find it easier to come up with practical solutions to problems in the future than to imagine practical ways problems could have been avoided in the past: People are biased toward seeing past events as inevitable, finding it difficult to imagine how things might have turned out differently [ 40 – 42 ]. When thinking about their past failures, people tend to focus on how things beyond their control could have been better (e.g., they might have had fewer competing responsibilities and more resources). In contrast, when thinking about how their performance could be more successful in the future, people focus on features under their control, generating more goal-directed thoughts [ 43 ]. Thinking through the steps needed to achieve desired goals makes change in the future feel more feasible [ 44 ]. And when success seems feasible, contrasting the past with the future leads people to take more responsibility, initiate actions, engage in effortful striving, and achieve more of their goals, as compared to focusing on past difficulties [ 45 ]. For all these reasons, we hypothesize that more prospective, forward looking feedback conversations will motivate intentions toward positive change.

Overview of studies

We report three studies. The first explored the prevalence and consequences of differing attributional perspectives in the workplace. Managers described actual, recently experienced incidents of work-related feedback and the degree to which they accepted that feedback as legitimate. The second study was designed to examine and question the pervasive view that a two-way feedback discussion leads the parties to a shared explanation of past performance and a shared desire for behavior change. We hypothesized instead that the attributions of feedback providers and recipients diverge as a consequence of reviewing past performance. In that study, businesspeople role-played a performance review meeting based on objective data in a personnel file. The third study is a modified replication of the second, with an added emphasis on the developmental purpose of the feedback. Finally, we used data from Studies 2 and 3 to model the connections among provider-recipient attribution differences, future focus, feedback acceptance, and intentions to change. Our overarching theory posits that in the workplace (and in other domains of life), feedback conversations are most beneficial when they avoid the diagnosis of the past and instead focus directly on implications for future action.

We conducted an international survey of managers who described recent work-based incidents in which they either provided or received feedback, positive or negative. We explored how the judgmental biases documented in attribution research are manifested in everyday feedback conversations and how those biases relate to acceptance of feedback. Given well-established phenomena of attribution (correspondence bias, actor-observer differences, self-serving bias), we expected managers to favor internal attributions for the events that prompted the feedback, except for incidents in which they received negative feedback. We hypothesized that managers who received negative feedback would, furthermore, judge the feedback as less accurate and the feedback providers as less qualified, when compared to managers who received positive feedback or who provided feedback of either valence.

Participants

Respondents to this survey were 419 middle and upper managers enrolled in Executive MBA classes in Chicago, Barcelona, and Singapore. They represented a mix of American, European, and Asian businesspeople. Females comprised 18% of participants. For procedural reasons (see Results), the responses of 37 participants were excluded from analysis, leaving a sample of 382. This study was approved by the Institutional Review Board at the University of Chicago, which waived the requirement for written consent as was its customary policy for studies judged to be of minimal risk, involving only individual, anonymized survey responses.

Managers completed the survey online, using the Cogix ViewsFlash survey platform. When they accessed the survey, they were randomly assigned to one of four conditions. Each participant was instructed to think of one recent work-related incident in which they gave another person positive feedback (provider-positive condition), gave another person negative feedback (provider-negative condition), received positive feedback from another person (recipient-positive condition), or received negative feedback from another person (recipient-negative condition). They were asked to describe briefly the incident and the feedback.

The managers were then asked to complete the statement, “The feedback was __% accurate,” and to rate the qualification of the feedback provider on a scale from 0 = unqualified to 10 = completely qualified. Providers were asked, “How qualified were you to give the feedback?” whereas recipients were asked, “The person who gave you the feedback—how qualified was he or she to give the feedback?”

Lastly, the managers were instructed to make causal attributions for the incident. They were told, “Looking back now at the incident, please assign a percentage to each of the following causes, such that they sum to 100%.” Two of the causes corresponded to Weiner’s internal attribution categories (ability and effort) [ 28 ]. The other two causes corresponded to Weiner’s external attribution categories (task and luck). The wording of the response choices varied with condition. For example, in the provider-positive condition, the response choices were __% due to abilities he or she possessed, __% due to the amount of effort he or she put in, __% due to the nature of what he or she had to do, __% due to good luck, whereas for the recipient-negative condition, the attribution choices were __% due to abilities you lacked, __% due to the amount of effort you put in, __% due to the nature of what you had to do, __% due to bad luck. (Full text is provided in S1 Text .)

A review of the incidents and feedback the participants described revealed that 25 managers had violated instructions by writing about incidents that were not work-related (e.g., interactions with family members) and 12 had written about incidents inconsistent with their assigned condition (e.g., describing feedback received when assigned to a feedback provider condition). The data from these 37 managers were excluded from further analysis, leaving samples of 96, 92, 91, and 103 in the provider-positive, provider-negative, recipient-positive, and recipient-negative conditions, respectively. We tested the data using ANOVAs with role (providing vs. receiving feedback) and valence (positive vs. negative feedback) as between-subjects variables.

There were three dependent variables: managers’ ratings of feedback accuracy, of provider qualifications, and of internal vs. external causal attributions (ability + effort vs. task + luck). Analyses of the attribution variable used the arcsine transformation commonly recommended for proportions [ 46 ]. For all three dependent measures, there were significant main effects of role and valence and a significant interaction between them (see Table 1 and Fig 1 ).

Results for each dependent variable are shown by role (provider vs. recipient of feedback) and valence (positive vs. negative feedback). Error bars show standard errors.

All F (1, 378), all p < .001; effect size measures are partial η 2 . Correlations among dependent measures are shown in S1 Table .

Providers of feedback reported that the incidents in question were largely caused by the abilities and efforts of the feedback recipients. They reported that their feedback was accurate and that they were well qualified to give it. These findings held for both positive and negative feedback. Recipients of feedback made similar judgments when the feedback was positive: They took personal credit for incidents that turned out well and accepted the positive feedback as true. However, when the feedback was negative, recipients judged the failures as due principally to causes beyond their control, such as task demands and bad luck. They did not accept the negative feedback received, judging it as less accurate ( t (192) = 7.50, p < .001) and judging the feedback provider less qualified to give it t (192) = 5.25, p < .001). One manager who defended the reasonableness of these findings during a group debrief put it this way: “We are the best there is. If we get negative feedback for something bad that happened, it probably wasn’t our fault!”

Study 1 confirms that attributional disagreement is prevalent in the workplace and associated with the rejection of negative feedback. Across a large sample of real, recent, work-related incidents, providers and recipients of feedback formed very different impressions of both the feedback and the incidents that prompted it. Despite the general tendency of people to attribute the causes of performance to internal factors such as ability and effort, managers who received negative feedback placed most of the blame outside themselves. Our survey further confirmed that, across a wide variety of workplace settings, managers who received negative feedback viewed it as lacking credibility, rating the feedback as less accurate and the source as less qualified to provide feedback.

These results are consistent with attribution theory and the fact that feedback providers and recipients have access to different information: Whereas providers have an external perspective on the recipients’ observable behavior, feedback recipients have unique access to their own thoughts, feelings, and intentions, all of which drove their performance and behavior [ 24 , 47 ]. For the most part, feedback recipients intend to perform well. When their efforts pay off, they perceive they had personal control over the positive outcome; when their efforts fail, they naturally look for causes outside themselves [ 48 , 49 ]. For their part, feedback providers are prone to paying insufficient attention to situational constraints, even when motivated to give honest, accurate, unbiased, and objective feedback [ 20 ].

In this survey study, every incident was unique: Providers and recipients were not reporting on the same incidents. Thus, the survey method permits an additional mechanism of self-protection, namely, biased selection of congenial information [ 50 ]. When faced with a request to recall a recent incident that resulted in receipt of negative feedback, the managers may have tended to retrieve incidents for which they were not to blame and that did not reflect poorly on their abilities. Such biased recall often occurs outside of conscious awareness [ 51 , 52 ]. For the recipients of feedback, internal attributions for the target incident have direct implications for self-esteem. Thus, they may have tended to recall incidents aligned with their wish to maintain a positive self-view, namely, successes due to ability and effort, and failures due to task demands and bad luck. It is possible, of course, that providers engaged in selective recall as well: They may have enhanced their sense of competence and fairness by retrieving incidents in which they were highly qualified and provided accurate feedback. Biased selection of incidents is not possible in the next two studies which provided all participants with identical workplace-performance information.

In Study 2 we investigated how and how much the feedback conversation itself alters the two parties’ judgments of the performance under discussion. This study tests our hypotheses that feedback discussions do not lead to greater agreement about attributions and may well lead to increased disagreement, that attributional misalignment is associated with rejection of feedback, and that future focus is associated with greater feedback effectiveness, as measured by acceptance of feedback and intention to change. The study used a dyadic role-play simulation of a performance review meeting in which a supervisor (newly hired Regional Manager Chris Sinopoli) gives performance feedback to a subordinate (District Manager Taylor Devani, being considered for promotion). The simulation was adapted from a performance feedback exercise that is widely used in management training. Instructors and researchers who use similar role-play exercises report that participants find them realistic and engaging, and respond as they would to the real thing [ 32 , 53 ].

The decision to use a role-play method involves trade-offs, especially when compared to studying in vivo workplace performance reviews. We chose this method in order to gain greater experimental control and a cleaner test of our hypotheses. In our study, all participants were given identical information, in the form of a personnel file, ensuring that both the providers and recipients of feedback based their judgements on the same information. This control would not be possible inside an actual company, where the two parties might easily be influenced by differential access to organizational knowledge and different exposure to the events under discussion. Additionally, participants in our study completed questionnaires that assessed their perceptions of the feedback-recipient’s performance, the discussion of that performance, and the effects of the feedback discussion. Because this study was a simulation, participants were able to respond honestly to these questionnaires. Participants in an actual workplace performance review might need to balance honesty with concerns for appearances or repercussions; for example, feedback recipients might be hesitant to admit having little intention to change in response to feedback. On the other hand, there are a variety of conditions and motivations that exist in the workplace that cannot be easily simulated in a role-play, such as the pre-existing relationship between the feedback provider and recipient, and the potential long-term consequences of any performance review. Further work will be required to determine how findings from this study apply in workplace settings.

This study comprised two groups that received the same scenarios, but differed with regard to the timing and content of the questionnaires. Recall that the primary goal of Study 2 was to explore how the feedback discussion affects participants’ judgments. For this, we analyzed data from the pre-post group. Participants in this group completed questionnaires both before and after the discussion. Their post-discussion questionnaire included questions evaluating the conduct and consequences of the feedback discussion, including ratings of future focus and intention to change. A second group of participants (the post-only group) completed only a questionnaire after the feedback discussion that did not include future-focus or intention-to-change items. This group allowed us to test whether answering the same questions twice (pre and post the feedback discussion) affected the results.

Participants were 380 executives and MBA students enrolled in advanced Human Resources classes in Australia. They represented an international mix of businesspeople: 59% identified their “main cultural identity” as Australian, 20% as a European nationality or ethnicity, 24% Asian, and 12% other; 5% did not indicate any. (Totals sum to more than 100% because participants were able to choose two identities if they wished.) They averaged 35 years of age, ranging from 23 to 66. Females comprised 35% of the sample. Participants worked in pairs. Five pairs were excluded from analysis because one member of the dyad did not complete the required questionnaires, leaving a sample of 117 dyads in the pre-post group and 68 in the post-only group. This study was approved by the Institutional Review Board at the University of Melbourne. Participants’ written consent was obtained.

Each participant received a packet of materials consisting of (a) background on a fictional telecommunications company called the DeltaCom Corporation, (b) a description of both their role and their partner’s role, (c) task instructions for completing the questionnaires and the role-play itself, (d) a copy of the personnel file for the subordinate, and (e) the questionnaire(s). The names of the role-play characters were pre-tested to be gender neutral. (The full text of the materials is provided in S2 – S7 Texts .)

Personnel file . The personnel file documented a mixed record including both exemplary and problematic aspects of the District Manger’s performance. On the positive side was superior, award-winning sales performance and consistently above-average increases in new customers. On the negative side were consistently below-average ratings of customer satisfaction and a falling percentage of customers retained, along with high turnover of direct reports, some of whom complained of the District Manager’s “moody, tyrannical, and obsessive” behavior. Notes from the prior year’s performance discussion indicated that the District Manager did not fully accept the developmental feedback received at that time, instead defending a focus on sales success and the bottom line.

Questionnaires . Participants in the pre-post group completed a pre-discussion questionnaire immediately following their review of the District Manager’s personnel file. They rated the quality of the District Manager’s job performance on sales, customer retention, customer satisfaction, and ability to manage and coach employees, using 7-point scales ranging from 1 = Very Low to 7 = Very High. They then rated the importance of these four aspects of the recipient’s job performance on 7-point scales ranging from 1 = Not Important to 7 = Very Important. Lastly, participants gave their “opinion about the causes of Taylor Devani’s successes by assigning a percentage to each of the following four causes, such that the four causes together sum to 100%.” They did the same for “Taylor Devani’s failures.” Two response categories described internal attributions: “% due to Taylor’s abilities and personality” and “% due to the amount of effort and attention Taylor applied.” The other two described external attributions: “% due to Taylor’s job responsibilities, DeltaCom’s expectations, and the resources provided” and “% due to chance and random luck.” (We chose the expression “random luck” to imply uncontrollable environmental factors in contrast to a trait or feature of a lucky or unlucky person [ 54 ].) Participants chose a percentage from 0 to 100 for each cause, using scales in increments of 5 percentage points. In 4.4% of cases, participants’ four attribution ratings summed to a total, T , that did not equal 100. In those cases, all the ratings were adjusted by multiplying by (100 / T ).

Participants in both the pre-post group and the post-only group completed a post-discussion questionnaire following their feedback discussion. This questionnaire asked the participants to rate the favorability of the feedback given, on an 11-point scale from 0 = “Almost all negative” to 10 = “Almost all positive”; the accuracy of the feedback, on a scale from 0% to 100% in increments of 5%; and how qualified the provider was to give the feedback, on an 11-point scale from 0 = “Unqualified” to 10 = “Completely qualified.” It continued by asking all of the pre-discussion questionnaire items, allowing us to assess any rating changes that occurred in the pre-post group as a consequence of the intervening feedback discussion. Next, for those in the pre-post group, the questionnaire presented a series of 7-point Likert-scale items concerning the conduct and consequences of the feedback. These included items evaluating future focus and intention to change. Additionally, the post-discussion questionnaires of both groups contained exploratory questions about the behaviors of the individual role-players; these were not analyzed. On the final page, participants provided demographic information about themselves.

Participants were randomly assigned to dyads and to roles within each dyad. They were sent to private study rooms to complete the procedure. Instructions indicated (a) 15 minutes to review the personnel file, (b) 5 minutes to complete the pre-discussion questionnaire (pre-post group only), (c) 20 minutes to hold the feedback discussion, and (d) 15 minutes to complete the post-discussion questionnaire. Participants were instructed to stay in role during the entire exercise, including completion of the questionnaires. They were told to complete all steps individually without consulting their partner except, of course, for the feedback discussion. The feedback provider was directed by the task instructions to focus on the recipient’s “weaknesses as a manager–those aspects of performance Taylor must change to achieve future success if promoted.” The reason for this additional instruction was to balance the discussion of successes and failures. Prior pilot testing showed that without this instruction there was a tendency for role-players to avoid discussing shortcomings at all, a finding consistent with research showing that people are reluctant to deliver negative feedback and sometimes distort it to make it more positive [ 35 , 55 – 57 ]. When they finished, the participants handed in all the materials and took part in a group debrief of the performance review simulation.

