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  • Mark Shaw

The poor state of performance management in Australian Organisations

In 2021, AHRI teamed up with the University of Sydney Business School to survey 163 HR professionals and explore how performance management has shifted in Australian organisations (reference).

The key findings included

  • Traditional practices remain prevalent (I.e. using rating scales, self-assessment, planning discussions, competency assessments, cascading goals)

  • The use of new or non-traditional practices (including ongoing feedback, development coaching, rating-less reviews, crowd-sourced feedback and use of AI) remains low

  • Few traditional or new practices were perceived as being particularly effective in improving employee performance

  • Only a minority believed their PM systems supported business outcomes, drove reward outcomes, distinguished adequately between employees performance-wise, helped make legally-defensible HR decisions, or supported good succession plans, counselling and/or staffing strategies.

The report concluded that ‘the sudden, sustained and repeated shifts to lockdown and remote working have, arguably, set the stage for an imminent and profound shakeout in traditional performance management practice’. It suggests PM systems need to change to newer, less hierarchical, and more inclusive practices.

For more than 20 years colleagues and I have been arguing that this is the case. So I was personally disappointed that such an important HR function is still being reported as failing so badly after all that time.

Equally, it has been well recognised for decades that PM systems are bureaucratic, paper-based, backward looking, ritualistic, judgemental, and hierarchical. So why does it take a pandemic to drive improvements?

Alternatives that are focused on problem-solving, forward planning, employee development, and technology-enabled data management are already available. These alternatives drive reward outcomes, distinguish adequately between employees performance-wise, and help make legally-defensible HR decisions.

Managing performance happens in every business every day. Every manager does it; every employee is aware of it. The real issue is how effective is the system provided by HR in meeting the required business goals, providing useful data for effective management decision making, and helping to make legally-defensible HR decisions.

For over 20 years, the approach I have successfully implemented in multiple industries including education, government, mining and not-for-profits, uses Apps configured on customised Behavioural Anchored Rating Scales and uses Proactive Reengagement Programs instead of Performance Improvement Plans. Why? Because this redesigned approach is effective at supporting business goals and meets the accelerated changes in practice the report indicates are necessary.

If COVID is forcing you to rethink your PM system, why not consider something that already has long-term proven success. Have a discussion with me on how this ‘newer’ approach can help your organisation. You may be surprised at what is possible.

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