Performance Management - Current Practice and Future Trends
A report from University of Sydney Business School has just been released on current and planned performance management practices in Australian organisations. The findings included that while traditional performance management practices remain prevalent, few practices are perceived as being highly effective. And only a minority of those surveyed believed that their performance management system supported business outcomes, drove reward outcomes, distinguished adequately between employees (performance-wise), or helped to make legally defensible HR decisions.
For example, the results confirmed that:
1. Many still see performance management chiefly as a compliance exercise rather than as a strategic enabler.
2. While ongoing (informal) feedback is growing, the use of cascading goals and competency assessment remain high in performance management systems.
3. Adherence to top-down rating, and pen and paper assessment and formal reviews leave organisation ill prepared for adapting performance management system to the requirements of remote working.
4. Managers who had avoided difficult conversations pre-COVID still continue to do so.
5. Australian HR professionals continue to harbour significant reservations about the contribution that their performance management system makes to the achievement of positive organisational outcomes.
The report did provide hope for improvement concluding that COVID appears to be setting the stage for accelerated change in performance management system principles and practices of the ‘new performance management’. I.e., less bureaucracy, less paperwork, less retrospectivity, less ritualistic, less judgementalism, and less hierarchy; more inclusivity, more problem-solving, more forward planning, more developmentalism, and more technology-enabled data management.
I was encouraged by such results as it reinforces my 20-year journey searching for and introducing ways to improve traditional approaches to performance management systems and increase their contribution to the achievement of positive organisational outcomes.
While there are many variables that will impact on the final design of any individual performance management system, there are two principles and practices I have identified that have proven to:
1. Reduce bureaucracy and paperwork,
2. Be less retrospective, ritualistic, judgemental, and hierarchical
3. Be more inclusive, problem-solving, forward planning, and developmental-focused
4. Allow technology-enabled data management.
1. Adopt a BARS designed approach to the conversation and documentation aspects of your performance management system.
2. Implement Proactive Re-Engagement Programs to support the difficult conversations.
For me, the report has confirmed that HR can make significant advances in how performance management systems can improve their contribution to the achievement of positive organisational outcomes.