We used analyses of variance to study differences in how the participants interpreted the past performance of the feedback recipient. The dependent variables were participant judgments of (a) internal vs. external attributions for the feedback recipient’s performance, (b) the quality of various aspects of job performance, and (c) the importance of those aspects. One set of ANOVAs used post-feedback questionnaire data from both the pre-post and post-only groups to check whether completing a pre-discussion questionnaire affected post-discussion results. The independent variables were role (provider or recipient of feedback), outcomes (successes or failures of the feedback recipient), and group (pre-post or post-only). A second set of ANOVAs used data from the pre-discussion and post-discussion questionnaires of the pre-post group to test our hypothesis that feedback discussions tend to drive providers’ and recipients’ interpretations of performance further apart rather than closer together. The independent variables in these analyses were role , outcomes , and timing (before or after feedback conversation). In all the ANOVAs, the dyad was treated as a unit (i.e., as though a single participant) because the responses of the two members of a dyad can hardly be considered independent of one another. Accordingly, role, outcomes, group, and timing were all within-dyad variables.

A third set of analyses provided tests of our hypotheses that provider-recipient disagreement about attributions interferes with feedback effectiveness, and that a focus on future behavior, rather than past behavior, improves feedback effectiveness. We conducted regression analyses using data from the pre-post group, whose questionnaires included the set of Likert-scale items concerning the conduct and consequences of the feedback discussion. The dependent variables for these regressions were two measures of feedback effectiveness derived from recipient responses: the recipients’ acceptance of the feedback as legitimate and the recipients’ expressed intention to change. The predictors represented five characteristics measured from the post-feedback questionnaire: provider-recipient disagreement about attributions, about performance quality, and about performance importance; how favorable the recipient found the feedback to be; and the extent to which the recipient judged the conversation to be future focused.

Role differences in the interpretation of past performance before and after feedback discussion

Given the results of Study 1 and established phenomena in social psychology, we expected feedback recipients to make internal attributions for their successes and external for their failures more than feedback providers do, to hold more favorable views of their job performance quality than providers do, and to see their successes as more important and/or their failures as less important than providers do. Analyses of the post-discussion ratings in the pre-post and post-only groups ( S1 Analyses ) confirm those expectations for attributions and for performance quality, but not for performance importance. There were no differences between the pre-post and post-only groups on any of those measures, with all partial η 2 < .02. Beyond that, we hypothesized that feedback conversations do not reduce provider-recipient differences in interpretation, and may well make them larger. Accordingly, we report here the analyses that include the timing variable, using data from the pre-post group ( Table 2 ).

F (1, 116) for internal attributions, F (1, 114) for performance quality and importance. Underlined values are effects with p < .05 and partial η 2 > .05.

Internal vs . external attributions . Participants in both roles provided attribution ratings before and after the discussion, separately “about the causes of Taylor Devani’s successes” and “about the causes of Taylor Devani’s failures.” There were three significant effects, all of which were interactions. Those were Role x Outcomes, Outcomes x Timing, and Role x Outcomes x Timing. As shown in Fig 2 , the three-way interaction reflects the following pattern: The parties began with only minor (and not statistically significant) differences in attributional perspective. Following the feedback discussion however, those differences were much greater. There were no significant effects involving timing for feedback providers: Their attributions changed only slightly from pre- to post-discussion. Feedback recipients, in contrast, showed a highly significant Outcomes x Timing interaction, F (1, 116) = 19.6, p < .001, η 2 = .14. Following the feedback conversation, recipients attributed their successes more to internal factors than they did before the conversation and they attributed their failures more to external factors than before ( t (116) = 4.5, p < .001 and t (116) = 3.3, p = .001, respectively). At the end, the two parties’ attributions were well apart on both successes and failures ( t (116) = 2.3, p = .024 and t (116) = 3.0, p = .003). In sum, the performance review discussion led to greater disagreement between the feedback providers and recipients due to the recipients of feedback making more self-enhancing and self-protecting performance attributions.

Results are shown by role (provider vs. recipient of feedback), outcomes (successes vs. failures), and timing (before vs. after feedback). Error bars show standard errors.

Performance quality . There were main effects of outcomes and role, but no interactions. As intended, participants rated performance on sales much more highly than they rated the other job aspects (6.72 vs. 3.32 out of 7). Overall, recipients evaluated their performances slightly more positively than the providers did (5.13 vs. 4.91).

Performance importance . There was a main effect of outcome, modified by significant Role x Outcomes and Role x Outcomes x Timing interactions. To understand these effects, we followed up with analyses of role and timing for successes and for failures, separately. Feedback recipients rated their successes as more important than feedback providers did (6.41 and 6.12, respectively; F (1, 115) = 6.20, p = .014, η 2 = .05), with no significant effects of time. In contrast, importance ratings for failures showed a Role x Timing interaction ( F (1, 114) = 7.77, p = .006, η 2 = .06): Providers rated failures as more important before discussion, becoming more lenient following discussion (5.75 vs. 5.42; t (114) = 2.22, p = .028), consistent with the findings of Gioia and Sims [ 32 ]. Recipient ratings showed no significant change as a consequence of discussion.

These analyses suggest that in performance conversations, feedback providers do not lead recipients to see things their way: Recipient interpretations of past performance do not become more like provider interpretations. In fact, following discussion, recipients’ causal attributions are further from those of the providers. Moreover, across dyads, there was no correlation between the recipient’s ratings and the provider’s ratings following discussion: Although a ceiling effect limits the potential for correlations on the quality of sales performance (success), the other measures, especially attributions, show considerable variation in responses across dyads but still no provider-recipient correlations ( S2 and S3 Tables). For performance quality, performance importance, and attributions, for successes and for failures, all | r | < .12 ( p > .22, N = 115 to 117).

Effects of attribution disagreement and future focus on recipients’ acceptance of feedback and intention to change

We hypothesized that provider-recipient disagreement about attributions negatively impacts feedback in two ways, by reducing the extent to which recipients accept the feedback as legitimate, and by reducing the recipient’s intentions to change in response to the feedback. We further hypothesized that a focus on future behavior, rather than past behavior, would engender greater acceptance of feedback and greater intention to change. The present study provides evidence for both of those hypotheses.

We measured feedback acceptance by averaging ratings on feedback accuracy and provider qualifications, both scaled 0 to 100 ( r = .448). We measured intention to change as the average of recipients’ responses to three of the Likert questions in the post-feedback-discussion questionnaire (α = .94):

Based on the feedback, you are now motivated to change your behavior. You see the value of acting on Chris’s suggestions. You will likely change your behavior, based on the feedback received.

We analyzed these two measures of feedback effectiveness using regressions with five variables that might predict the outcome of the discussion: post-feedback disagreement about attributions, performance quality, and performance importance (all scored such that positive numbers indicate that the recipient made judgments more favorable to the recipient than did the provider); how favorable the recipient found the feedback to be (rated from 0 = almost all negative to 10 = almost all positive); and the extent to which the recipient thought the conversation was future focused. This last measure is the average of the recipient’s ratings on the following three Likert questions on the post-feedback questionnaire (α = .75):

You and Chris spent a large part of this session generating new ideas for your next steps. The feedback conversation centered on what will make you most successful going forward. The feedback discussion focused mostly on your future behavior.

We hypothesized that the recipients’ acceptance of feedback and intention to change would be affected by the recipients’ impressions of how future focused the discussion was. That said, we note that the provider’s and the recipient’s ratings of future focus were well correlated across dyads ( r (115) = .423, p < .001), suggesting that recipients’ ratings of future focus reflected characteristics of the discussion that were perceived by both parties.

As shown in Table 3 , recipients’ ratings of future focus proved to be the best predictor of their ratings of both feedback acceptance and intention to change. Recipients’ favorability ratings also significantly predicted their intention to change and, especially, their acceptance of the feedback. Attribution disagreement between providers and recipients predicted lower acceptance of feedback, but not intention to change. Differences of opinion regarding the quality and importance of various aspects of job performance had no significant effects and, as shown by Model 2 in Table 3 , removing them had almost no effect.

Model 1 includes all five predictor variables. Model 2 excludes the two that showed no significant effects in Model 1. Numbers in brackets are adjusted R 2 s.

As in Study 1, we again observe that the providers and recipients of feedback formed very different impressions about past performance. A new and important finding in this study is that feedback conversations did not merely fail to diminish provider-recipient disagreements about what led to strong and weak performance; they actually turned minor disagreements into major ones. Recipients made more self-enhancing and self-protective attributions following the performance discussion, believing more strongly than before that their successes were caused by internal factors (their ability, personality, effort, and attention) and their failures were caused by external factors (job responsibilities, employer expectations, resources provided, and bad luck). There were also modest disagreements regarding the quality and importance of different aspects of the recipient’s job performance, but these did not worsen following discussion. The most important source of disagreement between providers and recipients then, especially following the feedback conversation, was not about what happened, but about why it happened.

What led recipients of performance feedback to accept it as legitimate and helpful? The best predictor of feedback effectiveness was the extent to which the discussion was perceived as future focused. Unsurprisingly, feedback was also easier to accept when it was more favorable. As predicted, recipients were more likely to accept feedback when they and the feedback providers agreed more about what caused the past events. Greater attribution agreement, however, did not increase recipients’ intention to change. These findings suggest that reaching agreement on the causes of past performance is neither likely to happen (because feedback discussions widen causal attribution disagreement) nor is it necessary for fostering change. What does matter is the extent to which the feedback conversation focuses on generating new ideas for future success. We further explore the relations among all these variables following the reporting of Study 3.

Performance feedback serves goals other than improving performance. For example, performance reviews often serve as an opportunity for the feedback provider to justify promotion and compensation decisions. For the recipient, the conversation may provide an opportunity for image management and the chance to influence employment decisions. People may fail to distinguish between evaluation and improvement goals when providing and receiving feedback. In Study 2, the instructions were intended to be explicit in directing participants to the developmental goal of performance improvement, rather than accountability or rewards. Nevertheless, the providers’ wish to justify their evaluations and the recipients’ wish to influence them might have contributed to the differences we observed in attributions and in judgments about the feedback’s legitimacy. To address this concern, we added a page of detailed company guidelines that emphasized the primacy of the performance-improvement goal over the goals of expressing, justifying, or influencing evaluations. There were two versions of these guidelines, which did not differ in their effects.

Participants were 162 executives and MBA students enrolled in advanced Human Resources classes in Australia. An international mix of businesspeople, 74% said they grew up in Australia or New Zealand, 10% in Europe, 22% in Asia, and 7% other. (Totals sum to more than 100% because some participants indicated more than one.) Participants averaged 39 years of age, ranging from 27 to 60. Females comprised 37% of the participants.

Participants read the same scenario and instructions as in Study 2, with an added page of guidelines for giving developmental feedback ( S8 Text ). They then completed the same post-discussion questionnaires used for the pre-post group of Study 2, minus the ratings of performance quality and importance for various aspects of the job, which showed no effects in Study 2. (The full text of the questionnaires is provided in S9 and S10 Texts). Taken together, these modifications kept the procedure to about the same length as in Study 2. This study was approved by the Institutional Review Board at the University of Melbourne. Written consent was obtained.

Role differences in the interpretation of past performance

As in Study 2, we calculated the sum of the percentages of attributions assigned to internal causes (ability and personality + effort and attention), applying an arcsine transformation. As before, we analyzed the internal attributions measure with a mixed-model ANOVA treating each dyad as a unit. There were two within-dyads variables: role (provider or recipient), and outcomes (successes or failures) and one between-dyads variable (guideline version ). There were no effects involving guideline version (all F < 1). The main effects of role ( F (1, 79) = 50.12, p < .001, η 2 = .39) and outcomes ( F (1, 79) = 113.8, p < .001, η 2 = .59) and the interaction between them ( F (1, 79) = 86.34, p < .001, η 2 = .52) are displayed in Fig 3 , along with the parallel post-feedback results from the previous two studies. As in Study 2, the two parties’ post-discussion attributions were well apart on both successes and, especially, failures ( t (80) = 3.3 and 9.4 respectively, both p ≤ .001). Again, the correlations between the provider’s and the recipient’s post-conversation performance attributions across dyads were not significant for either successes ( r (79) = -.04, p > .69) or failures ( r (79) = -.13, p > .23) suggesting that conversation does not lead the dyad to a common understanding of what led to good or poor performance.

Results are shown by role (provider vs. recipient of feedback) and valence/outcomes (positive feedback for successes vs. negative feedback for failures), following feedback conversation. Error bars show standard errors.

We conducted regression analyses of the recipient’s feedback acceptance and intention to change as in Study 2. The regression models included three predictors: future focus, attribution disagreement, and feedback favorability. Results, shown in Table 4 , replicated our Study 2 finding that future focus is the best predictor of both feedback acceptance and intention to change. As before, attribution disagreement predicted lower acceptance, but in this study it also predicted less intention to change. We again found that feedback favorability ratings were associated with greater acceptance, but this time, not with intention to change. Recipients and providers were again significantly correlated in their judgments of how future focused the conversation was ( r (79) = .299, p = .007).

Numbers in brackets are adjusted R 2 s.

Future focus, as perceived by the recipients of feedback, was once again the strongest predictor of their acceptance of the feedback and the strongest predictor of their intention to change. Conversely, attribution disagreement between the provider and recipient of feedback was associated with lower feedback acceptance and weaker intention to change. As in Studies 1 and 2, recipients made more internal attributions for successes than providers did and, especially, more external attributions for failures. The added guidelines in this study emphasizing performance-improvement goals over evaluative ones did not alleviate provider-recipient attribution differences. Indeed, those differences were considerably larger in this study than in the previous one and were more similar to those seen in Study 1 (see Fig 3 ).

Future focus, attributions, favorability, and the effectiveness of feedback

The strongest predictor of feedback effectiveness is the recipient’s perception that the feedback conversation focused on plans for the future rather than analysis of the past. We seek here to elucidate the relationship between future focus and feedback effectiveness by looking at the interrelations among the three predictors of effectiveness we studied: future focus, attribution disagreement, and feedback favorability.

The analyses that follow include data from all participants who were asked for ratings of future focus, namely those in Study 3 and in the pre-post group of Study 2. We included study as a variable in our analyses; no effects involving the study variable were significant. Nonetheless, because the two studies drew from different samples and used slightly different methods, inferential statistics could be impacted by intraclass correlation within each study. Therefore, we also tested for study-specific differences in parameter estimates using hierarchical linear modeling [ 58 , 59 ]. No significant differences between studies emerged, confirming the appropriateness of combining the data. (The HLM results are provided in S2 Analyses .)

The association between future focus and feedback effectiveness could be mediated by the effects of attribution disagreement and/or feedback favorability. Specifically, it could be that perceiving the conversation as more future focused is associated with closer agreement on attributions or with perceiving the feedback as more favorable, and one or both of those latter two effects leads to improved feedback effectiveness. Tests of mediation, following the methods of Kenny and colleagues [ 60 ], suggest otherwise (see Fig 4 ). These analyses partition the total associations of future focus with feedback acceptance and with intention to change into direct effects and indirect effects. Indirect effects via reduced attribution disagreement were 6.2% of the relation of future focus to feedback acceptance and 2.2% to intention to change. Indirect effects via improved perceptions of feedback favorability were 20.8% of the relation of future focus to feedback acceptance and 4.5% to intention to change. Thus, there is little to suggest that closer agreement on attributions or improved perceptions of feedback favorability account for the benefits of future focus on feedback effectiveness.

The two feedback effectiveness measures are feedback acceptance and intention to change. Following Kenny (2018), standardized regression coefficients are shown for the relations between future focus and two hypothesized mediators, attribution disagreement and feedback favorability ( a ), the mediators and the feedback effectiveness measures controlling for future focus ( b ), future focus and the effectiveness measures ( c ), and future focus and the effectiveness measures controlling for the mediator ( c′ ). The total effect ( c ) equals the direct effect ( c′ ) plus the indirect effect ( a · b ). Data are from Studies 2 and 3. a p = .072; * p = .028; ** p < .001.

