Chapter 9: Performance Management in the Virtual Workplace

Performance appraisal and management systems have been analyzed within organizational contexts that typically are relatively stable, hierarchically organized, and homogeneous. With the emergence of technology and virtual organizations (VOs), these conditions are unlikely to exist. Shifting workplace conditions provide an opportunity to reexamine and challenge what we mean by performance management, how it is conducted, and why. In this chapter, we describe common characteristics of emerging virtual workplaces followed by a review of key issues in performance management. The first issue involves the nature and measurement of the performance construct, including the unit of analysis, the unit of time and the content of performance itself. Second, it is critical to consider the goals of the constituents of performance management including the organization, the rater and the ratee. Third, because the environment is changing so rapidly with virtual workplaces, we review the influence of context on goal development and performance management. Finally, we link five distinctive features of VOs (e.g., technolog}', geographic dispersion, trust, shared information and skills, and speed/flexibility/results orientation) with factors associated with successful performance management and highlight ways in which virtual workplace performance management may either continue in a similar form or change significantly. Because research on virtual teams and organizations is in its infancy, areas of future research are identified.