ABSTRACT
This chapter focuses on performance management, conceptualizing it as an integrative system that, based on a process of learning, aims to foster stronger links between individual behavior and organizational goals and strategies. It describes two main performance management processes, namely performance measurement and performance feedback. The chapter discusses how learning theory can inform performance management in organizations and examines the key characteristics of effective performance measurement processes. It explores the strategic choices faced by executives responsible for designing and administering an organizations performance management subsystem. The chapter reviews several alternative performance management practices. It discusses how the link between performance management practices and firm performance may be contingent on the degree to which the practices are consistent with the firm's broader human resource (HR) strategy, as well as the alignment between the configuration of performance management practices in use and the firm's strategic business model.