Interactions

Future focus might have synergistic or moderating effects. In particular, we hypothesized that perceiving the conversation as more future focused may moderate the negative impact of attribution disagreement on feedback effectiveness. Alternatively, future focus may be especially beneficial when agreement about attributions is good, or when attribution differences are neither so big that they cannot be put aside, nor so small that the parties see eye to eye even when they focus on the past. Similarly, future focus may be especially beneficial when feedback is most unfavorable to the recipient, or when it’s most favorable, or when it is neither so negative that the recipients can’t move past it, nor so positive that the recipients accept it even when the conversation focuses on the past.

We conducted regression analyses with feedback acceptance and intention to change as dependent variables and future focus, feedback favorability, attribution disagreement, and their first-order interactions as predictors. Because some plausible interactions are nonlinear, we defined low, intermediate, and high values for each of the three predictor variables, dividing the 198 participants as evenly as possible for each. We then partitioned each predictor into linear and quadratic components with one degree of freedom each. With linear and quadratic components of three predictors plus a binary variable for Study 2 vs. Study 3, there were seven potential linear effects and 18 possible two-way interactions. We used a stepwise procedure to select which interactions to include in our regressions, using an inclusion parameter of p < .15. Results are shown in Table 5 .

Models include all main effects and those first-order interactions that met an entry criterion of p < .15, plus data source (Study 2 vs. Study 3). Statistically significant values are underlined.

Future focus interacted with feedback favorability—marginally for feedback acceptance and significantly for intention to change. As shown in Fig 5 , recipients who gave low or intermediate ratings for future focus accepted the feedback less when it was most negative ( t (128) = 5.21, p < .001) and similarly, reported less inclination to change ( t (128) = 3.23, p = .002). In contrast, the recipients who rated the feedback discussion as most future focused accepted their feedback and indicated high intention to change at all levels of feedback favorability. These patterns suggest that perceiving future focus moderates the deleterious effect of negative feedback on feedback effectiveness.

Results for each measure of feedback effectiveness are shown by three levels of perceived future focus and three levels of perceived feedback favorability. Error bars show standard errors. Data are from Studies 2 and 3.

On the other hand, we find no evidence that future focus moderates the negative effect of attribution disagreement on feedback effectiveness. Future focus did interact marginally with attribution disagreement for intention to change. However, the benefits of perceiving high vs. low future focus may, in fact, be stronger when there is closer agreement about attributions: The increase in intention to change between low and high future focus groups was 2.30 with high disagreement, 2.37 with intermediate disagreement, and 3.24 in dyads with low disagreement, on a scale from 1 to 7.

Regression-tree analyses

Regression-tree analyses can provide additional insights into the non-linear relations among variables [ 61 ], with a better visualization of the best and worst conditions to facilitate feedback acceptance and intention to change. These analyses use the predictors (here, future focus, attribution disagreement, and feedback favorability) to divide participants into subgroups empirically, maximizing the extent to which values on the dependent measure are homogeneous within subgroups and different between them. We generated regression trees for each of our two effectiveness measures, feedback acceptance and intention to change. Fig 6 shows the results, including all subgroups (nodes) with N = 10 or more.

The trees depict the effects of future focus, attribution disagreement, and feedback favorability on our two measures of feedback effectiveness. The width of branches is proportional to the number of participants in that branch. Node 0 is the full sample of 198. Values on the X axis are standardized values for each dependent measure. Data are from Studies 2 and 3.

Both trees show that future focus is the most important variable, dividing into lower and higher branches at Nodes 1 and 2, and further distinguishing highest-future groups at Nodes A8 and B6. These representations also reinforce the conclusion that perceived future focus does not operate mainly via an association with more positive feedback or with better agreement on attributions. However, attribution disagreement does play a role, with more agreement leading to better acceptance of feedback and greater intention to change, as long as future focus is at least moderately high (Nodes A3 vs. A4 and B7 vs. B8). (The lack of effect at Node B6 is likely a ceiling effect.) Unfavorable feedback makes matters worse under adverse conditions: when future focus is low (Nodes B3 vs. B4) or when future focus is moderate but attribution disagreement is large (nodes A5 vs. A6).

General discussion

Our research was motivated by a need to understand why performance feedback conversations do not benefit performance to the extent intended and what might be done to improve that situation. We investigated how providers and recipients of workplace feedback differ in their judgements about the causes of performance and the credibility of feedback, and how feedback discussions impact provider-recipient (dis)agreement and feedback effectiveness. We were particularly interested in how interpretations of past performance, feedback acceptance, and intention to change are affected by the recipient’s perception of temporal focus, that is, the extent to which the feedback discussion focuses on past versus future behavior.

Management theorists typically advocate evaluating performance relative to established goals and standards, diagnosing the causes of substandard performance, and providing feedback so that people can learn from the past [ 19 ]. They also posit that feedback recipients must recognize there is a problem, accept the feedback as accurate, and find the feedback providers fair and credible in order for performance feedback to motivate improvement [ 7 , 14 , 35 ]. Unfortunately, we know that performance feedback often does not motivate improvement [ 4 ]. Our research contributes in several ways to understanding why that is and how feedback conversations might be made more effective.

Decades of attribution theory and research have elucidated the biases thought to produce discrepant explanations for performance between the providers and recipients of feedback. We show that for negative feedback, these discrepancies are prevalent in the workplace. We also show that larger attribution discrepancies are associated with greater rejection of feedback and, in our performance review simulations, with weaker intention to change. These findings support recent research and theory linking performance feedback, work-related decision making, and attribution theory: Instead of changing behavior in response to mixed or negative feedback, people make self-enhancing and self-protecting attributions and judgements they can use to justify not changing [ 8 , 14 , 62 ].

Our research suggests that the common practice of discussing the employees’ past performance, with an emphasis on how and why outcomes occurred and what that implies about the employees’ strengths and weaknesses, can be counterproductive. Although the parties to a feedback discussion may agree reasonably well about which goals and standards were met or unmet, they are unlikely to converge on an understanding of the causes of unmet goals and standards, even with engaged give and take. Instead, the feedback conversation creates or exacerbates disagreement about the causes of performance outcomes, leading feedback recipients to take more credit for their successes and less responsibility for their failures. This suggests that feedback conversations that attempt to diagnose past performance act as another form of self-threat that increases the self-serving bias [ 33 ]. Surely this runs counter to what the feedback provider intended.

At the same time, we find that self-serving attributions need not stand in the way of feedback acceptance and motivation to improve. A key discovery in our research is that the more recipients feel the feedback focuses on next steps and future actions, the more they accept the feedback and the more they intend to act on it. In fact, when feedback is perceived to be highly future focused, feedback recipients respond as well to predominantly negative feedback as to predominantly positive feedback. Future focus does not nullify self-serving attributions and their detrimental effects [see also 63 ], but it does enable productive feedback discussions despite them.

We used two complementary research methods. Study 1 used a more naturalistic and thus more ecologically valid method, collecting retrospective self-reports from hundreds of managers about actual feedback interactions in a wide variety of work situations [see 64 ]. Studies 2 and 3 used a role-play method that allowed us to give all participants identical workplace performance information, a good portion of which was undisputed and quantitative. With that design, response differences between the providers and recipients of feedback are due entirely to role, unconfounded by differences in knowledge and experience.

What role plays cannot establish is the magnitude of effects in organizational settings. Attribution misalignment and resistance to feedback might easily be much stronger in real workplace performance reviews where it would be rare for the parties to arrive with identical, largely unambiguous information. Moreover, managers’ investment in the monetary and career outcomes of performance reviews might lead feedback recipients to feel more threatened than in a role play and thus to disagree even more with unfavorable feedback. On the other hand, the desire to maintain employment and/or to maintain good relationships with supervisors might motivate managers to re-assess their past achievements, to change their private attributions, and to be more accepting of unfavorable feedback. Data from our role-play studies may not speak to the magnitude of resistance to feedback in work settings (although our survey results suggest it’s substantial), but they do show that feedback acceptance is increased when the participants perceive their feedback to be focused on the future.

Implications for future research and theory

There are few research topics more important to the study of organizations than performance management. Feedback conversations are a cornerstone of most individual and team performance management, yet there is still much we do not know about what should be said, how, and why. Based on research into the motivational advantages of prospective thinking, we hypothesized that feedback discussions perceived as future focused are the most effective kind for generating acceptance of feedback and fostering positive behavior change. Our findings support that hypothesis. The present research contributes to the literature on prospection by highlighting the role of interpersonal interactions in facilitating prefactual thinking and any associated advantages for goal pursuit [ 39 , 43 – 45 , 63 , 65 ]. In this section we suggest three lines of future research: (a) field studies and interventions; (b) research into the potential role of self-beliefs; and (c) exploration of the conversational dynamics associated with feedback perceived as past vs. future focused.

Field research and intervention designs

Testing feedback interventions in the workplace and other field settings is an important future step toward corroborating, elaborating, or correcting our findings. It will be necessary to develop effective means to foster a more future-focused style of feedback. Then, randomized controlled trials that contrast future-focused with diagnostic feedback can demonstrate the benefits that may accrue from focusing feedback more on future behavior and less on past behavior. Participant evaluations of the feedback discussions can be supplemented by those of neutral observers. Such evaluations are directly relevant to organizational goals, including employee motivation, positive supervisor-supervisee relations, and effective problem solving. Assessing subsequent behavior change and job performance is both important and complicated for evaluating feedback effectiveness: Seeing intentions through to fruition depends on many factors, including individual differences in self-regulation [ 66 , 67 ] and factors beyond people’s control, such as competing commitments, limited resources, and changing priorities [ 68 – 71 ]. Nevertheless, the ultimate proof of future-focused feedback will lie in performance improvement itself.

Self-beliefs and future focus

If future focus enhances feedback effectiveness, it may do so via self-beliefs. Growth mindset and self-efficacy, for example, are self-beliefs that influence how people think about and act on the future. Discussions that focus on what people can do in the future to improve performance may encourage people to view their own behavior as malleable and to view better results as achievable. If future focus helps people access this growth mindset, it should orient them toward mastering challenges and improving the self for the future: Whereas people exercise defensive self-esteem repair when in a fixed mindset, they prefer self-improvement when accessing a growth mindset [ 72 , 73 ]. Similarly, feedback conversations that focus on ways the feedback recipient can attain goals in the future may enhance people’s confidence in their ability to execute the appropriate strategies and necessary behaviors to succeed. Such self-efficacy expectancies have been shown to influence the goals people select, the effort and resources they devote, their persistence in the face of obstacles, and the motivation to get started [ 74 , 75 ]. Thus, research is needed to assess whether future focus alters people’s self-beliefs (or vice versa; see below) and if these, in turn, impact people’s acceptance of feedback and intention to change.

We found sizeable variation in the extent to which dyads reported focusing on the future. Pre-existing individual differences in self-beliefs may contribute to that variation. Recent research, for example, finds that professors with more growth mindsets have students who perform better and report being more motivated to do their best work [ 76 ]. In the case of a feedback conversation, we suspect that either party can initiate thinking prospectively, but both must participate in it to sustain the benefits.

Conversational dynamics and future focus

Unlike most studies of people’s reactions to mixed or negative feedback, our studies use face-to-face, real-time interaction, that is to say, two people in conversation. Might conversational dynamics associated with future-focused feedback contribute to its being better accepted and more motivating than feedback focused on the past? Do managers who focus more on the future listen to other people’s ideas and perspectives in ways that are perceived as more empathic and nonjudgmental? Do these more prospective discussions elicit greater cooperative problem solving? Research on conversation in the workplace is in its early stages [ 77 ], but some studies support the idea that high quality listening and partner responsiveness might reduce defensiveness, increase self-awareness, or produce greater willingness to consider new perspectives and ideas [ 78 , 79 ].

Practical implications

Our studies provide the first empirical evidence that managers can make feedback more effective by focusing it on the future. Future-focused feedback, as we define it, is characterized by prospective thinking and by collaboration in generating ideas, planning, and problem-solving. We assessed the degree of future focus by asking participants to rate the extent to which the feedback discussion focused on future behavior, the two parties spent time generating new ideas for next steps, and the conversation centered on how to make the recipient successful. This differs greatly from feedback research that distinguishes past vs. future orientation “using minimal rewording of each critique comment” (e.g., you didn’t always demonstrate awareness of… vs. you should aim to demonstrate more awareness of…) [ 80 p. 1866].

Because future-focused feedback is feedback, it also differs from both advice giving and “feedforward” (although it might be advantageous to incorporate these): It differs from Kluger and Nir’s feedforward interview, which queries how the conditions that enabled a person’s positive work experiences might be replicated in the future [ 81 ], and from Goldsmith’s feedforward exercise, which involves requesting and receiving suggestions for the future, without discussion or feedback [ 82 ].

The scenario at the very start of this article asks, “What can Chris say to get through to Taylor?” A future-focused answer might include the following: Chris first clarifies that the purpose of the feedback is to improve Taylor’s future performance, with the goal of furthering Taylor’s career. Chris applauds Taylor’s successes and is forthright and specific about Taylor’s shortcomings, while avoiding discussion of causes and explanations. Chris signals belief that Taylor has the motivation and competence to improve [ 83 ]. Chris then initiates a discussion in which they work together to develop ideas for how Taylor can achieve better outcomes in the future. (For a more detailed illustration of a future-focused conversation, see S11 Text .)

Conclusions

Our research supports the intriguing possibility that the future of feedback could be more effective and less aversive than its past. Performance management need not be tied to unearthing the determinants of past performance and holding people to account for past failures. Rather, performance may be managed most successfully by collaborating with the feedback recipient to generate next steps, to develop opportunities for interesting and worthwhile endeavors, and to enlarge the vision of what the recipient could accomplish. Most organizations and most managers want their workers to perform well. Most workers wish to succeed at their jobs. Everyone benefits when feedback discussions develop new ideas and solutions and when the recipients of feedback are motivated to make changes based on those. A future-focused approach to feedback holds great promise for motivating future performance improvement.

Supporting information

S1 analyses, s2 analyses, acknowledgments.

For helpful comments on earlier drafts of this paper, we are grateful to Pino Audia, Angelo Denisi, Nick Epley, Ayelet Fishbach, Brian Gibbs, Reid Hastie, Chris Hsee, Remus Ilies, David Nussbaum, Jay Russo, Paul Schoemaker, William Swann, and Kathleen Vohs.

Funding Statement

This research received funding from the Melbourne Business School while the first three authors were either visiting (JG, JK) or permanent (IOW) faculty there. While working on this research, the first two authors (JG, JK) also worked as owners and employees of management consulting firm Humanly Possible. Humanly Possible provided support in the form of salaries and profit-sharing compensation for authors JG and JK, but did not have any additional role in the study design, data collection and analysis, decision to publish, or preparation of the manuscript. The specific roles of these authors are articulated in the “author contributions” section.

Data Availability

• PLoS One. 2020; 15(6): e0234444.

Decision Letter 0

PONE-D-20-05644

The future of feedback:  Motivating performance improvement

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Reviewer #1: Yes

Reviewer #2: Yes

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Reviewer #1: 1. I enjoyed reading this manuscript, but it appears to be unnecessary long in parts and readability would benefit of a more concise style. I would recommend condensing some parts, for example in the methods section for study 2 was overly long and lacked clarity in parts. The description of the second questionnaire was a little confusing in terms of the consistency in how items were measured and the hypothesis was not clear.

