CHAPTER 8 Enhancing Engagement Through Effective Performance Management In Chapter 7, we discussed the various HR management activities that contribute to the human resource value chain (HRVC). As we demon- strated in that chapter, these activities provide both a climate for and contribute directly to the level of employee engagement. In this chapter, we turn our attention to another organizational-level process that enhances employee engagement: the performance management process. Performance management is a comprehensive and ongoing process of identifying performance expectations for individual employees, providing expectation-feedback, and evaluating performance in light of those expec- tations (Gruman & Saks, 2011; Locke & Latham, 1990). Performance management systems (PMNG) are designed as an organiza- tion-wide process; however, the actual implementation and effectiveness of these processes is often determined by the extent to which an employee’s direct supervisor embraces the process (Aguinis & Pierce, 2008). In this chapter, we discuss the components of a well-designed PMNG and evaluate the impact of this system on the level of employee engagement. We also evaluate the impact of a manager’s contingent reward (CR) behaviors on the relationship between the PMNG and employee engagement. PERFORMANCE MANAGEMENT Performance management is based on effective goal-setting. The impact of goal-setting on employee performance has been well documented in both laboratory and field settings (Field, Heineke, Langabeer, & DelliFraine, © The Author(s) 2017 J.L. Whittington et al., Enhancing Employee Engagement, DOI 10.1007/978-3-319-54732-9_8 81