Evaluating the Effectiveness of Performance Management

This integrative conceptual review is based on a critical need in the area of performance management (PM), where there remain important unanswered questions about the effectiveness of PM that affect both research and practice. In response, we create a theoretically grounded, comprehensive, and integrative model for understanding and measuring PM effectiveness, comprising multiple categories of evaluative criteria and the underlying mechanisms that link them. We then review more than 30 years (1984–2018) of empirical PM research vis-à-vis this model, leading to conclusions about what the literature has studied and what we do and do not know about PM effectiveness as a result. The final section of this article further elucidates the key “value chains” or mediational paths that explain how and why PM can add value to organizations, framed around three pressing questions with both theoretical and practical importance (How do individual-level outcomes of PM emerge to become unit-level outcomes? How essential are positive reactions to the overall effectiveness of PM? and What is the value of a performance rating?). This discussion culminates in specific propositions for future research and implications for practice.