2. In the ethics statement for Study 1 (line 184), please explain the rationale behind the waiver of consent.

3. Procedure (line 187) please give details of the survey platform used.

4. Results -Please include the number of participants in each group.

5. Please comment on what normality checks were performed to assess the distribution of the data.

6. Line 470, correlations are discussed but I can’t see a table to support these.

7. The discussion did not address the results in relation to previous literature and lacked a theoretical explanation of the findings (See for example ‘Korn CW, Rosenblau G, Rodriguez Buritica JM, Heekeren HR (2016) Performance Feedback Processing Is Positively Biased As Predicted by Attribution Theory. PLoS ONE 11(2)’ for a discussion of attributional style and self-serving bias. I recommend some rewrite of the discussion with more reference to theory.

8. Some acknowledgement of the effect of individual differences in self-regulation would be useful to include as this may influence how feedback is received in terms of attributions. See for example, ‘Donovan, JJ, Lorenzet, SJ, Dwight, SA, Schneider, D. The impact of goal progress and individual differences on self‐regulation in training. J Appl Soc Psychol. 2018; 48: 661– 674’.

9. The suggestions for improvement at the end of the study would be better to be condensed to give a brief suggestion of methods.

Reviewer #2: The paper reports an interesting and comprehensive work about a relevant issue in organizational psychology. Both the theoretical frame and the applied methodology are original and thorough, though the use of role-play raises some doubts about the robustness of the results (some concerns are raised by the authors themselves (lines 752-760) ). This is, in my opinion, the main limitation of studies 2 and 3. I would suggest that the authors insert a wider reasoning about the choice of using this method to collect their data and the pros and cons.

In the "General Discussion" paragraph the authors state that "We investigated the sources of agreement and disagreement between feedback provider and recipient" (lines 712-713). I strongly suggest that this sentence is being modified, since it doesn't describe the aim nor the results in Study 1 correctly.

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Reviewer #1: No

Reviewer #2: Yes: Federica Biassoni

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Author response to Decision Letter 0

12 May 2020

Please see uploaded document Response to Reviewers. Text copied here.

Response to Reviewers

We wish to thank the reviewers for their very helpful and constructive comments. We especially appreciate the clarity and specificity with which they framed their suggestions. Below we respond to each reviewer recommendation.

Reviewer #1:

1. I enjoyed reading this manuscript, but it appears to be unnecessary long in parts and readability would benefit of a more concise style. I would recommend condensing some parts, for example in the methods section for study 2 was overly long and lacked clarity in parts. The description of the second questionnaire was a little confusing in terms of the consistency in how items were measured and the hypothesis was not clear.

We revised the methods section for Study 2 (former lines 274-279; 285-414, revision lines 276-281; 299-402). The new version is a full page shorter and, in line with the reviewer’s suggestion, we believe this more concise version is now more readable. It includes a revised description of the post-discussion questionnaires (former 346-367; revision 350-361), clarifying the sequence and types of questions provided to each group. It also includes revisions, mainly in the Design section (former 387-414; revision lines 377-402) to clarify how the various measures related to our hypotheses.

Study 1 was approved by the Institutional Review Board at the University of Chicago, which waived the requirement for written consent as was its customary policy for studies judged to be minimal risk, involving only individual, anonymized survey responses. Their decision cited US Code 45 CFR 46.101(b). Citing the code in our manuscript seemed overly legalistic, but we have added the rest of the rationale to the ethics statement (former lines 184-185; revision 184-186).

We now identify the platform as Cogix ViewsFlash (revision line 188).

We have added the requested information for Study 1 (revision lines 214-215). Following up on the suggestion, we also made it easier to locate the corresponding information for Study 2 (revision lines 316-317).

The general consensus is that the analyses we use, i.e. ANOVA and linear regression, are generally quite robust with regard to moderate violations of normality with Ns on the order of ours (e.g., Blanca, Alarcón, Arnau, Bono, & Bendayan, Psichothema, 2017; Schmidt & Finana, Journal of Clinical Epidemiology, 2018; Ali & Sharma, Journal of Econometrics, 1996; Schmider, Ziegler Danay, Beyer, & Bühner, Methodology, 2010). Nevertheless, we used an arcsine transformation on the variables a priori most likely to suffer from systematic deviations, namely the attribution proportions. Most authors recommend checking for major deviations from normality by plotting model-predicted values against residuals and against the normal distribution (using P-P or Q-Q plots). We did that for our analyses (graphs attached), and found no troublesome deviations, with the possible exception of one variable of minor importance to our main results or theory, namely performance quality ratings for successes in Study 2. We note in the paper that that variable may suffer from ceiling effects (former 468-469, revision 456-457). We did not add a discussion of normality to the paper because of the increased length and complexity that would involve and because it’s seldom an issue of concern with data and analyses like ours. However, we could include the graphs we’ve attached here as supplemental material if you tell us you would like us to do so.

Thank you for alerting us to this inadvertent omission. We now include complete correlation tables for all the variables analyzed in each Study in the supplemental materials: S2 Table for Study 1 (revision lines 224-225) and S11 Tables for Studies 2 and 3 separately and combined (revision lines 458-459), with provider-recipient correlations identified by color shading. (S2 was formerly the dataset for Study 1, but now data from all three studies are contained in S17.)

To better address our results in relation to previous attribution literature and theory, we have revised former lines 723-740 in the General Discussion. Now we more clearly discuss our findings in relation to self-serving bias, self-threat, and both historical and more recent formulations of attribution theory, including the helpful reference the reviewer provided (revision lines 708-735). We have also added a brief discussion of how our results relate to previous literature on future thinking (revision lines 760-762). We attempted to minimize redundancy with the Introduction section. The new material includes several new references.

We added mention in the General Discussion of individual differences in self-regulation, citing two references, including the one helpfully provided by Reviewer #1 (revision line 776). Additionally, we reworded former lines 798-799 (revision lines 793-794) to make it clearer that we are acknowledging individual differences there as well.

We condensed former lines 828-846 from 19 lines to 8 lines (revision lines 823-830), referring the interested reader to new Supporting Information S16 Text for the expanded version. We trust this solution meets the recommendation for a brief suggestion of methods, while also satisfying the interests of those seeking more detail.

Reviewer #2:

1. The paper reports an interesting and comprehensive work about a relevant issue in organizational psychology. Both the theoretical frame and the applied methodology are original and thorough, though the use of role-play raises some doubts about the robustness of the results (some concerns are raised by the authors themselves (lines 752-760)). This is, in my opinion, the main limitation of studies 2 and 3. I would suggest that the authors insert a wider reasoning about the choice of using this method to collect their data and the pros and cons.

We now include a wider reasoning about our choice to use a role-play method and the pros and cons. The new version comprises revision lines 282-298. (We also revised the subsequent paragraph for increased clarity, given the insertion of the new paragraph about the role-play method.)

2. In the "General Discussion" paragraph the authors state that "We investigated the sources of agreement and disagreement between feedback provider and recipient" (lines 712-713). I strongly suggest that this sentence is being modified, since it doesn't describe the aim nor the results in Study 1 correctly.

Thank you for your careful reading. We have re-written that sentence to more accurately capture the results of Study 1 as well as the other two studies (revised lines 697-700).

[Figures attached--please see uploaded document Response to Reviewers.]

Submitted filename: Response to Reviewers.docx

Decision Letter 1

27 May 2020

The future of feedback: Survey and role-play investigations into causal attributions, feedback acceptance, motivation to improve, and the potential benefits of future focus for increasing feedback effectiveness in the workplace

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The future of feedback:  Motivating performance improvement through future-focused feedback 

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Performance Management

Performance Management’s Digital Shift

About the research.

Getting performance management (PM) right is critical to strategic execution in rapidly evolving business environments characterized by fast-moving markets, converging industries, increasing talent scarcity, growing dependence on contingent workers, and shifting labor preferences. But the pressure on PM is not simply a by-product of these trends: it is also an acknowledgment that next-generation performance management will be needed to deliver on digital transformation’s promise.

Performance management might be a late arrival to digital transformation, but as our research demonstrates, it is now poised to make radical use of new technologies. Technology-driven performance management already features apps for reading a team’s emotional engagement or predicting which high performers are preparing to leave an organization. For leaders, understanding and embracing the technology-based future of PM is essential to executing and leading digital transformation.

GUEST EDITOR

Michael Schrage

Research fellow, MIT Sloan Initiative on the Digital Economy

Insights on Performance Management

Analytics & business intelligence, rethinking performance management for post-pandemic success, talent management, does ai-flavored feedback require a human touch, organizational behavior, rebooting work for a digital era.

David Kiron and Barbara Spindel

Redefining Performance Management at DBS Bank

Collaboration, performance management for successful teams.

Jordan Birnbaum and Michael Schrage

Organizational Structure

Make it personal: lessons from ibm on reinventing performance management.

Diane Gherson et al.

8 Performance Management Best Practices Backed by Research

In this article, discover best practices for implementing a performance management system that drives success. Looking to evolve your organization's approach to performance management?

Take realistic steps to evolve your approach to employee performance

Table of Contents

What is performance management, top performance management trends.

8 Performance management best practices 

How technology supports your performance management strategy

Performance management. Every company needs to do it. But not every company is doing it well.

Traditionally, organizations have relied on clunky, cumbersome, and disengaging approaches to performance management . They’re working with disparate systems, low buy-in, and frustrated managers and employees. Without a strategic direction—and the right tools—your performance management strategy can lead to low adoption and, ultimately, underperformance.

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Employees crave fairness, transparency, and ongoing coaching and feedback. When leaders prioritize these things, employees feel connected to the rest of the organization and can do their best work. Our research shows what an engaging performance management approach looks like.

Performance management is the process leaders use to measure, develop, and motivate employee performance. The process should be ongoing to keep a constant pulse on individual, team, and company-wide performance. With continuous performance management , you can empower and engage employees to drive goals and objectives critical to business success. Here’s how:

Help managers address obstacles and opportunities as they come up

When managers keep a pulse on employee performance, they can tackle problems and get their teams back on track. They can also outline opportunities that align with each employee to capitalize on strengths and close skill gaps.

Make employees feel heard, valued, and recognized

Helping employees feel part of the process is the best way to ensure they feel heard, valued, and recognized. You don’t want employees to feel like performance management is happening to them. It should be a shared responsibility between employees and managers and an opportunity for growth and increased impact. Building a performance management approach that engages employees looks like:

• Continuous conversations around performance and development
• Real-time recognition when an employee’s work contributes to business success
• Setting goals together—and moving those targets as needed
• Exchanging regular feedback that helps employees (and managers) grow

When employees are active participants in their performance management journey, they feel a stronger sense of voice and influence, further reinforcing their dedication and motivation to excel.

Connect employees to organizational goals and purpose

Having clear and aligned goals alongside regular performance conversations help leaders outline the bigger picture. When employees understand how their daily initiatives make an impact, they feel more connected to their work and its purpose. When employees feel connected to a purpose, they’re more likely to make an impact. 

Support a healthy company culture

Your company culture is all about the way you get work done at your organization, and your approach to performance is a key part. When you coach employees in a way that motivates and engages them, with ongoing feedback, recognition, and goal alignment, you’ll foster a culture that employees can thrive in. 

According to our research on organizational culture , how an organization approaches performance management is a critical part of how employees feel culture within their organization.

Promote employee growth and development

A good performance management strategy helps employees grow to reach their full potential. Leaders can use performance management to address skills gaps, outline growth opportunities, and bolster employee strengths. It helps managers understand when an employee might be ready for a new project or role. It helps employees feel like the organization is invested in their development and career growth.

Shape strategic people decisions

When you understand the big picture behind employee performance , you can make decisions that empower employees across the company. An effective approach to performance will help you identify performance impact, growth potential, and retention risk. When you keep a pulse on these metrics, you can give your employees the tools they need to succeed.

Drive employee retention

Your approach to performance makes all the difference in the employee experience. And the employee experience is a key indicator of whether your employees decide to leave or not. Performance management can be used as an ongoing tool to strengthen employee retention and keep your key players.

‘Productivity’ has earned buzzword status recently. And with good reason. Numerous organizations, driven by productivity concerns, continue to rely on outdated data and assumptions for measuring employee performance. 

However, it is crucial to understand that there are effective and ineffective ways to enhance performance. To truly ignite employee impact, leaders need to prioritize the development of performance management strategy that fosters inspiration and motivation. In other words, organizational leaders need to shift their focus away from employee productivity and start inspiring employee impact. 

The data below is informed by over 1 million employee voices at more than 9,000 organizations across the United States.

Performance management greatly impacts employee engagement

The traditional aspects of performance management, like ratings, rankings, and pay-for-performance don’t engage employees. 

But performance management definitely has an impact on engagement. Quantum Workplace research shows that the top drivers of engagement—related to performance management—are recognition, fairness, alignment, feedback, and empowerment.

Leaders can use these drivers to design an approach to performance management that motivates performance, impact, and engagement.

1 in 2 employees want more recognition for their work

Despite the importance of employee recognition , 1 in 2 employees would like more recognition for their work. Only 37% receive recognition monthly or weekly. 

Overwhelmingly, at 71%, employees' most preferred recognition reason is for their performance or accomplishments in their role. By increasing the frequency of recognition, organizations can drive both performance and engagement. 

1 in 3 employees want weekly 1-on-1 conversations

One-on-one meetings between employees and managers are a fundamental pillar of effective performance management. Our research shows that 36% of employees express a desire for weekly one-on-one conversations with their manager.

This preference for frequent interaction underscores the value employees place on regular, meaningful engagement with their managers.

When employees are given the opportunity to engage in weekly 1-on-1 meetings, several benefits emerge. Most importantly, these meetings provide a stable platform for employees to discuss their priorities, align with personal and organizational goals, receive feedback, and gain clarity on job expectations. 

Let’s dive into some of these benefits using our research as a guide.

Continuous 1-on-1s are associated with elevated engagement levels

Your employees are more likely to be engaged when you meet with them often. In fact, over 71% of employees who have weekly performance conversations are highly engaged. And one trend is becoming remarkably clear: As the 1-on-1 meeting cadence decreases, so does employee engagement. Only 53% of employees are highly engaged when they meet annually with their manager.

As organizations mature their approach to employee performance, they should aim to increase the frequency of meaningful one-on-one meetings that focus on goal-setting, performance, development, engagement, feedback, and more.

Hybrid and remote workers prefer to have more frequent one-on-ones with their managers

Different work environments require different approaches to performance. In fact, hybrid and remote workers are more likely than their onsite counterparts to want weekly 1-on-1s. 43% of remote workers and 37% of hybrid employees prefer a weekly cadence, compared to 27% of onsite employees.

Half of employees want more feedback from their manager

Our research shows that 1 in 2 employees express wanting more feedback , and employees primarily want to receive that feedback directly from their manager. 

Employees who receive more frequent feedback are: 

• 2X more engaged
• 3X less likely to be applying or seeking other jobs
• 1.4X more likely to stay at the organization.

Frequent and collaborative goal setting is associated with higher employee engagement levels

When done well, goal setting can have an enormous positive impact on employee performance. In fact, goal setting has proved to be one of the most powerful management tools to improve performance in today’s workplace. 

Our research found that employees who have individual goals set are 2X more likely to be engaged at work. Goal setting and revision frequency appears to be directly related to employee engagement. As collaboration and frequency decreases, employee engagement levels follow suit.

Redefining employee growth and development

One of the most notable performance management trends is the redefinition of career growth and development. 

Of course, most organizations understand the importance of providing career growth and development opportunities for their employees to help boost skills, drive engagement, and retain top talent. 

But in order to design an effective development strategy, employers must first understand what ‘growth and development’ means to their employee base.

Our research shows that:

• 42% of employees define career growth as a promotion or advancement 
• 33% say it’s education and training 
• 21% say it’s a role change or expansion

In other words: employees want different things when it comes to their own career growth. It’s more important than ever for managers to individualize employee development using the data they gather from those more frequent one-on-one meetings we discussed earlier in this article. 

