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shes (in a trafficlights reporting visualisation) it gets people39。s attention, focus and resources even though this measure might not be as important as other measures in 39。green39。. In this way, resources and attention can easily be diverted away from potentially more vital measures. At the strategic level, some of EDF Energy39。s senior managers found that PMS can be somewhat mechanistic thereby limiting the freedom for intuitive management. At the tactical level too, the performance review process of PMS can be quite monotonous. This means that managers have to continuously refresh the way in which performance is reviewed to keep it interesting and attractive. Hence the leadership role of local managers plays a key role in the success of the performance management systems。 moreover, they are crucial to moderating the outes of PMS implementation too. Benefits from Performance Management Reviews (Figure 2 page 10) The 39。agency theory39。 of the firm (an academic construct about dependencies) suggests that organisations implementing performance reviews seek to control their employees39。 performance, and so the firm39。s efficiency and effectiveness and therefore its financial results and attractiveness to stakeholders not least its customers and investors. Our previous research shows that firms could obtain additional benefits from performance reviews on 39。the internal way their organisations perform39。, since this is a dependency of these firms39。 productivity, profitability and reputation. Our findings at EDF Energy show that:Performance reviews at operational levels have the power to: Drive new routines and practices, and eventually drive cultural changes Change people?s behaviours Develop key petencies Make operational improvements Improve business results Refresh the whole organisation bottomup Create hardtoreplicate skills Drive organisational learning Performance reviews at executive level have the power to: Improve management capabilities Improve people management skills The implications for practice are: Performance reviews have a direct effect on the ?internal way organisations perform, which influences firms? sustainable petitive advantage Managers should consider the deployment of performance reviews to operational levels to ?liberate the full potential? of their PMS. Organisations that identify and understand the factors that positively affect performance reviews have ?more opportunities to maximisetheir results?. Organisations implementing performance reviews only at managerial levels are potentially missing more than 50% of their benefits. Factors Moderating the Benefits of PMS in EDF Energy Our analysis identified seven factors that influence the PMS effects on EDF Energy?s performance. They are: 1. Corporate principles and values 2. Local leadership 3. Top management mitment 4. Maturity of PMS 5. Underpinning performance management reviews 6. Accuracy of measures 7. Involvement of employees in the solutions of operational problems. The first three factors are related to EDF Energy39。s leadership and management and the last four factors to the PMS use and design. The following figure highlights these factors, (figure3) Corporate principles and values EDF Energy39。s cultural change, from a reactive to proactive mode of action, has transformed its principles and values. In particular, our research identified that its 39。tolerance to failure39。 is a key factor that affects the success of PMS, for example, employees feel less and are more open to talking about aspects of performance. This creates a different working environment where people are prepared to take some risks, create new approaches to improve performance, challenge t