Abstract Perceptions of the effectiveness of performance appraisal and feedback techniques are frequently neutral to negative. This chapter proposes that a focus on techniques for doing appraisal and feedback has been shortsighted and argues that the creation and maintenance of a context delivering honest and effective feedback—here called a feedback climate—is the best way to improve the effectiveness of the feedback process. The feedback climate is defined as the bundle of practices organizations implement to ensure that performance feedback to members of the organization is honest and effective. The strategic climate literature supports the conclusion that the degree to which organizations focus bundles of practices on important processes (e.g. fairness and ethics) leads directly to important outcomes (e.g. safety and customer service). Using a sample of 234 companies, a new measure of feedback climate is developed, and support for it is found as a correlate of positive perceptions of (1) individual employee feedback effectiveness (e.g. developing employee skills and abilities and motivating employees) and (2) organizational feedback effectiveness (e.g. increasing organizational performance and supporting business strategy). In addition, it is indicated that feedback climate is more central to such perceptions of effectiveness than are the usual appraisal/feedback techniques studied by researchers and used by practitioners (including type of ratings used, ratingless reviews, developmental vs. evaluative feedback, crowdsourced feedback, and so forth). Based on results obtained with this new cross-organization diagnostic feedback climate measure, several implications for research and especially for practice are presented.

Purpose - The authors comment on the paper by Aguinis et al. (2018). The authors believe that their hypotheses probably are true, but their methodology is flawed and their data do not support their conclusions. Design/Methodology - The authors review and comment on the paper by Aguinis et al. (2018). Findings - The data do not adequately demonstrate a power law distribution for chief executive officer's (CEO) performance because the analysis confounded external conditions affecting performance, and the authors use inappropriate dependent variables. The analysis does not demonstrate a power law distribution for CEO pay because the analysis does not take into account changes in pay level and mix over time. The analysis does not show a lack of overlap between the two distributions because it does not take into account the way that the CEOs are paid for performance and because it uses CEO pay averaged over CEO tenure. Research limitations/implications - A more convincing analysis of the authors' hypothesis would require the use of total shareholder return (TSR) as the dependent variable for organizational performance and would require a number of much more specific controls. Practical implications - The authors call for greater use of power law thinking by practitioners in setting CEO pay. Their analysis indicates that practitioners already think in power law terms and allocate CEO pay accordingly. Moreover, power law theory and findings could be misused as an excuse for paying average CEOs much more than they are already paid. Social implications - The authors add another perspective on CEO pay. Originality/value - The authors' perspective is informed both by research and by consulting experience on CEO pay projects.

Companies will see a "tremendous increase" in experimentation with competency-based pay plans for knowledge workers during the next ten years. While solid outcomes research is still lacking, design choices are becoming clearer.

The debate over eliminating performance ratings addresses many important theoretical and practical issues. However, the academic debate on the topic is disconnected from the concerns of practitioners. Knowledge gained from theory-driven research is not leading practice on the use of performance ratings, despite the large volume of potentially relevant research findings. Many organizations are charging ahead with performance management solutions that seem sensible to them. They may be interested in academic research, but they are not waiting for it. We will argue that academic researchers who hope to influence practice need to better understand the concerns of practitioners and the research opportunities that are presented by contemporary practice.

This symposium examines the emerging trend in performance management practices to do away with formal numerical or letter performance ratings. Performance management appears to be at the beginning of a paradigm shift towards practices that emphasize more frequent, timely, and developmental feedback for employees. While few organizations are eliminating performance appraisal altogether, it is clear that many are experimenting with new practices, including ratingless feedback, on-going coaching, and the “feedforward” interview. Our goal is to present some early empirical work that addresses the rapid changes we are seeing in practice, assess their impacts, and detail implications for researchers and practitioners. This symposium will present findings from academic studies of four organizations experimenting with the new styles of feedback, perspectives from consultants working with companies implementing the new practices, and discussion led by two Academy Fellows to put these changes in context of the past, present and future of performance management. Feedforward: An Alternative to Deficit Based Models of Performance Management Presenter: Marie-Helene Budworth; York U. Presenter: Gary P. Latham; U. of Toronto Employee and Supervisor Reactions to Ratingless Performance Feedback Presenter: George S. Benson; The U. of Texas at Arlington Presenter: Gerald E Ledford; U. of Southern California Forget the Ratings Debate: How to Really Drive High Performance Presenter: Sharon Arad; CEB Presenter: Jane Brodie Gregory; Personnel Resources Decisions Institute

This article first summarizes key themes from a recent article by Gerald Ledford that was published in Organizational Dynamics. That article reviewed changes in employee reward systems during the past 35 years, looked at factors explaining the changes and recommended a set of five changes in the future. Five distinguished corporate HR leaders then comment on the article, exploring a number of important topics in contemporary employee rewards. Finally, Ledford summarizes and responds to the commentaries.