8 Performance management best practices  

The performance management research above can help leaders across all industries create an engaging approach to performance. Keep these performance management best practices in mind when shaping your strategy.

1. Conduct continuous performance management conversations

The annual performance review doesn’t align with employee expectations around performance conversations. It’s not useful for facilitating the coaching and feedback needed to maximize alignment and impact throughout the year. 

Employees want to have frequent one-on-ones with their manager. 

When one-on-ones happen frequently, teams are more likely to be aligned, efficient, and engaged. While weekly one-on-ones are preferable, ensure you’re holding these conversations at least monthly. With a high meeting frequency, managers and employees can address challenges, questions, and concerns as they come up. 

Not to mention, more frequent one-on-ones enable your managers to tailor employee growth and development to the unique needs of individual employees.

2. Prioritize collaborative goal setting

When managers and employees set goals collaboratively—and frequently—employee engagement increases. 

To maximize employee impact and engagement, managers should help align team and individual goals with organizational goals. This helps employees visualize how their work contributes to the larger organization’s success. Outline why each goal is set and how it contributes to business outcomes. 

When employees understand why their efforts are important, they’re much more likely to give their full effort day-in and day-out.

3. Recognize great work

Employee recognition is associated with strong employee engagement levels. That’s why leaders should always provide recognition for employee contributions. Acknowledge employees when they achieve goals, showcase increased effort, and practice valued behaviors. Not only will your employees' engagement levels increase, but they’ll have the motivation needed to continue their efforts in the future.

4. Give regular performance feedback

Employees need feedback that helps them improve. Employees are likely to be engaged when they receive effective feedback from their managers. That’s because helpful feedback fosters a culture of trust and supports employee growth. Ensure your feedback outlines tools and strategies for employees to improve. 

Feedback doesn’t always have to be constructive or regulated to a form. 1 in 2 employees want more recognition for their work. And while managers play an important role in giving recognition, organizations should also ensure that managers are recognized frequently for their efforts as well. Encourage employees to request input from peers and managers—asking for both constructive and positive feedback.

5. Evaluate performance fairly

Research shows that fair performance evaluations are a top driver of engagement. That’s why leaders should prioritize honest, inclusive, and ongoing feedback. Don’t save all your feedback for a once-a-year performance review. Instead, align, assess, and adjust regularly throughout the year. Ensure you communicate the “why” behind each evaluation and give employees the opportunity to voice their opinions too.

6. Create a unique growth and development strategy to maximize performance

Employee growth and development is not a one-size-fits-all initiative. Our research indicates that ‘growth and development’ means very different things to employees. Focus a good chunk of your one-on-one meetings on what growth and development within the organization looks like for each employee. These discussions can help shed light on what each employee wants and how their needs evolve over time.

7. Bring employees into the performance process

If your employees feel like performance management is something that’s happening to them instead of something they’re actively contributing to, you have a big problem. Bringing your employees more actively into the performance process is one way to boost impact across the organization. 

One of the most effective ways to do this is to leverage employee surveys to gather feedback on your current performance practices. And then use this feedback to continuously improve your performance management process using employee insight—not the assumptions of your leadership team.

8. Make performance management easy for everyone

Performance management shouldn’t be hard to build, adopt, and navigate. And that starts by having the right performance management tools. Cumbersome processes and disparate technology (or NO technology) can throw a wrench in your plan and make it more difficult for both employees and management to participate. 

There are several ways the right technology solution can help to support and scale your performance management strategy.

Less than one-fifth of HR leaders believe their approach to performance management is effective right now, and 81 percent of leaders are changing their performance management system . A large shift is happening, and the best leaders leverage tech to navigate it. Here’s how performance management tools can help you:

Consider these performance management trends and best practices when shaping your approach. By coaching performance with employee engagement in mind, you’ll help employees reach their full potential and drive consistent business outcomes

Is performance management a priority for your organization this year? Learn more about how Quantum Workplace can help you make performance management easier. Get a demo today!

Published July 20, 2023 | Written By Kristin Ryba

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Performance Management System. A Literature Review

• First Online: 01 January 2013

Cite this chapter

• Chiara Demartini 2  

Part of the book series: Contributions to Management Science ((MANAGEMENT SC.))

4985 Accesses

2 Citations

This Chapter proposes a broad systematic review of PMS design, describing the evolution of the approaches to PMS design, based on the application of theories; introducing both concepts and frameworks that characterise the field and clearly call out for more research on a comprehensive PMS framework; and showing how PMS mechanisms should relate to each other in order to develop both efficiency and innovation, which result in long-term survival. From the review on PMS design, we can argue that effective design of PMS design is contingent to both external and internal variables; financial performance measures are more and more assessed together with non-financial performance measures; the link between PMS and strategy should be enacted trough different kind of PM mechanisms; PMS is a dynamic package of PM mechanisms, which should be considered as a whole in order to assess the overall effectiveness. Finally, since the analysis of the effect of single mechanisms on the overall effectiveness is partial and problematic, there is a call for more loosely coupled PMSs, which develop both control and flexibility.

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The transition from measurement to management of performance has been called the second wave of knowledge management, since in the first wave “knowledge management – in particular in Nonaka’s view – concerns the single individual’s personal tacit knowledge and the subsequent problem of distributing such knowledge to other individuals in the organisation”, while in the second wave “knowledge management is about management control where managers combine, apply and develop a corporate body of knowledge resources to produce and use value around the company’s services” (Mouritsen and Larsen 2005 : 388).

Anne Huff defined the systematic literature review as the “explicit procedures to identify, select, and critically appraise research relevant to a clearly formulated question” (Huff 2009 : 148).

Although the review is focused on ‘performance management’ and ‘performance management system’, the search terms included other concepts, which are closely related to the main research question.

The sophistication of the management accounting systems has been defined as the “capability of an MAS to provide a broad spectrum of information relevant for planning, controlling, and decision-making all in the aim of creating or enhancing value” (Abdel-Kader and Luther 2008 : 3).

Previous studies on leadership style analysed the effect of this variable on budgetary participation, and the results were statistically significant (Brownell 1983 ).

Tolerance for ambiguity measures “the extent to which one feels threatened by ambiguity or ambiguous situations” (Chong 1998 : 332).

TCE develops the idea that controlling complex economic transactions by “hard contracting” is expensive and an optimal choice between firm and market governance should be taken according to asset specificity. “If assets are non-specific, markets enjoy advantages in both production cost and governance cost respects […]. As assets become more specific, however, the aggregation benefits of markets […] are reduced and exchange takes on a progressively stronger bilateral character” (Williamson 1981 : 558).

Even though the first framework developed four perspectives (financial, internal business, customer, and innovation and improvement), Kaplan and Norton specified that each firm, or unit, using the BSC should adjust the number and focus of perspectives and their measures to the specific case under analysis. Therefore, the number of perspectives can be higher than four and the perspectives caption can be changed according to the strategic issues that the firm has to monitor in order to be successful.

Together with the BSC, other performance measurement systems based on both financial and non-financial performance measures have been developed, such as the Results and Determinants (Fitzgerald et al. 1991 ), the Performance Pyramid (Lynch and Cross 1995 ), and the PISCI (Azofra et al. 2003 ).

According to Kim and Oh, the performance measures related to R&D departments should be based on behavioural and qualitative measures, such as “leadership and mentoring for younger researchers”, and appraised by a “bottom up (e.g., R&D researchers’ evaluation of their own bosses say, R&D managers) as well as horizontal (e.g., peers and/or colleagues)” evaluation scheme (Kim and Oh 2002 : 19).

Simons described the old management control philosophy as a “command-and-control” one, in which strategy setting follows a top-down direction, a lot of emphasis is put on standardization and efficiency, results are compared to and should be aligned to plan, and much effort is devoted to keeping things on track and minimizing the number of “surprises”. On the other hand, he pointed out that the new management control philosophy is more concerned with “creativity […], new organizational forms, […] the importance of knowledge as a competitive asset”, which has resulted in “market-driven strategy, customization, continuous improvement, meeting customer needs, and empowerment” (Simons 1995 : 3).

Mission statement, vision and corporate credo are all examples of “organizational definitions”.

However, Simons also warned about setting boundaries that could inhibit adaptive change and survival ( 1995 : 55–53).

Benefits from managerial creativity relate to all the new alternatives and solutions that managers can invent in trying to either create value for the organization or solve problems (Christenson 1983 ; Nelson and Winter 1982 ), while dysfunctionalities refer to research activities that are either too risky or too vague, and thus not value creating.

Argyris and Schon also called the intended strategy an “espoused theory” in contrast to “theory-in-use” (Argyris and Schon 1978 : 10–11).

Simons argued that critical performance variables are “those factors that must be achieved or implemented successfully for the intended strategy of the business to succeed” (p. 63); they can be identified through effectiveness and efficiency criteria (Anthony 1965 ). He also agreed with Lawler and Rhode ( 1976 ) that critical performance variables should be related to objective, rather than subjective measures; complete, instead of incomplete; and responsive, rather than unresponsive, measures. Simons also posited that all the three features rarely occur in diagnostic control systems (Simons 1995 : 76).

Simons asserted that in “normal competitive conditions, senior managers with a clear sense of strategic vision choose very few – usually only one – management control system at any point in time” (Simons 1991 ). The reasons for this limited choice are related to both economic and cognitive, as well as strategic issues. Since the interactive use of control systems require managerial attention, managers will be distracted by other day-to-day operations, which can be handled only for one system at a time. From a cognitive perspective, individuals can cope and make decisions simultaneously only with a limited amount of information; otherwise they will be overwhelmed by data. From a strategic standpoint, “the primary reason for using a control system interactively is to activate learning and experimentation” (Simons 1995 : 116); therefore it is better to avoid poor analysis, or decision paralysis coming from too many projects under analysis.

Nonetheless, Collier acknowledges the implementation of the beliefs system lever of control (Collier 2005 ).

She also stressed that investigating “how differences in interpretation of strategic contingencies shape management control systems would enrich Simons’ model” (Gray 1990 : 146).

The portfolio of management control mechanisms is made up of “standard operating procedures, position descriptions, personal supervision, budgets, performance measurement, reward systems and internal governance, and accountability arrangements [as well as …] less obtrusive forms of control, such as personnel selection, training and socialization processes” (Abernethy and Chua 1996 : 573).

An example of such frameworks is the value based management tool introduced by Ittner and Larcker ( 2001 ).

Mission has been defined as the “overriding purpose of the organization in line with the values or expectations of stakeholders”, while the vision develops the “desired future state: the aspiration of the organization” (Johnson et al. 2005 : 13).

In their work, Malmi and Brown specified that, although their framework represents a broad typology, it is also a parsimonious one, since it encompasses only five types of control (Malmi and Brown 2008 : 291).

Merchant and Van der Stede’s framework develops different forms of control according to the different objects under control, which are culture, personnel, action and results controls (Merchant and Van der Stede 2007 ).

Nonetheless, the authors acknowledged that culture may sometimes be beyond managerial control.

On the issue of a tentative framework, the authors call for “further research [that] should reveal the missing and unnecessary elements in it” (Malmi and Brown 2008 : 295).

Although budgets can cover a shorter, or longer period, it is usually based on a 12-month period.

Giorgio Brunetti stressed that both purposes should be accomplished by the management control system, although one of the two may be “stressed” (Brunetti 1979 : 69) a little bit further, indeed, he argued that a control system, which is uncoupled from the rewarding system, results in an amount of information aimed at sustaining, rather that coordinating, operations (p. 70).

In line with the contingency approach, the effective design, according to Brunetti, lies in the “congruency”, or “fit” of management control system’s variables with both management control system’s inputs and outputs (Brunetti 1979 : 98).

Other limitations to the cybernetic approach to the design of management control system can be found elsewhere in this work (§ 2.3).

To Mella, a system of transformation is an “‘entity’ able to transform certain ‘objects’ that enter the system into different ‘objects’ which leave the system” (Mella 1992 : 456).

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Demartini, C. (2014). Performance Management System. A Literature Review. In: Performance Management Systems. Contributions to Management Science. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-36684-0_3

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Performance Management

Using real-world examples and best practises, uncover what performance management is and why it is important.

Ivan Andreev

Demand Generation & Capture Strategist, Valamis

March 14, 2022 · updated July 31, 2024

17 minute read

Increasingly, organizations are understanding that their management systems must be brought into the 21st century if they are going to be competitive in the current market.

Research shows that previous systems, such as yearly appraisals, are outdated and can even serve to decrease employee engagement and motivation. In light of this, more companies are turning to performance management than ever before.

This dynamic and strategic approach to developing improved performance in employees is gaining ground in companies large and small, including many Fortune 500 and industry-leading organizations.

What is performance management?

The importance of performance management, the purpose and goals of performance management, the benefits of performance management, 15 employee performance management best practices, 5 real-world examples of performance management, what is the difference between performance management and performance appraisals.

Performance management is a strategic approach to creating and sustaining improved performance in employees, leading to an increase in the effectiveness of companies.

By focusing on the development of employees and the alignment of company goals with team and individual goals, managers can create a work environment that enables both employees and companies to thrive.

Based on the definition of performance management, a system is built within an organization to measure and improve the performance of the people in that organization.

In practice, performance management means that management is consistently working to develop their employees, establish clear goals, and offer consistent feedback throughout the year.

In contrast to other systems of reviewing employee performance, such as yearly performance appraisals , employee performance management is a much more dynamic and involved process with better outcomes.

For the Human Resources department, performance management is an important system for onboarding , developing and retaining employees, as well as reviewing their performance.

It is increasingly understood that a yearly performance appraisal system does not effectively engage employees, fails to consistently set and meet company objectives, and does not result in a strong understanding of employee performance.

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Why is performance management important?

In any organization, no matter the size, it is important to understand what your employees are doing, how they are doing it, and why they are doing it.

Without a system in place to define roles, understand individual strengths and weaknesses, provide constructive feedback , trigger interventions and reward positive behavior, it is much more difficult for managers to effectively lead their employees.

Smart organizations pair their performance management with an incentive management process. The two systems have a lot in common, from defining roles and setting goals to reviewing and rewarding employee behavior, and as such, do very well when run simultaneously. Using incentive management also means that the all-important ‘reward’ step of performance management is done properly.

Talent management is an important part of every organization. Three of the main problems that organizations face are:

• keeping employees engaged
• retaining talent
• developing leaders from within

These are the issues that performance management very effectively targets.

1. Keeping employees engaged

Engagement of employees is a focus of any management team. In a yearly appraisal system, goals would be given at the beginning of the year and then revisited 12 months later to see if they had been met. This long stretch of time without feedback or check-in is an almost certain engagement killer.

In fact, 94% of employees would prefer their manager gives them feedback and development opportunities in real-time, and 81% would prefer at least quarterly check-ins with their manager, according to the Growth Divide Study .

Studies show that employees do best with feedback on a monthly or quarterly basis, with regular check-ins serving as a zone to problem solve, adjust goals as necessary, and to refresh their focus on the goal. In fact, companies where employees meet to review goals quarterly or more frequently are almost 50% more likely to have above-average financial performance.

When surveyed, employees had some negative feelings about a yearly appraisal system:

• 62% of employees feel that their performance review was incomplete
• 48% did not feel comfortable raising issues with their manager in between performance reviews
• 61% feel that the process is outdated
• 74% feel that they would be more effective with more frequent feedback
• 68% of executives don’t learn about employee concerns until the performance review

All of this adds up to a lot of missed opportunities to solve problems and increase employee performance and engagement.

As employee engagement rises, nine key performance indicators show successful outcomes. Absenteeism, turnover, shrinkage, safety incidents, patient safety incidents and defects in quality are lessened by at least 25%, and often more, across the board. Customer experience, productivity and profitability all show positive outcomes.

