Performance management system is developed in companies to better shape how employees execute their job responsibilities and complete their work. Ideally, employees should feel comfortable with this process, believing that the communication occurring between managers and workers facilitates the completion of important workplace goals. Unfortunately, many employees become dissatisfied with how their organizations encourage goal-directed behavior, which can result in poor job attitudes, decreased motivation, and reduced effort on the job. These negative factors lead some companies to seek alternative ways to design and implement performance management systems so that employees are encouraged to work hard in their jobs.

Jewelers Mutual Insurance Company (JMI) is one such company that has actively improved its performance management approach, and the results have been very encouraging. Employees were initially dissatisfied with the feedback and goal-setting approaches that were being utilized to manage job performance, so company leaders decided to involve employees in the redesign efforts to create a more viable program that would be satisfactory for all the parties involved. An outside consultant started the process by interviewing top leaders in the company, and focus groups were used to solicit feedback from various other members of the organization. By utilizing a more participative and inclusive approach, the company was able to identify the problems with the current performance management system and generate greater support for the proposed changes that would ultimately fix these issues. This case illustrates how important employee participation is in the effective management of human resources, particularly when developing a viable performance management system.

Several key changes were made to the performance management system based on the feedback received from managers and employees. In particular, inconsistencies in the administration of the performance management system, problems with the rating techniques and forms, and various challenges linking pay to performance were specifically targeted as part of the redesign effort. Such reflection and self-assessment prompted a number of specific improvements to management of job performance within the company. Evaluations are now based on narratives, various metrics of accountability, and job goals. Further, feedback is provided to employees on a quarterly basis, compensation is more strongly linked to individual effort, and the performance management system functions in concert with the other elements of human resource management. The changes made to the performance management processes at JMI Company demonstrate how human resource professionals can work with other staff members to create a system that excites employees and, ultimately, yields greater job performance.

1. Discuss how this case illustrates how greater support for a performance management system can be developed through employee participation.

2. Identify some of the ways that performance management systems can be improved based on the experiences at JMI.