Managing Performance to Change Behavior

Performance appraisal systems are often considered primarily in their role as criterion measures for validation studies. Even when they are considered in other organizational roles, there has traditionally been a strong focus on improving the accuracy of the appraisals. The present article argues that the proper focus of performance appraisal is to change employees' behavior on the job-both task performance behavior and contextual performance. Specifically, appraisals are best considered as part of a larger performance management system, where the entire focus is on improving performance. Such a focus has important implications for how concerned we are about perceived accuracy and fairness. Furthermore, when viewed in this way, it is clear that we must consider how to leverage individual level performance up to the level of the firm, since improving firm performance is critical to any organization's strategic goals.