Managers and organizational leaders are continuously looking for ways to position their organizations for success. A recent trend among practitioners has focused on creating a healthy workplace, resulting in numerous contrasting prescriptive approaches toward achieving organizational health. Rather than advocating a particular approach to a healthy workplace, this article focuses on the need for practitioners to design healthy workplace programs, policies, and practices that fit the specific context of an organization. To do this, the authors propose that employee involvement, though seldom emphasized in discussions of a healthy workplace, is critical to the success of new initiatives. Employee involvement relies on the human capital of an organization to improve organizational functioning. Providing examples from organizations that have recently been recognized for their comprehensive efforts to create a healthy workplace, this article describes ways of fostering employee involvement, recognizing that all organizations, for-profit and not-for-profit, large and small, can use employee involvement to identify high-leverage practices that will have a mutual benefit for employees and organizations. Four major barriers to implementing employee involvement practices are discussed, along with implications for consulting psychology.

Managing turnover is an increasing challenge, especially for companies employing technical and scientific professionals. Many, companies underestimate the cost of turnover and consequently under-invest in reducing it. Rates of turnover among R&D units are lower than other industry segments, but the loss of single lower than other industry segments, but the loss of single individuals can be more costly because scientific and technology professionals are so valuable. It is critical to understand the causes of turnover from the employee's point of view. Causes vary by company and industry, but a survey of scientific and technical workers reveals five types of rewards that affect turnover job content direct financial (cash), benefits, careers, and affiliation. Remedies for turnover in R&D may differ from what might be used with Other staff groups and must address any internal factors that cause staff dissatisfaction, as well as counteract the external pull from other companies.

Pay practices in Western countries appear to be changing more rapidly than at any time in recent decades. Companies are discovering that older pay systems fail to meet business needs, while new alternatives offer better options. The new systems are have been developed based on a new logic that matches the new logic of organization design that stresses employee involvement, lateral processes and teams. This paper first examines organizational changes that are causing older pay systems to fail. Next, it offers a perspective on designing effective reward systems. It then considers major options in the design of base pay and pay for performance plans. Finally, it discusses how firms can plan for the continual evolution of pay systems to meet changing business needs. The pay practices that are now most widespread in Western countries arose in the decades after World War II. They fit the historical, social, and economic context in which they arose. Relatively favorable environmental conditions, such as steady market growth and moderate competition, fostered the rise of large, professionally managed, bureaucratic organizations during this period. Conventional pay systems embody good bureaucratic principles, emphasizing management hierarchy, the division of labor, a focus on the individual, and an emphasis on control and stability. Hierarchy and the division of labor are reflected in the use of numerous job titles and pay grades reflecting different types of work and different levels of authority. The focus on individuals is reflected in the emphasis on individual incentives such as " merit pay. " Management typically maintains as much control over pay as possible. Human resource professionals, using salary surveys and sophisticated techniques, insure that the wages of the firm are not out of line with the labor market and that the firm's practices are similar to those of labor market competitors. 3 The stability of pay practices is impressive; perhaps no other area of management practice has changed less in recent decades. However, pay systems that once were effective no longer meet the needs of many firms. Organizations of the 1990s face highly turbulent and extremely demanding environments. This has led to major organization design changes, and to pressure for pay system changes. The following changes have been particularly critical in stimulating change in pay practices. 1. Globalization of labor markets. The globalization of commerce has been accompanied by the globalization of labor markets. Millions of workers in less developed countries are willing …

The application of Total Quality Management practices has been rapidly increasing in U.S. organizations over the past 6 years, particularly in organizations facing severe competitive pressures. A survey of the 1000 largest companies shows that these practices fall into two main categories: core practices and production-oriented practices. Companies perceive benefit in three areas: improvement of work performance, company competitiveness and profitability, and employee outcomes. Service organizations experience these benefits primarily from implementing core practices more extensively. Competitiveness and profitability in manufacturing organizations is positively impacted by the implementation of the production-oriented practices. Results of analysis on financial outcomes suggest that core practices are positively related to marketshare for manufacturing companies. Production oriented practices are positively related to return on equity and collaboration with suppliers in quality efforts is positively related to total factor productivity index for all companies.