This study, by Gallup , was conducted across a broad range of industries, showing that employee engagement is a critical factor, no matter the industry.

2. Retaining talent

Employees who have frequent meetings with management to discuss performance, solve problems and receive training are more likely to stay with the company.

If employees see that their management team is putting in the work to develop them professionally, help them succeed with their goals, and reward performance on a consistent basis, then they are more incentivized to both stay with the company and work harder.

3. Developing leaders from within

This consistent development and partnership between managers and employees allow for the development of leaders from within the company.

Recruiting costs can be extremely high, as are costs for onboarding and training new employees. To be able to groom leaders from within the company means that there is already a proven culture fit with this individual and that training costs and resources spent developing this person into an asset are not lost.

This leadership path also serves as a motivating force for employees, who can see that their hard work will be rewarded with promotions and other benefits.

Performance management also creates a need for management to consistently focus on company objectives and goals, and to consider how best to achieve them. This continual revisiting of goals means that they are more likely to stay relevant, as goals will be adjusted in light of new technology, changes in the market, or other factors throughout the year.

According to Forbes , ‘companies that set performance goals quarterly generate 31% greater returns from their performance process than those who do it annually, and those who do it monthly get even better results.’

The purpose of performance management is to give both managers and employees a clear and consistent system within which to work that, in turn, will lead to increased productivity.

• This system shows employees the pathway to success, allows for the measuring of performance coupled with feedback and offers training and development opportunities.
• Performance management allows management to understand what their employees are doing and track progress on company objectives while providing consistent feedback.

There are five main objectives of performance management:

• Develop clear role definitions, expectations and goals
• Increase employee engagement
• Develop managerial leadership and coaching skills
• Boost productivity through improved performance
• Develop a performance reward program that incentivizes accomplishment

These performance management goals show a clear path from the developing of goals to the rewarding of increased accomplishment. If one of these performance management objectives is not done well, then the others will suffer as a result.

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Performance management has a multitude of benefits for employees and managers, as well as for the company as a whole. If a company can successfully create an environment of engagement where customers are equally engaged by employees on the front line, their outcome is even better.

When organizations successfully engage their customers and their employees, they experience a 240% boost in performance-related business outcomes compared with an organization with neither engaged employees nor engaged customers. – Gallup

• Having well-defined roles and performance standards makes hiring an easier process, as candidates know what is expected of them, and HR can more easily understand if a candidate is a right fit for the role.
• Those well-defined roles and standards make training easier, as trainers know exactly which areas need to be covered, and which information is nonessential.
• Consistent developing and revisiting of goals ensure that the organization keeps up with changing market forces easily, and reacts quickly as a whole, regardless of the size of the organization.
• Clear expectations and roles set employees up for achieving goals from the start, providing a springboard to success.
• Employees who feel that their company is invested in their success stay with their companies, increasing employee retention.
• Consistent feedback and coaching from managers lead directly to increased engagement from employees while developing the ability to provide good coaching and feedback leads to more skilled managers.
• As employees become more skilled, they can move up through the company, creating a leadership pipeline.
• Productivity will increase thanks to increased engagement, clear goals and upskilling of employees.
• Employees remain incentivized to perform long-term, as they are properly rewarded for their hard work.

While performance management can sound deceptively simple, with just four steps as outlined above, the process itself is very complicated. That’s why we have put together this list of best practices for performance management.

Think of it like the essentials of performance management – these will help make sure that your employee performance management system is performing the way it should.

1. Identify the goals of your performance management initiatives

As you are creating your performance management program, you need to understand what you want to accomplish.

Asking the following questions can help you:

• Is increased productivity a priority?
• Does your organization want to identify leaders from within and develop them?
• Do you want to streamline the compensation process?
• Are you seeking to improve employee retention or engagement?

If you know what you want your program to do, it will be easier to build it to accomplish that goal.

2. Define and describe each role

We mentioned this above, but it bears repeating. It is much harder for an employee to be successful if they don’t know exactly what is expected from them, how they should do it, and what the end result should look like.

3. Pair goals with a performance plan

As you set goals, develop a performance plan to go alongside. Year-long goals often fail, as they are too large and employees can get overwhelmed before they start. A performance plan helps them visualize their path, making it much more likely that they will meet their goal.

4. Monitor progress towards performance targets

Review key areas of performance. Use metrics and analytics to your advantage, tracking how goals are progressing to make sure that interventions can happen early, if necessary.

5. Coaching should be frequent

The point of coaching is to help identify and solve problems before they get too big. If it’s not frequent, it’s not going to help at all. Monthly or quarterly meetings should be held to help keep employees on the right track.

6. Use guidelines to your advantage

Guidelines should be created for each role as part of the first stage of the performance management cycle. These policies or guidelines should stipulate specific areas for, or limits on, opportunity, search and experimentation. Employees do their jobs better when they have solid guidelines to follow.

7. Build a performance-aligned culture

Make sure your workplace has shared values and cultural alignment. A sense of shared values, beliefs and expectations among employees creates a more harmonious and pleasant workplace. Employees should be committed to the values and objectives outlined, and exemplified by, top management.

8. Organize cross-functional workshops

This helps employees – and managers – understand what other departments do, how they think and what their strengths and weaknesses are. They can discover something new and find new connections, which can help them in future work.

9. Management should offer actionable feedback

During these coaching meetings, tensions can arise if the feedback is not given in a constructive, actionable manner. It is not very important to look backward and point fingers, rather management should guide employees towards future success.

10. Keep it professional, not personal

Giving less-than-stellar feedback is hard on both managers and employees, it’s one of the reasons that performance appraisals tend to be a least-liked task. Managers should make sure to keep feedback professional and remember to focus on behavior, rather than characteristics.

For example, pointing out that David regularly turned in important reports late is feedback about a behavior. Saying that David is lazy, and that’s why the reports were often late is feedback about a characteristic. One of these can help an employee own their role in a project’s success (or lack thereof) and the other will make them defensive instantly.

11. It’s not only employees that need training

Management should be trained too. Coaching and offering good feedback are not easy jobs, which is why there are so many specialist coaches out there. For managers to be able to lead well, they should be trained in these skill sets.

12. Take advantage of multiple-source feedback

Ask employees to write feedback for each other. This will give management a more holistic view on employee performance, understand the challenges that teams are facing, and be able to better offer feedback.

13. Don’t depend only on reviews

While the review process is important, it is only one part of the system as a whole. Planning, coaching, and rewarding employees are equally key parts of the system.

14. Problems are not always employee-based

It can be easy to assume that problems are always caused by employees, but that simply is not the case. Problems can arise from external factors such as availability of supplies, internal processes that are causing issues, or organizational policies. Seek out the source of problems as precisely as you can in order to fix them.

15. Recognize and reward performance publicly and frequently

Management cannot expect employees to stay motivated if they are never rewarded, yet many companies overlook this key step. Make sure that employees are compensated and recognized for their hard work, and they will continue delivering for your organization.

Of course, it’s one thing to understand the theory of what performance management is, but it’s another thing to use it in a real company. Let’s take a look at some real-world examples of the performance management process in action:

It’s no surprise that Google would show up on a list of companies that use a newer, innovative system of management. This company has always been a trendsetter, and their performance management process is one that relies on data and analysis, as well as making sure that their managers are well trained.

When assessing their performance management system, Google launched a project dedicated to assessing their managers, which has led to a thorough training and future development process that sets managers, and thus employees, up for success.

They also use a system of setting goals that have caught on across multiple industries. Using their Objectives and Key Results (OKRs) system, they reframe the goal-setting process, with great results.

Another tech trendsetter, Facebook has a performance management process that puts a heavy emphasis on peer-to-peer feedback. In semi-annual reviews, they are able to use that feedback to see how well teams are performing and understand where collaboration is happening – and where it is not. They also have developed an internal software to provide continuous, real-time feedback. This helps employees solve issues before they become problems.

Cargill is a Minnesota-based food-producer and distributor with over 150,000 employees and serves to demonstrate that even huge companies can ditch unwieldy performance appraisals and institute a new system. In following the latest research on the dissatisfaction of management with outdated performance management process, Cargill created their ‘Everyday Performance Management’ system. The system is designed to be continuous, centered around a positive employee-manager relationship, with daily activity and feedback being incorporated into conversations that solve problems rather than rehash past actions.

The Everyday Performance Management system had overwhelmingly positive results, with 69% of employees stating that they received feedback that was useful for their professional development, and 70% reporting that they felt valued as a result of the continuous performance discussions with their manager.

Adobe calculated that managers were spending about 80,000 hours a year on performance reviews, only to have employees report that they left those reviews demoralized and turnover was increasing as a result.

Seeing a system that only produced negatives, Adobe’s leadership team made a bold leap into a performance management system that began by training managers how to perform more frequent check-ins and offer actionable guidance, then the company gave managers the leeway they needed to effectively lead.

Management was given much more freedom in how they structured their check-ins and employee review sessions, as well as more discretion in salaries and promotions. Employees are often contacted for ‘pulse surveys’ – a way for the leadership team to make sure that individual managers are leading their teams well. One of the many positive results of this has been a 30% cut involuntary turnover due to a frequent check-in program.

Accenture is a massive company – over 330,000 people, so changing their systems means a huge effort. When they switched to their new system, they got rid of about 90% of the previous process. Now, they are using a more fluid performance management process where employees receive ongoing, timely feedback from management. This has been paired with a renewed focus on immediate employee development and an internal app for communicating feedback.

There are common threads in all of these examples. Each company has built a system that works for them, rather than following a one-size-fits-all approach. What works for one company might not work for another – it depends on the industry, the speed and flexibility of the company, and the overall goal of the system itself.

With similar names and purposes that sometimes align, it is no surprise that some people find it hard to spot the difference between performance management and performance appraisals.

In fact, performance appraisals are often part of the performance management process , although some companies still rely on performance appraisals alone.

An easy way to understand the difference between the two is that performance appraisals are reactive, and performance management is proactive.

A performance appraisal looks at all of the past actions of the employee within a set amount of time , and rates how well they performed in their role and how many goals they met.

Performance management looks at the present and future of the employee, and what can be done to help future performance and meet future goals . Performance management is focused on the development and training of an employee, and how that can benefit both the employee and the company.

A performance appraisal is a formal, operational task, done according to rigid parameters and in a quantitative manner. HR leads performance appraisals, with input from management. Performance management is much more informal and strategic, led by management with input from the employees in a more flexible manner.

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In the spotlight: Performance management that puts people first

In volatile times, companies are under outsize pressure to respond to economic, technological, and social changes. Effective performance management systems can be a powerful part of this response. They’re designed to help people get better in their work, and they offer clarity in career development and professional performance. And then there’s the big picture: companies that focus on their people’s performance are 4.2 times more likely to outperform their peers, realizing an average 30 percent higher revenue growth and experiencing attrition five percentage points lower (see sidebar, “About the research”). Companies that focus on their people and organizational health also reap dividends in culture, collaboration, and innovation—as well as sustained competitive performance. 1 Alex Camp, Arne Gast, Drew Goldstein, and Brooke Weddle, “ Organizational health is (still) the key to long-term performance ,” McKinsey, February 12, 2024.

Today, company leaders lack full confidence in most performance management systems—despite these systems’ importance and value—citing fragmentation, the existence of informal or “shadow” systems, misalignment, and inconsistency as common challenges. What sort of systems fit the company’s needs? Should rewards focus on individual or team goals? Where are limited resources best spent?

About the research

The insights in this article draw from a comprehensive review of industry best practices, including the experiences of more than 30 global companies across sectors, as well as research by the McKinsey Global Institute (MGI) into how companies gain a competitive edge and deliver top-tier financial results. Specifically, MGI studied more than 1,800 companies with revenues of greater than $100 million. 1 Performance through people: Transforming human capital into competitive advantage ; MGI, February 2, 2023. The article’s author team also completed a study of more than 50 companies’ performance management practices, aiming to provide a nuanced understanding of how organizations approach and execute performance management.

An understanding of the four basic elements of performance management—goal setting, performance reviews, ongoing development, and rewards—provides a foundation for answering these questions and more. Of course, the right performance management system will vary by organization. Leaders who embrace a fit-for-purpose design built on a proven set of core innovations can build motivational and meritocratic companies that attract and retain outstanding employees.

How leading companies approach performance management

Our research across a set of global companies found that despite widespread agreement about certain performance management best practices—such as offering regular feedback outside of an annual review—many companies remain stuck in old ways of working. There are many design choices that can determine the characteristics of a performance management system, but some are more critical than others (Exhibit 1). These decisions—and how they interact with each other—will help determine how the performance management system maps onto the company’s overarching strategy.

Goal setting

Two critical design decisions relate to goal setting: the number of performance management systems used and whether to prioritize individual or team performance goals.

Degree of differentiation. The simplest and best option for many organizations is a single performance management system to address the needs of all employees. However, in more-complex companies with several employee groups, more than one system might be necessary. Manufacturing companies, for instance, may employ three performance management systems with few commonalities: one for sales, in which sales agents are provided direct incentives for the number of goods sold; one for production, with a monthly rhythm focusing on improving core production KPIs; and one for executives, in which the focus might be related more to annual objectives and leadership behavior.

Considerations for these choices often revolve around the nature of the work and the ease of quantifying outputs. For roles in which performance can be easily measured through tangible metrics, such as sales and production, a system emphasizing quantifiable outcomes may be more suitable. On the other hand, for roles involving tasks that are less easily measured, such as those in R&D, a performance management system should be designed to accommodate the nuanced and less tangible aspects of their contributions.

The nucleus of performance. Many organizations have traditionally placed a strong emphasis on individual performance, rooted in the belief that individual accountability drives results. In recent years, there has been a noticeable shift toward recognizing the importance of the team in achieving overall organizational success.

At a large European online retailer, for instance, the focus of performance management has been put on the team rather than the individual. Goals are set for the team, feedback is given to the team, and the performance appraisal is conducted for the team. Example performance metrics for teams can include project completion timelines, cross-functional collaboration success, and the achievement of collective milestones. On an individual level, the company assesses performance using a sophisticated model that prescribes skills and behaviors for 14 job families, each with up to four hierarchies.

Another prominent company in the automotive industry underscores the team as the cornerstone of performance. The teams could be defined along both functional and organizational lines—such as the division or the business line—and the company linked the organizational lines’ performance to the individuals’ compensation.

Performance reviews

Performance reviews raise the question of how to balance the individual objectives and their appraisal with respect to the “what” and the “how,” as well as whether review responsibility should lie primarily with managers, committees, or a combination of both.

Performance formula: What versus how. The balance between setting objectives and assessing what employees accomplish and how they go about their work is the central focus here. To measure the “what,” reviews have traditionally used KPIs, concentrating on quantifiable metrics and specific targets and emphasizing measurable outcomes and achievements. 2 For more on metrics best practices and how they can help leaders avoid pitfalls in their performance management systems, see Raffaele Carpi, John Douglas, and Frédéric Gascon, “ Performance management: Why keeping score is so important, and so hard ,” McKinsey, October 4, 2017.

However, for many roles and in many segments of the company, the work is complex, multifaceted, and fast-paced and can be difficult to capture with rather static KPIs. Consequently, many companies have reverted to using objective key results (OKRs) to link results to defined objectives. The objectives represent the qualitative, aspirational goals an individual or team aims to achieve, while the key results are the quantifiable metrics used to measure progress toward those objectives. The objectives provide context and direction, capturing the broader strategic intent behind the measurable key results.

Companies that explicitly focus a portion of performance reviews on the “how” consider qualities such as collaboration, communication, adaptability, and ethical decision making. Considering behavior and conduct, in particular, can help assess leaders whose teams’ outcomes are hard to measure—such as long-term projects, complex initiatives, or qualitative improvements that may not have easily quantifiable metrics. About three in five companies in our sample look at a mix of both what and how, which can equip managers with a more comprehensive understanding of not only tangible results but also the underlying approach and mindset that contributed to those outcomes.

