• Mark Shaw

Innovation and Productivity

I am increasingly being asked to discuss performance management because people consider the system is broken and they are looking for an alternative – something that works.

Like many other contemporary writers including Di Armbrust, Tim Baker, Sam Culbert, Roger Ferguson, Ted Mouradian, Dan Pink, Ricardo Semler, Professor Paul Thompson and Graham Winter, my experience indicates that only through innovation and revised thinking can this be achieved (

While I admit to challenging thinking through discussion such as “What do Performance Reviews and Santa Claus have in Common? ( and “Is this a Pen?” (, and highlighting how the current approach disenfranchises good employees (, I am passionate about spreading the news that there are proven alternatives including The 2% Effect (

In any field productivity improvement is only achieved through innovation.  Look at the massive improvements medicine, IT, transport and telecommunications have made in the past 100 years.  In all cases innovation and productivity have led to improved standards of living and increases in job opportunities. 

E.g. if you visit historic Sovereign Hill in Victoria, you’ll learn that in real terms, the wages for an underground miner in the 1880’s were similar to what a miner earns today.  However the productivity of each miner is dramatically more today due to innovation and today’s mine worker enjoys a much higher standard of living than his/her 1880’s colleague. 

Sadly how we approach managing employees does not seem to have achieved the same success. 

Despite the best efforts of those mentioned above (and many others) I argue it is because our approach to performance management has remained stagnant and stuck in Frederick Taylors’ Scientific Management Principles from the early twentieth century.

While Richardo Semler proved over 30 years ago that innovation in managing performance can lead to productivity improvements and increased living standards, unfortunately the broader evidence indicates that our approach to how people are ‘managed’ in the workplace has not fundamentally changed.  

With the demise of the mining boom, productivity is gaining prominence and the threat of a reduced standard of living seems probable.

The challenge is do we rely on “the Government” and increased taxes to maintain our standard of living or do we identify and embrace innovative and proven ways to increase productivity instead?

I clearly advocate for the latter and encourage everyone to find ways to unlock the hidden capacity in their organisation so employment levels and life styles are maintained.

Ps. start with your performance management system; it’s actually a low hanging fruit!

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