The performance contract is essentially a slight variation of the action planning process with a preprogram commitment. Based on the principle of mutual goal setting, a performance contract is a written agreement between a participant and the participant's supervisor. The participant agrees to improve performance in an area of mutual concern related to the content of the HRD program. The agreement is in the form of a project to be completed or a goal to be accomplished soon after the program is completed. The agreement spells out what is to be accomplished, at what time, and with what results.

Performance contracting is administered much the same way as the action planning process. Although the steps can vary according to the specific kind of contract and the organization, a common sequence of events is as follows:

• With supervisor approval, the employee (participant) decides to attend an HRD program.

• The participant and manager mutually agree on a topic for improvement with specific measure(s).

• Specific, measurable goals are set.

• The participant is involved in the program where the contract is discussed and plans are developed to accomplish the goals.

• After the program, the participant works on the contract against a specific deadline.

• The participant reports the results to his or her immediate manager.

• The supervisor and participant document the results and forward a copy to the HRD department along with appropriate comments.

The individuals mutually select the topic/measure to be improved prior to program inception. The process of selecting the area...