Review responsibility. In structuring accountability for conducting performance reviews, companies tend to lean on managers, committees, or a combination of both.

Managers should play a central role, and their discretion should be a significant factor in performance assessments because they can judge the context in which an employee has been working. For example, when evaluating performance, it’s crucial to consider the headwinds and tailwinds that the business, team, or employee faced during the evaluation period. External factors, market conditions, and organizational dynamics can significantly affect an employee’s ability to achieve their goals, and considering them helps provide a fair and contextual assessment.

In this context, another design question emerges: whether to appraise employees against OKR fulfilment or the effort they put into achieving the desired outcome. Particularly in many large digital players, OKRs are set as “moonshot” goals—objectives so ambitious they are difficult to achieve. Managers can help ensure that, at the end of the performance cycle, an employee is assessed against not only OKR fulfillment but also—and to an even greater degree—how hard they tried given the resources available to them.

Managers’ points of view, formed with knowledge of the circumstances that produced employees’ performance, produce richer assessments that are sensitive to context—given that managers work closely with their team members and have firsthand knowledge of the challenges, workloads, and specific situations that each employee encounters.

Committees, meanwhile, bring diverse perspectives and can mitigate biases that might arise from individual managers’ subjectivity. Committees can provide a checks-and-balances system, promoting consistency and standardization in the evaluation process.

A combination of these two approaches can be an effective solution. Senior managers and high performers across hierarchies could be discussed in committees, while the rest of the workforce could be evaluated by their direct managers. This integrated approach leverages the contextual insights of managers while also incorporating the diverse viewpoints and standardization that committees offer, particularly for more-senior or high-impact roles.

Regardless of the review responsibility structure, it’s worth noting that more and more managers, committees, and employees are using generative AI (gen AI) to aggregate and extract information to inform performance reviews. For example, some employees may toil to define clear, specific, and measurable goals that align with their career aspirations; gen AI can help create a first draft and iterate based on their role, helping the employee focus on their specific growth areas as well as gauge improvement on an ongoing basis. Managers and committees, meanwhile, used to spend a lot of time gathering performance metrics from different sources and systems for employee evaluation. Gen AI can aggregate input from various sources into a consolidated format to provide managers with a more comprehensive starting point for reviews.

Beyond employees’ formal professional-development opportunities, their managers’ capability to set goals, appraise performance fairly and motivationally, and provide feedback is one of the most critical success factors for an effective performance management system. As a result, many companies have pivoted to invest in focused capability building.

Ongoing development

Another key aspect to consider when designing a performance management system is the focus of the assessment: will it evaluate past performances, or will the emphasis be placed on creating an understanding and foundation for further growth?

A backward-looking assessment will focus on fulfillment of the what and how objectives to create a fair basis for ranking and related consequences. However, many companies are pivoting to complement this assessment or are even focusing entirely on a developmental appraisal. In this approach, the focus is on truly understanding the strengths and weaknesses of the individual as a basis for further development, capability building, and personal growth.

Against that backdrop, rather than concentrating solely on top performers, an inclusive developmental system should cater to the growth needs of employees across all levels and backgrounds. McKinsey research emphasizes the importance of ongoing development for all employees, including—crucially—efforts tailored specifically for women 3 Women in the Workplace 2023 , McKinsey, October 5, 2023. and other underrepresented groups. 4 Diversity matters even more: The case for holistic impact , McKinsey, December 5, 2023. Such development programs not only foster a more equitable culture but also help unlock the full potential of the entire workforce.

Traditionally, many companies have used relative ratings to compare and rank employees against one another, often resulting in a forced distribution or curve. Employees are placed into categories or tiers based on their relative performance, with a predetermined percentage falling into each category (for example, top 10 percent, middle 70 percent, and bottom 20 percent).

Many companies today are simplifying their ratings systems so employees understand where they stand while shifting toward development approaches tailored to individuals’ strengths and weaknesses. The goal is to identify areas for growth and provide targeted support to help employees enhance their capabilities and skills.

While assessing performance remains important, the emphasis should be on using those assessments as a starting point for identifying developmental opportunities, with an understanding of both strengths and weaknesses and the specific development needs to improve performance. The focus shifts from mere evaluation to understanding the underlying factors that contribute to an individual’s performance, be it skills gaps, mindsets, or environmental factors.

Four reward categories—compensation, career progression, development opportunities, and recognition—remain the core pillars of an effective performance management system. Most leading companies provide individual rewards (as opposed to team- or corporate-driven ones), with equal relevance given to short- and long-term incentives, looking at impact holistically and balancing investment in all four reward categories.

Under certain circumstances, it may make sense to emphasize financial rewards, particularly in sales functions or other roles where monetary incentives are highly valued. Indeed, some organizations may double down on monetary compensation, offering significantly higher pay packages to their top performers, because money is seen as a key motivator in these roles.

In other cases, it may be more effective to take money off the table and emphasize nonfinancial rewards, such as recognition, flexibility, and career development opportunities. While base pay may remain the same across the firm, high performers can be rewarded with faster career progression, more recognition, and better development opportunities. A 2009 McKinsey survey found that “three noncash motivators—praise from immediate managers, leadership attention (for example, one-on-one conversations), and a chance to lead projects or task forces” were “no less or even more effective motivators than the three highest-rated financial incentives: cash bonuses, increased base pay, and stock or stock options.” Furthermore, “The survey’s top three nonfinancial motivators play critical roles in making employees feel that their companies value them, take their well-being seriously, and strive to create opportunities for career growth.” 5 “ Motivating people: Getting beyond money ,” McKinsey Quarterly , November 1, 2009. More than a decade later, McKinsey research found that managers and employees remain misaligned: specifically, employers overlook the relational elements—such as feeling valued by a manager and the organization and feeling a sense of belonging—relative to how important these factors are to employee retention (Exhibit 2). 6 “ ‘ Great Attrition’ or ‘Great Attraction’? The choice is yours ,” McKinsey Quarterly , September 8, 2021. Indeed, the importance of nonmonetary incentives represents a consistent theme in performance management research and inquiry.

Given the time and effort required to effectively implement nonfinancial rewards, it’s crucial for organizations to carefully consider how to deploy these rewards strategically with employee groups. The decision of where to place emphasis should align with the organization’s culture, values, and the specific workforce’s motivations.

It’s worth noting that companies focusing on team achievement over individual performance also tend to value praise of the team. Public recognition and praise for effective teamwork and joint accomplishments can foster a sense of unity, camaraderie, and motivation.

Things to get right

Of the global companies we observed, there was a shared set of enabling factors across those with effective performance management systems. These things are fairly intuitive, but they are hard to practice well. Done consistently, they can produce powerful results.

• Ensure that performance management systems are agile. Systems should allow for goals to be easily updated so the workforce—and therefore the organization—can respond to quickly changing conditions. The processes themselves should also be agile. For instance, relationships and interactions between managers and employees should allow for coaching that is close to real time so employees are consistently being pushed in the right direction—and learning to create that momentum themselves.
• Provide regular feedback. Annual reviews can create a bottleneck on managers and the C-suite. More regular performance conversations can be successful in a variety of formats; quarterly, weekly, and casual check-ins should supplement formal reviews. Conversations can be about both the what and the how of the work and be a source of ongoing coaching.

If reviews remain once a year rather than more frequent, top management may consider prioritizing their direct involvement in the evaluation process to keep a pulse on employee sentiment and progress. A leading financial institution in Europe chose this route and found it was able to build a strong capability-building program around a feedback culture that is unafraid of difficult conversations.

• Establish an effective fact base. According to our research, only two in five companies use both upward and downward evaluation in individual performance reviews. To establish a more comprehensive fact base, organizations can implement robust 360° review processes that solicit feedback from an employee’s manager, peers, direct reports, and even customers or stakeholders outside the company. Many leaders have found that 360° reviews offer a comprehensive understanding of an individual’s performance because such reviews consider perspectives from both those who are led and those who are in leadership roles.
• Maintain rating and differentiation. Many companies have reassessed their approach to employee ratings and the subsequent differentiation of consequences. While some companies have eliminated ratings altogether, most companies have been evolving their systems to drive motivation, recognize and incentivize performance, and create a “talent currency.” This means a high performer from one division is considered by the organization to be of the same caliber as one from another division. Overall, leaders are pushing for simplification, such as moving from a seven-tier approach to a four-tier or even three-tier system. There is also a stronger link between ratings and outcomes, as well as a shift from forced distribution to distribution guidance.
• Employ gen AI. Gen AI—the latest technology to change the business landscape—can be a tool to support select elements of performance management, such as setting goals and drafting performance reviews. A manager could use the technology to aggregate and synthesize input from different sources to draft communications to and about employees more efficiently, freeing them to focus on the core value driving parts of performance management and giving more time for personal interactions with their employees, such as coaching and feedback. 7 For more, see People and Organization Blog , “ Four ways to start using generative AI in HR ,” blog post by Julian Kirchherr, Dana Maor, Kira Rupietta, and Kirsten Weerda, McKinsey, March 4, 2024.

Getting started

Companies can get started by understanding where they are now. Specifically, they should assess their organizations’ current performance culture, including the level of adoption of the existing performance management system and its quality. Decision makers should then use the following three questions to check the health of their performance management efforts and outline their ambitions for performance management:

• Are we getting the expected returns from the time invested in the performance management process, and does it drive higher performance and capabilities?
• Does the current performance management system reflect the needs and context of this particular business or workforce segment?
• Do we have a performance culture? (Hint: How frequent are employees’ coaching interactions? How clear and differentiated is feedback?)

Many traditional approaches to people management are unlikely to suffice in today’s top-performing organizations. The research-backed benefits of prioritizing people’s performance, from enhanced revenue growth to lower attrition rates, underscore the strategic importance of these systems. By embracing a fit-for-purpose design anchored in the key elements of performance management, organizations can position themselves as dynamic and adaptive employers.

Simon Gallot Lavallée is an associate partner in McKinsey’s Milan office, where Andrea Pedroni  is a partner; Asmus Komm is a partner in the Hamburg office; and Amaia Noguera Lasa is a partner in the Madrid office.

The authors wish to thank Katharina Wagner, Brooke Weddle, and the many industry professionals who contributed to the development of this article.

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A new blueprint for performance management

Featured topics, october 23, 2021.

In-depth interviews with 67 elite performers have shown us where organizations are going wrong with performance management — and how to make it right.

It's time for businesses to make feedback a natural and regular part of working life

Almost nobody we speak to in the corporate world seems satisfied with their performance management processes — and absolutely nobody knows what to do about it. We’ve all tried making tweaks. We’ve revisited, revised and relaunched. But no organization has managed to crack the age-old problem of how to cultivate feedback conversations that consistently drive improvements in performance.

To get a fresh and highly informed perspective on the subject, we asked 67 top-flight performers in fields ranging from theatre, film and TV to medicine and emergency services to tell us about their experiences of performance management. What they described to us was an approach, understanding and mindset that are unlike anything we are used to in the corporate sphere.

In their world, feedback is built into the day-to-day rhythm of work, not stored up to be shared in annual performance reviews.

In their world, those giving feedback are masters in human behavior, so they do not have to fall back on fixed performance management plan of action but can instead provide personalized and highly effective input whenever and wherever it is needed.

In their world, performance management is seen as a collaborative process, where feedback givers share “notes” rather than opinions, and work with feedback receivers to co-create improvement ideas.

In their world, people become accustomed to receiving feedback very early on in their careers and see input from others as critical to driving performance.

The point is that their world works. Ours doesn’t. So, we say it’s time for us to rip up the rulebook of performance management and create a new blueprint for driving individual and team performance across the corporate world.

What’s wrong with performance management?

In the corporate world, we tend to discuss performance management in terms of ratings, structure, process and other formal procedures and techniques. But for the elite performers we spoke to, feedback is the key to shaping growth, improvement and course correction — not formal performance management plans or interventions. What’s more, feedback is viewed as a fundamental part of everyday life. Everyone expects it. Everyone is hungry for it. As British Olympian, Alex Partridge, put it:

“Feedback is the only way to improve in rowing. You come off the water and analyze immediately. This feedback loop — three times a day — ensures you constantly do what is needed.”

Learning from our research participants, we believe it is time to redefine feedback conversations and their role in how we think about performance management. Feedback should not be seen as a nice-to-have. It has to become a natural and regular part of the corporate workplace.

Create the right environment for feedback

Effective performance conversations do not just happen by chance. It is critical to develop, embed and sustain the right conditions to enable free-flowing feedback between managers and employees to thrive within an organization. We have identified three key pieces of “scaffolding” you need to have in place to create a more impactful performance management environment.

First is a shared performance purpose . This gives people reason to seek out, accept and understand feedback — because, in doing so, they are helping the team achieve a common goal.

Second: culture and values . The aim should be to create an environment where feedback becomes just “what we do around here,” and is given and received across the peer group.

Third is a climate of psychological safety. This means an environment in which people do not feel threatened by feedback, and where they know they won’t be punished for making a mistake. As Ted Brandsen, Director of the Netherlands National Ballet, explains:

“I think they’ve got to be in a place where they feel comfortable and in control, not threatened. It’s not being called into the headmaster’s office. A bit more casual, I think, would be best.”

Sort the timing

The elite performers we spoke to were shocked to learn how long feedback is routinely “stored up” in the corporate world before being shared. In their minds, feedback is something to be given in the moment, circumstances permitting. The idea that performance management plans arrange for feedback to be given on an annual, quarterly or even monthly basis is completely alien to them.

The arguments in favor of regular, spontaneous feedback are many. For one thing, people’s memories are extremely unreliable. The longer feedback is delayed, the less recognizable it becomes and the less impact it has on the receiver. For another thing, the shorter work cycles of today’s business environment are not suited to a formal process of annual or quarterly reviews. It is much better to have a performance management process where individuals can set a personal rhythm for feedback directly linked to the cycle of their work.

Achieving a constant flow of feedback between managers and employees is difficult — but doable. Organizations could start by baking “feedback moments” into the daily cycle of work (for example by starting every meeting with a quick note on what feedback attendees might want at the end) and ensuring there is time for a dedicated reflection point at the end of each performance cycle.

Help leaders see the person

Providing nuanced and actionable feedback is not easy. Organizations have tried to help feedback givers meet the challenge by providing them with conversation models, scripts, rules and formulas. But the truth is that no amount of formal support mechanisms or stringent performance management plans will ever be enough. Delivering personalized feedback in the moment requires leaders who have both a deep understanding of human behavior and a significant level of self-awareness, as well.

Our research participants have helped us identify five key traits that define a successful feedback giver: courage, humility, credibility, empathy and honesty. Through our discussions, we have also managed to define the thought process that effective feedback givers go through before delivering any feedback. It looks something like this:

“What is it specifically I see going on?

“What am I hearing? Am I totally present?”

“What is the impact of what I am seeing and hearing?”

“Will the feedback I want to give shift performance?”

“Is this the right moment for the feedback to be received?”

The final piece of the puzzle for effective feedback-giving is the concept of “notes”. It’s a concept we came across many times in our interviews with participants in fields as wide-ranging as the military and the arts. It describes an approach to collecting and summarizing observations on a performance, with the aim of making the performance better — and thus, your performance management efforts more meaningful. Most critically, the process of taking and delivering notes is a part of how the work gets done. It’s not treated as a separate activity (as feedback in industry often is).

Grow feedback-hungry individuals

Feedback is a two-way process. So, if we really want to boost performance — and make sure our performance management efforts do not fall on deaf ears — we need to look beyond feedback givers to consider what makes a good feedback receiver, as well.

The good news is that effective feedback receivers — like feedback givers — are made, not born. It demands a set of skills that can be acquired through practice. And the earlier you start building those skills, the bigger impact it will have on your long-term performance and career.

One critical area for individuals to work on is self-awareness. Not only does this make you more receptive to feedback from others, but it also promotes a mechanism for more objective self-assessment.

Another critical area is resilience. Why? Because feedback, however constructive, is a form of adversity. The more resilient you are, the better equipped you will be to handle — and benefit from — regular, honest feedback.

Driving individual and leadership accountability

Our research tells us there are some key enablers of successful performance management transformation in terms of the culture and work environment, the process fundamentals, the traits and thought processes of feedback givers, and the resilience and self-awareness of feedback receivers. Get all these interdependent elements right and you will have gone a long way to driving individual and leader accountability for great feedback conversations.

We’ll leave the last words to one of our participants, Patsy Rodenburg OBE, Head of Voice at the Guildhall School of Music and Drama in London, who provided us with a perfect description of the kind of performance management interaction we should all be aiming for:

“You can’t say, ‘Come into my office and you sit on that chair and I’ll sit here.’ You have to have a tremendous amount of respect for the person. There’s got to be a humanity in that moment when two people are present together.”

Download the full performance management whitepaper for more a detailed breakdown of our research and to discover the key steps organizations can take to create a performance management process and culture that enables individuals and teams excel.

Download the PDF

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🏆 best essay topics on performance management, 👍 good performance management research topics & essay examples, ✍️ performance management essay topics for college, 🎓 most interesting performance management research titles, ❓ research questions on performance management.

• Performance Management and Training: A Case Study of Coca-Cola
• Amazon Approach to Management and Performance Evaluation
• The Amazon Company’s Performance Management
• Performance Management and Strategic Planning
• Hotel Management: Performance Improvement Plan
• Google Inc.’s Performance Management System
• Leadership, Management Style and Organizational Performance
• Why Performance Management Appraisals Fail Performance management appraisal may fail due to judgment by top management and the supervisors. The top management and supervisors sometimes experience errors.
• Public Service Sector: Performance Management Addressing the implementation and improvement of performance management in the public sector remains essential in providing quality service delivery to the public.
• Management: Performance Measurement in Organizations Performance measurement is vital in all organizations because the organizations need to verify the validity of the selection methods and to improve the productivity.
• Essential Components of Performance Management This discussion post outlines the key elements of a performance management process, including establishing standards and creating a code of conduct.
• TD Canada Trust Bank’s Performance Management The performance management system implemented in the TD Canada Trust Bank corresponds to the international financial sector management standards.
• Nike Company’s Performance Management & Logistics The conceptualization of Nike as a company dates back to the year 1962 when its founders, Bill Bowerman and Phil Knight.
• Performance Management and Appraisal Systems The performance management process is important. During it the HR team works together with other members of the company towards achieving organizational goals.
• Performance Management System: Role and Advantages Performance management systems play an important role in the achievement of organisational goals, mission, and vision
• Performance Management System: Personal Experience Managers collect the data systematically based on each department’s performance. In other words, the performance is measured by the results.
• Strategic Human Resource Management and Performance For successful performance, human resource managers have to ensure that they recruit employees with potential and possess qualifications that will enable them to create value.
• Performance Appraisal and Human Resource Management The success of any organization is mainly determined by its human resources and hence there is a need for a motivated workforce.
• Employee Performance Management System In human resource management, it is important to ensure that employees are motivated and satisfied with their work. It can achieve by carrying out employee performance management.
• Informative Speech On Business Performance Management In the troubled days of economic crisis and recession the only way companies have to survive economic uncertainty is by making good use of business “performance management”.
• Performance Management and Socio-Ecological Framework Socio-ecological framework implies the interconnection of an individual and the society. It means that changes at any framework level might invoke change on other layers.
• Strategic Performance Management Plan for a Sales Manager The paper creates a strategic performance plan for the Dialogue Direct and recognizes the attributes that will be rated regarding the position of the sales manager.
• Negative Performance Management Managers should possess strong planning and problem-solving skills to establish clear goals and strategies to achieve goals on time without losing quality.
• Performance Management and Working Relationships Performance management is an area of execution, and benefits may not be obvious at the project planning stage.
• Quality Management and Performance Improvement in Healthcare There are a number of healthcare quality issues affecting the performance improvement of various caregiving centers.
• Performance Management System in Healthcare The Joint Commission enhances the level of the healthcare services provided to the public. The entity ensures that hospitals have a good performance management system.
• Importance of Performance Management in Organizations The paper explores the concept of benefits management at the organization plumbing supply company in Olean, New York.
• Information Systems and Project Management Performance The authors assert that requirements instability and requirements diversity are related to stakeholder perception gaps and this can be tied in with project performance.
• Performance in Safety Management Systems (SMS) The study will collect data on improvement patterns of SMS regulations and technologies as two qualitative independent variables and risk factors.
• Performance Management and KPIs in a Management Measurement System Performance management is a dynamic process that requires timely reports so that procedures are drawn to guarantee that corporate goals are achieved.
• Performance Management in Business Performance has now been integrated into the quality management system of the organization. Effective performance measurement influences efficacy of the use of information.
• Balanced Scorecard: Performance Management Tool This essay presents an assessment of a balanced scorecard used by an organization in a real estate business environment.
• Business Intelligence and Performance Management Business Intelligence encompasses software tools for querying, reporting and analysing. It may be summarised as the processes and tools that turn data into information.
• Performance Management Issues of the Organization There is a significant relationship between compensation and performance management. This is because compensation can be a way of performance management.
• Organizational Management and Performance: Inter-Organizational Relationships Organization as a system entails that there must be inputs which are to be processed in order to give an output. This output is optimal goal the organization strives to accomplish
• Earned Value Performance Management for Projects In the earned value management system, the project performance is measured by taking into account the actual cost spent for the baseline plan.
• Performance Management: Aspects and the Levels Performance management is a cyclical process that is usually aimed at improving the performance of either under performing group, individuals, to further improve good performers.
• Human Resource Management and Performance of the Organization The success of the company relies on the proper management of its people because the workforce of a company is the major factor that runs the business.
• Performance Management: Term Definition Performance management is assessing the process of achieving goals and objectives to unsure that it is successful through communication and taking the right action.
• Performance Management: Employee Performance Documentation Organizations that succeed in effective documentation of employee performance can feel secure in the current economic realities.
• Performance Management and Appraisal Plan The Office of Human Resources presents a Management by Objectives (MBO) performance appraisal plan and process that will be implemented in the next month.
• Management Functions for Better Company Performance Managing an organization is not easy when one has to the role of a leader, the role of a manager, and the role of an HRM specialist.
• Portfolio Management: Stock Selection and Portfolio Performance The paper covers the performance of the portfolio, stock selection criteria, each stock performance, and the returns of the portfolio for the period.
• Metrics and Performance Measurement in Operations Management Metrics is indeed a powerful management tool in aligning company strategies and objectives and ensuring people are working towards a common direction.
• Performance Management Issues: Types and Factors Performance management aims to ensure the effectiveness and growth of the organization through the definition of strategic objectives and management activities.
• New Employee’s Success and Performance Management Once a new employee is selected, strategies of how best to maximize employee success on the new job should be put in place.
• Performance Management: Warehouse Performance Measurement The analysis of the costs taken by the organization can be viewed as the first step towards identifying the changes in the warehouse business performance.
• Options Consulting Solutions Company’s Performance Management Options Consulting Solutions is a recruiting firm headquartered in Toronto, Ontario. The firm was started more than two decades ago.
• Management: Effective Teamwork Role for Organizations Performance Groups usually pass several important stages: forming, storming, norming, and performing. Depending on the stage, teams and groups demonstrate unique organizational features.
• Issues Concerning the Use of Social and Environmental Indicators for Performance Management
• Performance Management and Performance Measurement in the Education Sector
• The Relationship Between Performance Management and Organizational Goals
• Effective Performance Management With the Balanced
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StudyCorgi . "94 Performance Management Research Topics." July 14, 2022. https://studycorgi.com/ideas/performance-management-essay-topics/.

StudyCorgi . 2022. "94 Performance Management Research Topics." July 14, 2022. https://studycorgi.com/ideas/performance-management-essay-topics/.

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Dissatisfaction with performance appraisals is pervasive. They are seen as time-consuming, demotivating, inaccurate, biased, and unfair. A McKinsey survey indicates most CEOs don’t find the appraisal process in their companies helps to identify top performers, while over half of employees think their managers don’t get the performance review right. A Gallup study is more negative: Just one in five employees agreed that their company’s performance practices motivated them.

• Frank V. Cespedes is a senior lecturer at Harvard Business School and the author of Sales Management That Works: How to Sell in a World That Never Stops Changing (Harvard Business Review Press, 2021).

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Impact of green work–life balance and green human resource management practices on corporate sustainability performance and employee retention: mediation of green innovation and organisational culture.

1. Introduction

Research gap and problem, 2. literature review, 2.1. theoretical framework, 2.1.1. amo theory, 2.1.2. social exchange theory (set), 2.2. ghrm practices and csp, 2.3. ghrm practices and er, 2.4. gwlb and csp, 2.5. gwlb and er, 2.6. ghrm practices and gi, 2.7. gi and csp, 2.8. gi and er, 2.9. gwlb and gi, 2.10. ghrm practices and oc, 2.11. oc and csp, 2.12. oc and er, 2.13. gwlb and oc, 2.14. mediating role of gi between ghrm practices, gwlb, and csp, 2.15. mediating role of gi between ghrm practices, gwlb and er, 2.16. mediating role of oc between ghrm practices, gwlb, and csp, 2.17. mediating role of oc between ghrm practices, gwlb, and er, 3. methodology, 3.1. data and sampling, 3.2. measurement, 4. analysis and results, 4.1. reliability and validity, 4.2. common method bias, 4.3. discriminant validity, 4.4. hypothesis results, 4.5. gi and oc as mediator, 5. discussion, 5.1. conclusions, 5.2. practical contribution, 5.3. theoretical contribution, 5.4. limitations and future recommendations, author contributions, institutional review board statement, informed consent statement, data availability statement, acknowledgments, conflicts of interest.

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Share and Cite

Lin, Z.; Gu, H.; Gillani, K.Z.; Fahlevi, M. Impact of Green Work–Life Balance and Green Human Resource Management Practices on Corporate Sustainability Performance and Employee Retention: Mediation of Green Innovation and Organisational Culture. Sustainability 2024 , 16 , 6621. https://doi.org/10.3390/su16156621

Lin Z, Gu H, Gillani KZ, Fahlevi M. Impact of Green Work–Life Balance and Green Human Resource Management Practices on Corporate Sustainability Performance and Employee Retention: Mediation of Green Innovation and Organisational Culture. Sustainability . 2024; 16(15):6621. https://doi.org/10.3390/su16156621

Lin, Zi, Hai Gu, Kiran Zahara Gillani, and Mochammad Fahlevi. 2024. "Impact of Green Work–Life Balance and Green Human Resource Management Practices on Corporate Sustainability Performance and Employee Retention: Mediation of Green Innovation and Organisational Culture" Sustainability 16, no. 15: 6621. https://doi.org/10.3390/su16156621

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Last Updated: August 7, 2024 | Read Time: 8 min

One-Minute Takeaway

• By 2025, experts say 20% of the U.S. workforce will go remote.
• Proximity bias is a form of favoritism that gives in-person workers more opportunities .
• There are several key differences between proximity bias vs. similarity bias, but both can lead to discrimination.

In 2024, 14% of adults in the U.S. workforce work from home all the time ( USA Today ). By 2025, experts predict that number will go up to 20%. The rise of remote work is having a major impact on professional relationships. There are plenty of upsides to this, but it’s not black-and-white. In fact, a new form of favoritism is becoming more prevalent in the workplace: proximity bias.

What is Proximity Bias?

Proximity bias is the tendency of business leaders to favor people who are physically closer to them. For example, an executive based in New York might give plum assignments to an employee they see in the Manhattan office every day, instead of considering a high performer who lives in Los Angeles. 

Unlike more overt forms of bias – like racism or sexism – proximity bias can be extremely hard to identify. It’s often unconscious, and it’s circumstantial. An employee can’t change their ethnicity, but they could move to a new city or switch to an in-office schedule at any time. Proximity bias may not be as visible or well-understood as other forms of discrimination, but its impact can be just as detrimental.

This form of bias relates to the misperception that remote workers are less productive. The “seeing is believing” mentality can lead to an “out of sight, out of mind” approach to managing remote or hybrid teams. That leads to a massive and damaging disconnect between the work being done and the way managers perceive it. According to the Harvard Business Review , “remote workers get promoted less often than their peers, despite being 15% more productive on average.”

As organizations continue to embrace flexible work arrangements, the potential for proximity bias has grown significantly. Below are some examples of how it can manifest in the workplace, and strategies for mitigating its effects to create a more equitable and inclusive work environment for all employees, regardless of their physical location.

Examples of Proximity Bias

Because this is a new concept for many, it can be hard to recognize proximity bias in action. Here are some situations to look out for in the workplace:

• Exclusive networking opportunities: Employees in the same city as the company headquarters get invited to weekly happy hours with executives.
• Unequal assignment of high-profile projects: Local workers are more likely to get assigned exciting projects because they’re top-of-mind for business leaders.
• Spontaneous recognition: In-person employees get more frequent and spontaneous praise from managers who see their work firsthand.
• In-person team-building activities: If all team-building activities take place in person, remote workers are isolated from company culture.
• Promotion disparities: Onsite workers get promoted more often than remote or hybrid team members.

Proximity Bias vs. Similarity Bias

It’s easy to confuse proximity bias with similarity bias, but they have some important differences. Similarity bias – also called affinity bias – is the tendency to favor people who share your characteristics or experiences. Both biases can lead to favoritism and even discrimination, but they have slightly different causes. To address either one, HR should know how to distinguish between them.

When you can recognize the difference between proximity bias vs. similarity bias, you can address the issue at hand. As remote and hybrid work get more popular, HR should develop strategies to combat these forms of bias. 

How to Mitigate Proximity Bias

The best way to address proximity bias is a little different for every organization. Use these ideas to get started, and tailor them to suit your company’s needs.

Evaluate the Data

Start by collecting data on key metrics that could be impacted by proximity bias. You could look at promotion rates, project assignments, and participation in social events across local and remote teams. Analyze your findings to identify potential disparities.

Appoint Local Culture Champions

If you have workers in different areas of the country, designate local culture champions to organize group events. They could secure a co-working space, plan an outing to a baseball game, or just host a monthly team dinner. These in-person activities help build community and foster a sense of belonging.

Create Connections

Schedule virtual team-building events. These could be lectures by experts or inspirational speakers, book clubs, coffee chats, happy hours, or anything that aligns with your company culture. Give employees the chance to connect with each other, both one-on-one and in small groups.

Provide Leadership Training

Educate your managers and executives about proximity bias. In these training sessions, give them practical strategies to counteract it. Encourage them to hold each other accountable for supporting both local and distant team members.

Establish Clear Performance Metrics

Develop objective, specific criteria to measure employee performance. These metrics should apply equally to all employees, regardless of their location. Transparency is key here. When your entire team knows what’s expected of them, they can work toward shared and individual goals more easily.

How Paycor Helps

As a virtual-first organization, we understand firsthand how proximity affects working relationships. HR tools like Talent Development can improve communication across any distance. Our performance review tools foster a culture of feedback, helping managers connect with employees. Other features, like the recognition tool, help geographically distant team members build relationships with each other. Employees can publicly recognize one another for achievements, automatically notifying leaders of each other’s best work.

In addition to our suite of HCM software, Paycor’s resources can support HR leaders as they develop processes to interrupt bias.

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